Dubai attracts millions of tourists worldwide with its unique architecture and luxurious resorts, now iconic to the city. Its convenient location also aids in tourism growth, with approximately 30 countries reachable within a 4-6 hour flight. Currently, the UAE ranks fourth globally in international tourism revenue, highlighting the sector’s importance to the nation. By the end of 2024, the UAE’s fast-growing tourism sector is expected to contribute AED 236 billion to the economy. This booming industry will continue to open new opportunities for investors and create thousands of new jobs. Dubai will continue to establish itself as a global hub for both leisure and business tourism.
This makes the UAE an incredibly promising location for developing a tourism business. Unsurprisingly, Dynasty Business Adviser often receives inquiries on how to establish a travel agency and enter this fast-growing market.
Requirements for starting a travel business
Setting up a travel business in the Emirates requires significant financial investment. Along with various registration costs, a non-refundable deposit ranging from AED 100,000 to AED 200,000 must be placed in a bank account, depending on the type of activity. This deposit serves as a financial stability guarantee for the company.
Additionally, certain licensing requirements must be met:
- the owner or director must have a relevant degree in the industry (a bachelor’s degree is sufficient), which must be verified with a diploma;
- In certain areas of tourism, directors may need at least three years of experience. This could mean working within a travel company or having proven experience running a business in the tourism field supported by official documents;
- All staff in management roles must provide proof of no criminal record, which can be obtained from the local police.
If these initial conditions are met, it may be worthwhile to continue exploring the steps for opening a travel agency. The following sections highlight the benefits of making this move.
Benefits of running a tourism business in Dubai
| Advantage | Description |
|---|---|
| Growing market | Dubai’s tourism sector is rapidly developing. The city attracts millions of tourists each year with its luxurious hotels, large-scale events, and unique attractions. In 2023 alone, Dubai welcomed 17.15 million tourists, 19% more than in 2022. Tourism’s contribution to the UAE GDP is expected to keep growing. |
| No income or capital gains tax | There is no capital gains or income tax in Dubai. The only tax businesses encounter is a 5% VAT. By the way, it’s among the lowest globally. |
| Well-developed infrastructure | Dubai provides extensive transportation networks, international airports, excellent hotels, restaurants, and conference centers. All this enables high-quality event organization and service for various needs. |
| Government support | The government actively supports tourism development through initiatives to ease visa processes and investments in infrastructure improvements. |
| Global reputation and safety | Dubai is well-regarded for its safety for tourists. This makes it a highly attractive destination for tourists from around the world. |
Let’s look at what needs to be done to open a travel agency.
Getting a tourism license
Operating a business without a license in the UAE is illegal. So, securing the appropriate license is the first step.
Types of tourism licenses
There are three primary categories for tourism companies in Dubai. Businesses are restricted to offering only the services specified in their license. Companies can choose one or all three at registration.
Types of tourist sectors in the UAE:
- travel agency — acts as an intermediary, selling tours and services provided by tour operators. Travel agencies offer clients pre-arranged trips, ticket bookings, hotel reservations, and excursions.
- inbound tourism operator — organizes local services such as visa arrangements, local tours, transportation, and accommodation within the UAE.
- outbound tourism operator — manages tours and related services for travel outside the UAE.
Step-by-step guide to acquiring a tourism license
The licensing process in the UAE includes the following steps:
- Register the company name.
- Define the business activity.
- Establish the legal structure.
- Choose an office location.
- Prepare documents for preliminary registration.
- Obtain approval from the Department of Tourism and Commerce Marketing (DTCM).
- Pay the licensing fees and receive the license.
Steps overview
- Step 1. The company name must be unique within the UAE and clearly reflect the business activity. Consider including words like “Travel,” “Tours,” or “Holidays.” Register the name with the Department of Economic Development.
- Step 2. Decide on the type of tourism business you wish to run – whether as an intermediary, event organizer, or service provider within or outside the UAE.
- Step 3. Choose the legal structure, which can be an LLC, a representative office, or a branch of your foreign company.
- Step 4. The minimum office size is 30 m². If you have multiple types of activities, each requires a minimum of 30 m². An office is essential for opening a bank account and securing the required irrevocable deposit.
- Step 5. Passports, diplomas, and certificates obtained in languages other than Arabic or English must be translated and certified.
- Step 6. The DTCM will review the company’s compliance with qualification and financial requirements (hence, the deposit).
- Step 7. After completing these steps and obtaining the necessary approvals, you’ll receive a license to legally operate your tourism business in Dubai.
Required documents
To obtain a tourism license, prepare the following:
- copies of the founders’ passports;
- educational and professional qualification documents (diplomas, certificates);
- copies of employee visas;
- company name certificate;
- office lease agreement;
- bank statement showing the deposit account.
Conditions for issuing a tourism license
Above, we discussed how to obtain a travel agency license in the UAE: the steps and documents needed for this process. To expedite the process and increase the chances of getting a license, consider these additional requirements:
- Specialized education, ideally higher-level. Additional specialized DTCM courses are an advantage.
- Managers and staff should have between 1 to 3 years of experience in the tourism sector.
- A physical office meeting specific size and equipment standards is mandatory.
- Professional liability insurance is required to protect against client claims in case of travel disruptions or service issues.
- Proof of a bank deposit.
Cost of starting a travel agency
The primary costs for starting a tourism business include:
- License fee — ranges from 13,000 to 17,000 AED per license. The cost depends on the region of registration and the types of services offered. Note that all business licenses in the UAE must be renewed annually.
- Office rental — costs between $500 and $800 per square meter per month, generally paid annually. This also includes utilities and telephony. In Dubai, an additional 10% municipal tax on the annual rental amount applies. It’s paid by the tenant. Utility bills are also added.
- Security deposit — between 100,000 and 200,000 AED.
- Consulting services — working with a consulting firm can help avoid delays and complications, which are common when registering a foreign business. Service costs depend on the package selected, typically around $4,000 to $6,500.
All payments will also include a 5% VAT and various government fees. They vary by region and average about $850.
Tips for simplifying the business setup process
Handling all procedures for obtaining a tourism license in Dubai can be challenging. This requires not only adherence to local laws but also familiarity with working with government agencies. Mistakes at any stage may lead to delays or denial of the license. However, addressing an experienced consulting firm, like ours, with expertise in registering businesses of all complexities, can simplify the entire process.
We can assist with end-to-end business registration, or individual needs, such as:
- trademark registration;
- employee visa processing;
- preparation, translation, and certification of documents;
- corporate bank account opening;
- obtaining various permits.
Our financial and legal experts, fluent in Arabic and English and knowledgeable in local laws, help you navigate bureaucratic challenges and successfully set up your business.
