Their lawyer, Majid Al Kabban, confirmed on Tuesday that the ruling by a lower court, which had sentenced the two to a month in prison and deportation, was overturned last week.
The couple successfully argued their car should be treated like a private house.
Their lawyers argued that because of the car's tinted windows, a policeman who raised the charge could not have seen what the couple did inside.
The case is the latest in a string of sex cases in Dubai.
The city has lenient social codes but a tendency to crackdown on frisky foreigners. In March, a British couple was found guilty of kissing in public.