Dubai Rental Contract Requirements for Car Hire Firms

The two layers of rules behind your contract

A rent-a-car business in Dubai sits under two sets of rules, and your contract has to satisfy both.

The first is the emirate permit regime. Executive Council Resolution No. 47 of 2017 regulates the activities of transportation by, and rental of, vehicles in Dubai. Article 3 is short: no person may conduct the activity without a permit, which runs for one renewable year and must be renewed at least 30 days before expiry. Administrative Resolution No. 571 of 2022 is the implementing bylaw, covering vehicle standards, tracking, inspection and permit changes. Resolution 47 says nothing about a required contract form. That obligation sits in Executive Council Resolution No. 49 of 2016 on hourly rental of light vehicles, whose Article 5 tells establishments to use the RTA-approved standard contract and not to rent to anyone without a licence the RTA recognises, with AED 1,000 in Schedule 2 for the second breach. It is written for hourly rental, so do not quote it as the general rule.

The second layer is federal traffic law. Federal Decree-Law No. 14 of 2024 came into force on 29 March 2025 and made unlicensed driving a criminal matter. Press reporting puts a first offence of driving with no licence, or one not valid for the vehicle type, at AED 5,000 to AED 50,000 or up to three months in jail, and an unrecognised foreign licence at AED 2,000 to AED 10,000.

The RTA unified contract, and what the market actually does

RTA runs the Transport Activities Rental System, or TARS, issuing electronic lease contracts since 30 October 2021. In 2026 RTA campaigned to reinforce that a unified contract is mandatory for car rental offices across the emirate. The form covers vehicle and renter details, the rental terms, the condition photographed at handover and at return, a deposit refund commitment, a ban on undisclosed charges such as toll fees, and identity verification by one-time password as the signature.

Mandatory on paper does not mean universal at every counter. RTA trained 989 rental companies on TARS at launch and 1,451 were registered by mid-2022, and plenty of independent operators still run their own template. If that is you, two things are true at once: you carry regulatory exposure, and your template still has to carry the same substance, because the substance is what a court reads when a customer disputes a charge.

What a compliant rental agreement contains

Who is allowed to drive, and on what excess

Only the named renter and the additional drivers listed on the contract. The UAE Unified Motor Vehicle Insurance Policy against loss and damage, issued under Insurance Authority Board of Directors' Decision No. 25 of 2016 and published in the CBUAE Rulebook, excludes payment where the loss arises from driving by a person not authorised under the traffic law, or with no valid or current licence. When your customer lets a cousin drive and the cousin crashes, you carry the repair cost, because the person who signed was not the person driving.

The same policy caps the deductible for rental vehicles at 20 per cent of the compensation amount, and allows a further 10 per cent where the driver at fault is under 25. Make the renter's liability for that excess explicit and print the figure. The other exclusions are consistent: driving under the influence, use outside the permitted purpose or area, and claims with no police report.

Licence rules for visitors

The shorthand version is wrong in both directions. The UAE government portal says visitors driving into the country need an international driving permit and valid insurance, and that GCC residents may drive on their country-of-residence licence. Separately, the Ministry of Interior's Markhoos initiative lists countries whose national licences are accepted, and nationals of those countries can drive on the home licence for the length of a visit. An IDP is therefore neither required of every tourist nor optional for everyone. At the counter: a UAE or GCC licence stands alone, and for anyone else check Markhoos, taking an IDP where the country is not listed or the licence is not in English or Arabic.

A minimum age of 21, and a requirement that the licence has been held a year or two, are commercial policies set by operators and insurers, not statutory rules. Write yours into the contract.

Emirates ID and passport: copy, never keep

Copy the passport, visa page, Emirates ID where the customer has one, and the licence and IDP. Keep the copies with the contract for as long as a claim could still arise. The car coming back is not the end of the file.

Do not hold originals. Major General Mohammad Saif Al Zafein, director of the Federal Traffic Council, has stated publicly that rental companies in the UAE may not take a customer's passport or Emirates ID as a guarantee, and that companies doing so risk losing their licence. The permitted security is the customer's card and licence details, not identity documents.

The security deposit and the 30 day rule

Dubai's Department of Economy and Tourism issued Circular No. 1 of 2024 requiring rental firms to block a security amount and release it within 30 days of the vehicle's return. Deposits are blocked rather than charged, and deductions are limited to actual costs: traffic violations, damage, tolls and applicable administrative fees. A card deposit goes back to the same card; cash or debit returns in cash or by bank transfer, transfer fees on the company. Surcharges for card or app payment are prohibited, and DET has closed rental firms over consumer rights breaches with fines starting at AED 10,000.

Deposit amounts are commercial, not regulated. State your amount, deduction reasons and release period in plain words. A deposit you cannot explain is one you will refund in full.

Fines and Salik: the clause that decides whether you can recover

Traffic fines attach to the plate, so they arrive at your company, and you can pass them on only if the contract says so. In a case reported in June 2026, the Dubai Civil Court ordered a renter to pay a rental company AED 8,735 under a lease signed in October 2025: AED 5,660 in traffic fines, AED 350 in Salik and the balance in other dues, with 5 per cent legal interest. The court relied on the lease agreement, the violation records and the toll records, while a separate AED 10,000 compensation claim was dismissed for insufficient evidence. Clause plus documents wins; what is not evidenced does not.

State the Salik rate you pass on and the admin fee, if any. Salik has used variable pricing since 31 January 2025: AED 6 at peak, meaning 06:00 to 10:00 and 16:00 to 20:00, AED 4 off peak, nothing between 01:00 and 06:00, and AED 4 on Sundays outside the free window, with peak shifted to 09:00 to 17:00 in Ramadan. From 1 June 2026 Salik applies 5 per cent VAT on toll tariffs, taking a peak crossing to AED 6.30 and an off peak crossing to AED 4.20. If your contract still quotes one old flat figure, update it.

What actually goes wrong

Three failures repeat. A fine arrives a month after the rental and the contract has no recharge clause, so you absorb it. A customer disputes a scratch, there are no dated handover photographs, and the deposit goes back in full. An unlisted driver crashes the car, the insurer declines, and you hold the repair bill while the renter has left the country. Each is a missing line in a document, not bad luck.

We build Deck, an operations panel for UAE rent-a-car companies, so treat this paragraph as interested. In fleets of 10 to 60 cars, contract content is usually adequate and record keeping is not: photographs on a personal phone, contracts in a drawer, fines never matched back to a rental period.

A checklist for the counter

• Licence checked, photographed and recorded with its expiry, plus an IDP where Markhoos does not cover the country.
• Every driver named, including the one added at the last minute.
• Identity documents copied, originals handed straight back.
• Photographs of all sides, wheels, interior and dashboard with mileage and fuel, dated, out and back.
• Deposit amount, deduction reasons and release period written down and said aloud.
• Fine and Salik recharge clause present, admin fee as a number, excess in figures.
• Both signatures, both dates, a copy to the customer.

Questions operators ask

Do I have to use the RTA unified rental contract in Dubai?

RTA states that the unified contract is mandatory for car rental offices in Dubai and is issued through the TARS platform. Adoption is uneven in practice, and many small independent operators still issue their own template. The safer position is to issue the RTA contract through TARS and keep your own terms as a supplementary annex rather than a replacement. Note that the explicit statutory contract obligation in Executive Council Resolution No. 49 of 2016 is written for hourly rental, so do not rely on it as the general legal basis.

Can I charge a customer for traffic fines after they have returned the car?

Yes, if the contract says so in writing and you can evidence the fine and the rental period. In a case reported in June 2026, the Dubai Civil Court ordered a renter to pay a rental company AED 8,735 covering traffic fines, Salik charges and other dues, relying on the lease agreement, the violation records and the toll records. A separate AED 10,000 compensation claim in the same case was dismissed for insufficient evidence. Without a recharge clause and documents, recovery is difficult.

How long can I hold a customer's security deposit in Dubai?

Dubai's Department of Economy and Tourism, through Circular No. 1 of 2024, requires the security amount to be blocked and released within 30 days of the vehicle's return. Deposits should be blocked rather than charged, and only actual costs such as traffic violations, damage, tolls and applicable administrative fees may be deducted. A card deposit is released to the same card, while cash or debit deposits are returned in cash or by bank transfer with the transfer fees paid by the company.

Can a rent-a-car company keep a customer's passport or Emirates ID?

No. Major General Mohammad Saif Al Zafein, director of the Federal Traffic Council, has stated publicly that car rental companies in the UAE may not take a passport or Emirates ID as a guarantee, and that companies doing so risk losing their licence. Take copies for your file and hand the originals straight back. The permitted security is the customer's card plus the driving licence details.

Does a tourist need an International Driving Permit to rent a car in Dubai?

It depends on the country that issued the licence. The UAE government portal says visitors driving into the country need an international driving permit and valid insurance, while GCC residents may drive on their country-of-residence licence, and the Ministry of Interior's Markhoos initiative lists countries whose national licences are accepted for the length of a visit. Check Markhoos for the specific country rather than a printed list, since recognition changes. Take an IDP where the country is not listed or the licence is not in English or Arabic.

What happens if someone not named on the contract drives the car?

Your insurance cover is likely to fail. The UAE Unified Motor Vehicle Insurance Policy excludes payment where the loss arises from driving by a person not authorised under the traffic law or without a valid licence. That leaves you paying the repair and chasing the renter for the money. Add every additional driver to the contract at the counter and check the licence the same way you check the main renter's.

What is the minimum age to rent a car in Dubai?

There is no single statutory rental age. Minimum ages of 21 or 25, and requirements that the licence has been held for a year or two, are commercial policies set by operators and their insurers rather than legal rules. The insurance angle is real, though: the unified own damage policy allows an additional deductible of up to 10 per cent where the driver at fault is under 25, on top of a rental vehicle deductible capped at 20 per cent. Agree your policy with your insurer, then write it into the contract.