The requirements are part of the new executive regulations implementing Federal Law No. 14 of 2024 on the Regulation of Traffic. The new rules are scheduled to take effect on January 1, 2027.

According to Al Khaleej newspaper, the regulations establish a series of licensing conditions and operational obligations that rental companies must meet to legally conduct business across the UAE.

Four Mandatory Conditions for Car Rental Businesses

The new regulations specify four essential conditions for operating a vehicle rental business.

The first requires every rental vehicle to have a tracking device approved by the relevant licensing authority.

Companies must also register and subscribe to the unified electronic platform approved by the Ministry and the licensing authority.

In addition, rental businesses must comply with any further requirements imposed by the licensing or traffic enforcement authorities.

A valid commercial licence authorising vehicle rental activities is also mandatory.

Annual Permits for Rental Companies

Under the new framework, individuals and companies will not be permitted to operate a vehicle rental business without obtaining an official permit from the relevant licensing authority.

The permit will remain valid for one calendar year and may be renewed for an equivalent period, subject to compliance with the applicable requirements.

Unified Electronic System to Monitor Rental Vehicles

The regulations also require the Ministry to establish an electronic system for registering vehicles owned by rental agencies.

The system will enable authorities to monitor the geographical movements of rental vehicles and record information and data relating to their rental transactions.

This electronic framework is intended to strengthen oversight and improve the management of vehicle rental operations.

Five Additional Obligations for Rental Agencies

The new rules also introduce five obligations for licensed car rental businesses.

Companies must verify the validity of customers' driving licences before handing over vehicles.

All rental transactions must be completed through the approved standardised rental agreement and registered electronically with the relevant licensing authority.

Rental agencies must also use vehicles registered in their own names and authorised for rental purposes.

Furthermore, lending vehicles between different rental companies will be prohibited unless the arrangement is covered by a rental agreement officially registered with the licensing authority. An exception applies to the use of vehicles by employees of the same rental company, subject to the relevant conditions.

When Will the New UAE Regulations Take Effect?

The new executive regulations are scheduled to come into force on January 1, 2027.

From that date, rental businesses will be required to comply with the tracking-device requirement, unified electronic registration, annual permits, and the new contractual obligations.

The measures form part of the UAE's wider efforts to modernise traffic regulations, strengthen digital monitoring, and improve oversight of the vehicle rental industry.