Under the new executive regulations of the UAE Traffic Law, which will take effect on January 1, 2027, all car rental companies in the country must install tracking devices approved by the licensing authorities in every vehicle designated for rental.

Emarat Al Youm reported on Monday, November 9, 2026, that the new regulations set out a series of conditions and obligations for car rental companies. Key requirements include obtaining an operating licence, installing tracking devices, registering information in an integrated electronic system and complying with rules governing rental agreements.

The requirements were introduced under UAE Cabinet Resolution No. 174 of 2026, concerning the executive regulations of Federal Decree-Law No. 14 of 2024 on the regulation of traffic and road use.

Licensing requirements for car rental companies

Under Article 123 of the new regulations, operating a car rental business in the UAE requires prior approval from the licensing authority. The licence will be valid for one calendar year and may be renewed for a similar period.

Companies applying for a licence must hold a valid commercial licence for car rental activities and install tracking devices approved by the licensing authority in all vehicles designated for rental.

Companies must also register with and connect to the integrated electronic system approved by the UAE Ministry of Interior and the licensing authority.

In addition, car rental companies must comply with any other requirements imposed by licensing authorities or traffic regulatory bodies.

Five key obligations for car rental companies

Article 124 of the new regulations sets out five key obligations for licensed car rental offices and companies.

Companies must verify the validity of a customer’s driving licence before renting out a vehicle.

All rental transactions must also be conducted through the “Unified Car Rental Agreement” on a system approved by the licensing authority. Agreements must be electronically registered with and approved by the authority.

Car rental companies may rent out only vehicles registered in their own names and licensed for use in car rental operations.

The new regulations also prohibit car rental companies from lending vehicles to one another unless the arrangement is made under a rental agreement registered with the licensing authority.

However, employees may use vehicles owned by their company, provided they comply with the conditions and rules set by the licensing authority.

Electronic system to register and track rental vehicles

Under Article 126 of the new regulations, the UAE Ministry of Interior will be responsible for designing and launching an electronic system to register vehicles owned by car rental companies.

The system will record vehicle information and rental details and enable authorities to track the geographical areas in which rental vehicles operate.

It is intended to register and manage information on rental vehicles and allow their geographical operating areas to be monitored.

Ban on renting unlicensed private vehicles

Article 127 of the new regulations also introduces restrictions aimed at preventing unauthorised car rental activities.

The article explicitly prohibits renting out or renting private vehicles that are not licensed for use in car rental operations.

Such vehicles may also not be used to transport passengers or goods in exchange for payment or any other financial consideration.

Under the new rules, car rental companies across the UAE must comply with the requirements of the Traffic Law’s executive regulations from January 1, 2027.