Establishing a travel agency in Dubai

Dubai has seen over 8 million overnight stay tourists in the first half of 2017 alone. Having a growing market and a strong foundation for tourism, it comes as no surprise, that entrepreneurs are attracted to Dubai to enter the ever-growing tourism market.

It should be noted, however, that setting up a travel agency in Dubai requires significant investments. Additionally, there is a list of requirement that also needs to be met. As such, in this article we want to shed some light on the budget you would require for setting up a travel company and requirements you would need to meet to be able to proceed with the registration process.

In Dubai, all companies are registered and have the business activities they will be engaged in stipulated on their license. This ensures that companies cannot operate for purposes other than those for which they were registered.

For your tourism company, you will be able to choose from three (3) main activities. You will be able to opt for one of them, for two or stipulate all three at the same time. These activities are as follows: Inbound Tour Operator, Outbound Tour Operator and Travel Agency.

Inbound Tour Operator

Inbound Tour Operator activity would allow you to 1) organize local incentive tours or tours for foreigners; 2) handle visas; 3) organize transportation, and 4) organize accommodation.

Outbound Tour Operator

As Outbound Tour Operator you will be able to organize and sell tourist programs abroad.

Travel Agency

And, finally, Travel Agency activity allows 1) selling air tickets on behalf of authorized agents; 2) carrying out hotel bookings and 3) car rentals.

Generally, all three of these activities, require, first of all, that the manager of the company has relevant education and the same shall be proved by a legalized educational degree. A manager can hold a bachelor’s degree or a certificate of specialization in the Tourism/Travel Industry. Additionally, alongside relevant educational background, managers shall possess a minimum of 3 years of experience in the tourism industry.

The further requirement, when setting up a travel agency or a tourist company in Dubai, would be a police clearance certificate, that shall be provided with respect to all company’s partners and a manager.

There is also a specific requirement in place with regards to the company’s office space. It is mandatory for the entity to occupy an office space of a minimum of 30 square meters per activity listed above. Thus, if an entity is operating under all 3 activities, they will be required to have a minimum office space of 90 square meters.

One should also note that each of the activities requires an irrevocable bank guarantee in the name of the Department of Tourism and Commerce Marketing. The amount of bank guarantee varies from AED 100,000 to AED 200,000, depending on which of three activities you choose.

If you choose to establish a tourism company engaged in Inbound or Outbound Travel activity, you will also need to arrange for an insurance policy, covering all the risks associated with tourism plans offered, and conduct a feasibility study, highlighting the advantage it brings to the Tourism Sector.

In case you wish to register a travel agency in Dubai, you will need to obtain a Non-Objection Certificate (NOC) from the Civil Aviation Authority, Dubai.

As such, all the requirements with respect to each of three tourism activities can be summarized as follows:

INBOUND TOUR OPERATOR	1) organize local incentive tours or tours for foreigners 2) handle visas 3) organize transportation 4) organize accommodation
Requirements:
1. Bachelor’s degree or a certificate of specialization in the Tourism/Travel Industry + 3 yrs of experience in the tourism industry for a manager
2. A police clearance certificate for partners/manager
3. 30 sq. m. of office space
4. AED 100,000 irrevocable bank guarantee
5. Insurance policy covering all risks
6. Feasibility study

OUTBOUND TOUR OPERATOR	1) organize and sell tourist programs abroad
Requirements:
1. Bachelor’s degree or a certificate of specialization in the Tourism/Travel Industry + 3 yrs of experience in the tourism industry for a manager
2. A police clearance certificate for partners/manager
3. 30 sq. m. of office space
4. AED 200,000 irrevocable bank guarantee
5. Insurance policy covering all risks
6. Feasibility study

TRAVEL AGENCY	1) selling air tickets on behalf of authorized agents 2) carrying out hotel bookings 3) car rentals
Requirements:
1. Bachelor’s degree or a certificate of specialization in the Tourism/Travel Industry + 3 yrs of experience in the tourism industry for a manager
2. A police clearance certificate for partners/manager
3. 30 sq. m. of office space
4. AED 100,000 irrevocable bank guarantee
5. NOC from CAA, Dubai

In the event, you want all three (3) activities to be listed on the company’s license, you will need to ensure that you meet all the requirements, mentioned for each of the activities, and you place an irrevocable deposit totaling to AED 400,000.

These specific requirements will fall alongside the usual requirements for setting up a local company, such as registration and the need of having a local partner, both of which encompass additional costs.

It should also be specifically noted that for companies in the travel/tourism industry, local partner remuneration is usually much higher (AED 30,000+) as it is a higher risk market segment.

As such, it is important to carefully consider all the requirements and costs associated with a company in the tourism or travel industry, prior to beginning the registration process. Your total costs will comprise of the following:

License Fee – AED 13,000 – 17,000 (paid annually)
Local partner fee – AED 20,000 - AED 30,000+ (paid annually)
Office rent (min 30 sq.m.) – AED 50,000 – AED 60,000+ (paid annually)
Irrevocable guarantee – AED 100,000+ (one-time-payment)
NOC – AED 5,000
Other future government charges re Establishment Card, Visas of Employees etc.

With all this information in mind, you will be able to budget your travel company establishment in Dubai.

It is merely important to note that this market segment is strictly regulated. Therefore, it is of utmost importance to handle all matters regarding the new entity in the correct manner.

Business Boutique | UAE-Consultants.com has an expertise in company formations and all business consultancy matters within Dubai and the UAE. We would be happy to assist you with any follow-up queries within our competency. You can contact us via uae@uae-consultants.com or via our office phone no. +971 4 368 48 84.

Prepared by Business Boutique | Published on Oct 21, 2018

Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea of tourism business set-up in the UAE. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.

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