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How to Start a Yacht Rental Business in Dubai?

By Shivangi - 10 Aug 2021 Last Updated: 29 Apr 2022
How to Start a Yacht Rental Business in Dubai?

Dubai is a popular tourist destination, and it now has some of the best hotels, retail malls, entertainment venues, and boat cruises in the world. Dubai's economy is mostly based on tourism. The tourist industry in the United Arab Emirates contributes 66 percent of the country's overall GDP. Over the next decade, tourism will rise at an unprecedented rate.

Due to its ongoing development, state-of-the-art infrastructure, multiculturalism, and other factors, the United Arab Emirates has one of the world's strongest economies. Another major aspect is its magnificent locations, such as Dubai, Abu Dhabi, and Sharjah, which have served as a passage or transit point for almost three centuries to Africa, Asia, the Middle East, Europe, and Russia.

The UAE has the world's wealthiest people, and private wealth in the country is expected to expand at a 7.4% annual pace to Dh 2.94 trillion over the next five years. The families own yachts and boats, and the beautiful thing about Dubai is that yacht and pleasure boat ownership is not limited to the ultra-wealthy, but is enjoyed by a large portion of the local and expatriate community.

The Dubai Maritime City Authority (DMCA) strives to promote contemporary yacht infrastructure in freezones like Dubai. The Authority developed the Sea Dubai project specifically to boost Dubai's luxury boat sector and attract a large number of private enterprises that provide services to the industry. Nakheel is adding extra facilities to its current Palm Jumeirah marina, bringing the total number of berths on the island to 600.

Dubai is collaborating with Carnival Cruise Lines to establish a global cruise tourism hub, with the Dubai Cruise Terminal (DCT) serving as Carnival's regional headquarters. New Investments in boosting air and rail capacity, as well as significant regional events like the Expo and the World Cup, are expected to boost Tourism growth. These visitors are ideal customers for a new boat rental company.

Recognize the Local Market

With such a wide range of variation in tiny to midsized boats, there is a wide range of options, regardless of price. The UAE is expected to have around 20,000 boat owners by 2025, according to estimates. As a result, the industry's competitiveness is as fierce as ever.

Yachts can be expensive, and the costs aren't limited to the purchase price. You must consider in expenditures for routine maintenance, Insurance, berthing fees, Licencing, transit logs, harbour master formalities, crew salaries, and so on, in addition to the initial purchase. Whether you have bookings or not, you'll need a sizable emergency fund to cover all of these costs.

The majority of renowned tourist destinations have been controlled by existing businesses. Small budget yacht rentals that rely on volume, major high-end yacht charters that cater to wealthy tourists, and companies with exclusive contracts with tour operators are the three categories of Dubai yacht rental companies.

Services for renting a Luxury Yacht

The way you position your company will have a big impact on your profit margins. While everyone wants to profit from the huge margins offered by luxury yacht rental services, a larger initial investment is necessary. Many businesses in this sector rely on word-of-mouth marketing, which can be difficult for a newbie to master.

Collaboration with an existing tour operator is an easier way to break into the market. They will be able to provide you with the necessary passenger volume to keep your business afloat. You will, however, be required to pay the tour business a referral fee for each passenger that they send through. These businesses can also be ruthless in their pursuit of a large commission for recommendations.

Read More: Key Business Benefits of Forming Company in UAE

What is the Process to Start a Yacht Rental Business in Dubai?

Decide what services you want to provide to your customers before registering your business in Dubai. Is it possible to rent a yacht? What is a tourism service? To aid the clients, do you have a water guide? The method for registering yachts over ten tonnes is outlined in the UAE Maritime Law No. 26 of 1981. Only a UAE national or a UAE national-owned corporation is entitled to fly the UAE flag on this yacht and lease it for commercial charter under current law.

This means that any foreign-owned vessel wishing to conduct charter business in the UAE must be owned by a national of the UAE at least 51 percent of the time. This creates perplexing situations, such as when a yacht registered in the UAE by a foreign resident is not permitted to fly the UAE flag and must instead fly the flag of the foreign resident's country.

The Dubai Maritime City Authority is the body that oversees the registration of your yacht leasing company in Dubai (DMCA). Following a memorandum of agreement signed between the two entities in early 2017, the DMCA took over this responsibility from the Federal Transport Authority - Land & Maritime (“FTA”) in Dubai. The FTA will continue to be the registration authority for recreational boats in Abu Dhabi and other emirates. The registration system in Dubai was created to make the process easier and to reflect Dubai's prominence as an international maritime hub.

Pleasure vessels (yachts) are divided into two categories under Dubai law (Executive Council Resolution No. 11 of 2013): motorised and non-powered. Sailing, rowing, and other similar watercraft are examples of non-motorized vessels. Personal watercraft and similar vessels are divided into three categories: vessels under 12 metres in length, vessels between 12 and 24 metres in length, and vessels over 24 metres in length. The main distinctions are the technical standards that different types of vessels must meet, as well as the registration fees.

Conclusion

To run a boat leasing business in Dubai, you'll require a local business licence from the Dubai Department of Economic Development (DED). Additional approvals and safety clearance certifications are required for the operation of a nautical vessel. Because the procedures are not as straightforward as traditional business creation, we recommend that you hire a consultant.

Our experienced team can assist you in making your boat business a reality. To get started, all you need is a visit with one of our business advisors at Dhanguard.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

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