Are You Planning on Opening a Restaurant in Dubai or Start a Coffee Shop? Here is what you need to know;
Opening a Restaurant in Dubai? Then considering the statistical figures in the Middle East, the United Arab Emirates without any doubt is one of the largest and fastest-growing economies. The restaurant sector particularly in Dubai, over the past few years, has seen immense growth.
Food has always been a lucrative business industry and taking into considerations, the Middle East is the hub not only for the trading of goods but also for mouth-watering delights from all over the world with authentic cultural cuisines. Dubai is known for tourism and one of the key reason why people travel to Dubai is to experience the world’s finest cuisines and develop their taste bud along with enriched traveling experience. According to the survey from Euromonitor International, by the year 2019, it is anticipated that additional 19,000 outlets will enter in the Food and Beverage Sector in Dubai.
With people willing to try newer cuisines from various geographical areas, the focus on businessmen around the globe are eyeing towards opening a restaurant in Dubai. As we understand one of the most relevant factors of traveling to a foreign country is to indulge in their Local and International available cuisines, there is a huge scope of the restaurant business in Dubai.
Why Opening a Restaurant in Dubai is difficult and how you can succeed?
- Choice of location – Some of the key factors that may identify the score of your restaurant will be accessibility, parking space, commercial and resident properties nearby.
- High rent – As per the facts and studies we suggest that your restaurant rent should not exceed 10% of you expected turnover annually.
- Unidentified Standard Operating Systems (SOP’s) – Not having proper SOP’s may result in bad services and reviews.
- Choice of Menu and Restaurant Concept – The restaurant should not be based on your own taste and personal likes, usually, the restaurant is to serve customers that what exactly will boom the restaurant in customers view.
- Restaurant Staff – The concept of restaurant runs on food and service, the staff is the ambassadors of your business.
Expert Tips For Opening a Restaurant in Dubai Mainland
Unlike any commercial setup, opening a restaurant in Dubai also requires similar elements of successful business planning to ensure a successful business. However the question “Which location should I open my Restaurant in?” plays a vital role in the success ratio.
According to our survey and existing clientele, I have made an assessment to identify the Do’s and the Don’ts for the reference.
The Location When Opening a Restaurant in Dubai
Dubai is an emirate which is home to more than 200 nationalities with unique cultures. What location is suitable for opening a restaurant in Dubai depends on what target market are you trying to serve.
Dubai has various zones which have an impact on the target audience. There are Business zones such as Media City, Education City or Business Bay where most of the Western Expats will be found.Tourist areas such as Jumeirah Road and Dubai Marina will have a mix of Western and Asian. From our experience, the Hotspots” for opening a restaurant in Dubai are Business Bay, Jumeirah Beach Road, and JBR Dubai Marina- but again as said it totally depends on what cuisine you will be serving, what is the market niche and demand.
What are the Dos While Opening a Restaurant in Dubai?
- To initiate the first step with proper business feasibility and planning to have a clear understanding of your market and future forecast on ROIs.
- Do establish a pricing policy with a competitive analysis in order to verify the cost and expenses.
- Do prepare a detailed marketing plan and use proper online platforms which result in more than average percentage of sales.
- Do SWOT analysis with help of professionals about competition around and what strategies could be used.
- Do take necessity approval and NOC from relevant authorities.
What are the Don’ts???
- Don’t try opening a restaurant in Dubai, or in fact anywhere, if you don’t have previous experience.It is best to take advice or hire relevant experienced professionals.
- Be Realistic-Don’t overprice your offerings on the menu
- Don’t develop a menu that you personally prefer, go with the taste of customers.
The Investment Perspective of a Restaurant Business in DUBAI
With reference to existing clients who are successfully running restaurants, cafeteria, and mini restaurant shops, it would be hard to determine a range of investments involved. However, depending on the licensing authorities and lease value, the average cost to establish a decent independent restaurant ranges from USD 80,000 to USD 3 million and above. The basic requirements for leasing out space as per the authority is minimum 750Sqm.
Legal procedures in order to open a restaurant business in Dubai does not take more than a week, opening a restaurant in Dubai may result in very good investment opportunity for businessmen around the world.
What Are The Legal Forms & Types of Restaurant Business in Dubai?
There are majorly three forms of Legal forms that you can consider while opening a restaurant in Dubai.
- Sole Establishment in Dubai
- Civil Company in Dubai
- Limited Liability Company also is known as a Dubai LLC Company
- Free Zone Company formation in Dubai– 100% owned
- Branch Setup in Dubai
Also note that the type of a restaurant license in Dubai as per the Dubai Economic Department:
- Restaurant and Coffee Shops
- Floating Restaurant
- Restaurant and Mini Store
- Multi Restaurants Center
FOOD CODE for Restaurant Business in Dubai
Food Control Department of Dubai Municipality ensures all restaurant start have to follow FOOD CODE in order to attain the final trade license initially from the start of food production to end of food consumption.
You need to get the food safety department approval in Dubai before getting the final trade license from Dubai Economic Department for any kind of restaurant or cafeteria license in Dubai. You will require the following documents to get the Food Clearance from DM.
- Trade license copy or primary approval from authority that issues trade license
- Interior design layout of the premises by registered DM Interior Designer, this is essentially a blueprint of your restaurant.
It is advised to seek assistant of Business Consultant who will guide and assist you with full end to end formalities and approvals. There are also permits required for restaurant business which I can assist you from end to end process.
How to acquire a Restaurant License in Dubai
According to the authority in Dubai, the restaurant size should be minimum of 750 sq.ft. The registered and approved Interior Fitout Contractors will take over the project and follow the checklist from the DM and attain the approvals from Dubai Municipality. The initial approval can be taken from DED however, the final trade license in Dubai to open the gates of the restaurant will depend on Fitout Contractor.
To make it easier to understand the flow and the process of opening a restaurant in Dubai, here is a brief overview of the process;
Step 1. Get your Business Plan and Feasibility developed by a professional.
Step 2. Hire a Consultant or Representative who will facilitate and take care of all kinds of approvals from the Dubai Economic Department
Step 3. Identify and hire an approved Interior Fitout Contractor and complete project.
Step4. After inspection and all is ok you are officially allowed to open doors.
Where & How to Start the Process of Opening a Restaurant in Dubai?
Looking at the options it may seem that opening a Restaurant in Dubai Freezone will cost lower option as compared to Business Setup in Dubai Mainland. However the strict regulations within the Free Zone it is not a prosperous option to opening a restaurant in Free Zone. The most suitable and effective company formation in Dubai is recommended to be an On-Shore Limited Liability Company also known as a Dubai LLC Company formation.
As per the legal structure and commercial law in the United Arab Emirates, LLC structure presents foreign investor as 49% shareholder while 51% of the share will be with Emirati. I suggest to opt for Corporate Sponsor rather than Ideal Local Partner which will eliminate the risk, the Corporate Company will ensure full control over operations, profits, and management to foreign expat. We as a company provide Corporate Sponsor with full signed MOU (Memorandum of Understanding).
As you’ve probably guessed by now, gaining a license and approvals is a critical part of the process. It’s important it is done properly and on time so that you can begin opening the doors to your restaurant or cafeteria as quickly as possible.
Professional consultants with experience in setting various restaurants along with knowledge of which authority permits and approvals will be a great help for consultation in setting up perfect dream restaurant.
In my opinion, an advice by a business consultant is highly recommended and if you feel that you need to get a right kickstart into getting your café, restaurant or food business in Dubai started, I would love inviting you for coffee and giving you extra free tips on doing it just right.
Alternatively , you can reach me directly on firstname.lastname@example.org
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About the author
Mayank Bhagat is an expert on UAE Business setup and has hands on experience onopening restaurant in Dubai Mainland, facilitating immigration and other authority’s approval work including Maid Visa, Family Visa and Resident/Investor Visa in Dubai. His other specialities include sole proprietorship investment in DIFC and Information Technology related setups in DSO. He is available via email on email@example.com or direct call on +971 504057961