How to Open a Restaurant in UAE?
Given that Dubai is a prominent tourist destination for people from all over the world and offers a broad range of cultural activities and wonderful cuisine, it is not surprising that numerous restaurants have been established there in an attempt to penetrate the global market.
If you want to open a restaurant in UAE, you should be aware that the United Arab Emirates has one of the region’s largest and most rapidly expanding economies. In recent years, the restaurant business, particularly in Dubai, has seen spectacular growth.
Given that food has always been a lucrative business, it would make sense for the Middle East to act as a major distribution hub for delightful culinary delights from across the world. In 2019, more than 2,500 restaurants opened their doors in the Emirate, and with the arrival of even more visitors, this number is certain to increase considerably in the coming years.
According to recent estimates, the worldwide value of the food service business is close to $3 trillion. And there are no signs that it will slow down. The UAE follows a similar path. This represents 4.7 million potential clients for business owners. If you accomplish this correctly, you may be pocketing a substantial portion of your yearly revenue.
In light of this guide, we will be reviewing all the protocols required to open a restaurant in UAE.
Why You Should Open a Restaurant in UAE?
The restaurant sector is not as easy as it may first seem. During the process of establishing their enterprises, many would-be restaurateurs overlook crucial elements, resulting in the final demise of their operations. However, once you get the hang of things, there are several benefits to being a part of this profession. What follows:
Successfully opening a restaurant starts with finding the appropriate site. Due to Dubai’s popularity as a tourist and business destination, a large number of foodies make their way to the city. As a result, Dubai as a whole is an ideal location for establishing a restaurant company.
Now, where exactly are we in Dubai? You will need to perform extensive research for this. It requires deciding whether to create a site on the mainland or inside a free zone.
2. Infrastructure, both physical and social
The Dubai government has spent no effort in ensuring that foreign investors would have no trouble running a restaurant business, going so far as to eliminate any conceivable hurdles. This resolve has led to the creation of world-class infrastructure and amenities, including business parks, office spaces, warehouses, transportation, connection, and utility services.
3. Tax Exemptions
Acquainting yourself with the tax regulations of the host nation and structuring your company so that you pay the least amount of tax obligation feasible are two of the most major hurdles associated with opening a restaurant in a foreign country.
The free zone in Dubai is one of the several tax incentives offered by the city; it stands out from the others since it exempts enterprises from paying any taxes, has no corporate or individual income tax, and offers a variety of additional benefits. As a consequence, these tax advantages may be financially advantageous to a restaurant that is just starting out.
Mistakes to Avoid When Opening a Restaurant
This section highlights some common mistakes that people tend to make when they open a restaurant in UAE. Skim through this and make sure you don’t fall prey to such mistakes as well.
1. Poor Choice of Location
When taking into account the financial commitment involved in opening a restaurant, it is reasonable to presume that you have done your research and calculated the costs and potential profits associated with operating the business in the given area.
However, make sure that you give careful consideration to all of the concrete elements of the property, such as its visibility, foot traffic, customer parking, surrounding noise, local customers, and local competitors.
If there are many businesses that are comparable to yours in the area, how are they doing during the day, and how will you differentiate yourself from the competition at your specific location? In addition to this, take into consideration the confines of your space as well as any planned developments in the surrounding area.
It is possible to make a mistake that will cost you both time and money if you overestimate income, which may be partly caused by choosing the incorrect location for your specific brand.
2. Absence of Written Contracts
A food business plan is very necessary if you want to open a restaurant in Dubai or anyplace else in the United Arab Emirates (UAE). It goes into further detail about the substance of the structure, including topics such as the location of your restaurant in Dubai, the costs associated with marketing, the remote delivery of meals via Dubai food ordering apps, and a variety of other activities.
Because of COVID, many food companies have been forced to revise their business plans in order to include new models that will assist the company in growing to a larger scale. It is a sensible business decision to adjust your restaurant’s launch plan in Dubai to accommodate new market trends as they emerge. Because of this, the lack of formal contracts will not work in your favor.
3. Settle in a Mediocre Location to Reduce Your Rent
When deciding to open a restaurant in the UAE, “Location” is an extremely important factor, as was noted previously. Many people who want to start a restaurant business in Dubai make the common mistake of selecting a location with a lower rent in the hope of releasing more profits.
This is not how it works. Rather, in order to optimize one’s profits, one should look for the finest site possible, one that will enable a restaurant to thrive.
4. Expect To Start Making Money From Day One
The road to success is not an overnight journey. You will have to give it the best try you can, whatever the difficulties you may have to overcome or the roadblocks that may be in your path.
Throw off the idea that you’ll start making a profit on the very first day of operation of your company if you want to be a successful business owner. You need to be ready for the worst-case scenario. Have faith in the procedure, work to enhance your services, and patiently wait for the desired outcome.
Best Locations to Open a Restaurant in UAE
Since the restaurant’s location is just as crucial to its success as the food and service it offers, it is crucial to do your homework before committing to a concept, drafting a business plan, or signing a lease. You need to make sure that the surrounding region is accepting of the plan and has the right kind of people living there before you can start implementing it.
When establishing a presence in Dubai, most businesses still prioritize mainland Dubai company registration. The sole distinction between a mainland corporation and an onshore firm is that the former must be registered with the appropriate Emirati government institution.
The business license must be issued by the Department of Economic Development in the relevant Emirate. The lack of trade barriers is the primary characteristic of a mainland United Arab Emirates-based firm.
The United Arab Emirates (UAE) allows mainland companies to do business in both domestic and international markets after a shareholder has invested in the firm.
A free zone company is one that was formed in a special zone that is administered by a single Emirate. It is estimated that 40 free zones are now functioning in the United Arab Emirates. Activities inside free zone jurisdictions are governed by the Free Zone Authority, an agency of government.
It is a widespread myth that investors cannot run restaurants in free zones, however, this is not true. However, in some free zones that are also residential, it is legal to do so, although in industrial sectors it is not.
Inside the United Arab Emirates (UAE), acquiring a license to run a restaurant is possible. The Dubai Airport Free Zone (DAFZA) and the Dubai Multi Commodities Centre (DMCC) are two examples of jurisdictions in this country where a restaurant may get a commercial license.
Businesses inside a free zone would be confined to operating solely within the zone’s physical limits. The restaurant setup costs in Dubai would begin at around AED 15,000 if these premises were the location where the company was established.
Following is a list of free zones popular for opening restaurants
- Jebel Ali Free Zone Authority (JAFZA)
- Ras Al Khaimah Ecnomic Zone (RAKEZ)
- Dubai Multi Commodities City (DMCC)
- Dubai Airport Free Zone Authority (DAFZA)
- Dubai Internet City
- Dubai World Trade Center (DWTC)
- Ajman Free Zone
- Dubai Studio City (DSC)
- Dubai Media City
How to Open a Restaurant in UAE? (Easy Steps)
Setting your shop in a free zone or mainland is a simple and quick process. Minimal documentation is necessary for the following phases of the procedure:
Step 01: Choose The Preferred Jurisdiction
The very first step in launching a restaurant business is picking the legal framework under which you’ll be doing business. You may decide which one to go with (free zone or mainland) depending on which of the available pursuits is most suitable for your business.
Step 02: Acquiring a Food & Restaurant License In Dubai
The next step is to initiate the licensing procedure for your business. In order to meet this prerequisite, you will need to apply for a license with the free zone authorities. After this is complete, the food safety authorities must approve your restaurant’s design plans and issue a food license.
If you want your license to operate in the UAE to remain valid, you must continue to follow the UAE’s food code. Liquor, pork, and delivery service licenses might be required in addition to the ones already mentioned.
Step 03: Required Documents
Next, submit your application. In this round of the process, you’ll also need to provide paperwork including a copy of your company license and blueprints of your establishment’s layout and storage areas.
- Trade License’s Copy
- Business Plan
- Blueprint of your restaurant
- Additional Permits such as Liquor permit
- Investor’s Visa and Passport Copy
- Passport sized Photographs
Step 04: Opening a Business Bank Account
Having a business bank account in a tax haven would make it simpler for the investor to monitor business expenditures, ascertain their tax liabilities, and better manage the firm’s cash flow. Identifying a bank that offers the services most suited to your company’s needs is crucial. This is done so that the bank can meet all of your company’s banking needs, eliminating the need for you to go elsewhere.
How Airzone Can Help in Opening a Restaurant in UAE
The idea to open a restaurant in UAE might be profitable if done so in an area that is conducive to the kind of business being run. If you’re thinking to start a restaurant business in Dubai, you should be well-versed in the procedures that may help you grow into a successful operation.
If you need help getting started, reach out to us at Airzone. Airzone can assist you in getting your business off the ground if you’re planning to launch one in Dubai.
We can guide you through the process of launching a business in Dubai thanks to our experience and knowledge in the field. We’ll connect you with the right service providers to aid in the development of your enterprise in the United Arab Emirates.
You can get assistance from our dependable partners in Dubai and obtain the necessary trade licenses. We’ll put you in touch with the appropriate experts to handle anything from visa applications to crucial administrative tasks while you concentrate on growing your business.
If you want to learn more about how to set up a business in Dubai, we have a comprehensive guide for you. With a thorough understanding of the UAE’s business scene, you should be well prepared to establish a company in the country. If you need information regarding free zones, we have detailed articles on different free zones in the UAE.