How to open a Restaurant in Dubai
1. Introduction
A. Brief overview of Dubai's restaurant industry
Dubai is fast emerging as one of the top global food destinations and opening a restaurant in Dubai can prove to be extremely lucrative, if done correctly. It turns out, each year, Dubai sprawls with millions of tourists from all over the world. With one of the fastest-growing economies, flourishing infrastructure, and beautiful ambiance, Dubai stands to be one of the top tourist destinations in the UAE. To have a taste of Dubai’s world-class cuisine and to savor its delicacies, travelers from around the world gather here. Such potential attracts business people who wish to open a restaurant in Dubai.
B. The benefits of opening a restaurant in Dubai.
The restaurant business is not as easy as it seems. Many aspiring restaurateurs overlook important factors in the process of setting up, which eventually results in failing companies. But, once you get the hang of it, there are many advantages that can be incurred from this business.
1. Location
The right location is the key pillar of setting up a restaurant. Dubai, being the hub for tourist and business destination, pulls in many foodies into the city. Hence Dubai as a whole is a perfect location to set up your restaurant business. Before you freeze a location make sure to do some research on that place and its demographics also see whether that place has enough footfall to sustain your restaurant business.
Visibility – Setting up your restaurant in a visible location is very vital. Ensure the footfall is high and your restaurant sign is visible.
Accessibility – It makes a huge difference if your restaurant is situated in an accessible area. If people can reach your restaurant easily, they are more likely to revisit your restaurant due to the easy accessibility factor.
Customer Base – It is essential to identify your target audience and then you can go about deciding the location apt for the desired audience base.
Affordability – If the rent is high, you might find it difficult to make profits on certain food items. Do your research see if there are chances of the lease skyrocketing based on the previous pattern.
Proximity to Suppliers – The shipping costs can sometimes be more than the original amount of the raw materials. You need to figure out from where you will be getting all the raw materials required for cooking and how far away is your restaurant from the supplier.
Your restaurant’s location plays a very vital role in determining whether your restaurant would be a hit or a miss amongst the Emiratis and the tourists.
2. Infrastructure and Amenities
In Dubai, there is no need for you to worry about the infrastructural requirements as it is at par with the global standards in infrastructure, modern amenities, and architecture. There are various malls famous for food and shopping across Dubai. e.g. The Dubai Mall is the world’s biggest shopping center and City Walk.
3. Tax Exemptions
One of the major difficulties of opening a restaurant company in a foreign land is developing the knowledge of their tax legalities and maneuvering your business in such a way that you have minimum taxes to manage. Dubai offers various tax incentives, one among them stands out to be the free zone with the feature of 100% tax exemptions, zero corporate and income tax, and many more. Hence, a restaurant startup can save money through these tax incentives.
4. Ease of Acquiring Food and Trading Licenses in Dubai
The government of the UAE is always on the lookout for new investors. Due to this reason, it is very easy to register your business in Dubai. Moreover, the same applies to procure a food and trading license in Dubai. Alcohol license also is available though it should be known that there exists a special process for obtaining the same, with additional fees being charged by the authorities.
5. Ease in setting up a Business in Dubai
Starting a business in the UAE is hassle-free and quick if the right procedures are followed. The same goes for Dubai, especially in the food industry. It is very easy to start a restaurant business in Dubai. There are various types of companies to choose from, however, unless you are setting up a restaurant business in a free zone in Dubai, you would require the presence of a local sponsor.
1. Food Code and Licensing
Food Code
To get a restaurant license in Dubai, you have to follow the ‘Food Code’ rules supervised by the Food Control Department of Dubai. From food production to its consumption, the food code ensures food safety and hygiene at every step. Restaurants, hotels, Bakeries, food catering services, and food factories need to follow the food code established by Dubai Municipality
Trade License
The Department of Tourism and Commerce administers the trading license for all business activities in Dubai. You can receive a Restaurant license in Dubai by registering your restaurant business under the legal boundaries stated by DED.
Food License
You can get your food license by signing an agreement with the Food Safety Department in Dubai. Purchasing a food license will charge you approx AED10,000 to AED12,000 in Dubai.
Liquor License
If you are planning to provide alcohol and liquor services in your restaurant then you will require a liquor license.
Mainly two types of licenses are necessary if you want to start a restaurant business in Dubai.
Step to Obtain a Trade License
1. Establish the nature of your business (commercial, professional, or industrial).
2. State the expected corporate behavior of your company.
3. Declare the legal status of your business in the UAE.
4. Register a trading name for your company.
5. Fill in the application form in the DED department.
6. State your corporate office and fill the registration forms.
7. Prepare all the necessary documents.
8. Submit every requested information to the DED for final approval.
Steps to Obtain a Food License
1. You need to have your trade license approved before requesting a food license.
2. The blueprint of your ambiance needs to be represented to the authorities.
3. You, being the owner of your restaurant, need to get the approval of the Food Code from the Food Control Department of Dubai.
4. It is necessary for you to accommodate the area of your restaurant, Food storage areas, washing areas, chimney, and separate basin in your blueprint.
5. Visit the DED department with all the above-mentioned information to get registered for your food license.
Creating the menu
Before you open your restaurant’s door, you need to curate the menu and decide what all it would feature. You also need to engineer your menu the right way and select and price the menu items correctly so as to cover your Prime Cost, which includes the Cost of Goods Sold and the Labor Costs.
You also need to craft your menu carefully so that your customers would be inclined to order the high-profit items. You can do this by placing the high-profit items at the places which draw the most attention and by writing tempting menu descriptions.
Initially, your menu need not to be completely designed nor do your recipes need to be completely fleshed out. You can gradually keep updating the menu as you gain information about which food items sell well and which do not.
Documents Required for Starting a Restaurant business in Dubai
Trading license.
Food license.
Non-Objection Certificate (NOC) issued by the municipality of Dubai.
Typed BR/1 form.
Ejari Registration Certificate.
Photocopy of the issued trade license.
Passport size photo.
Confirmation report of P.O box.
Memorandum of Association (MOA).
DED letter approving your restaurant name.
Tenancy agreement form.
UAE ID Number
Proof of payment.