Opening a Restaurant in Dubai – Licensing & Other Formalities

The Middle East, and specifically Dubai, is the place to go for experiencing gastronomic adventures! Naturally, sightseers, businesspersons, and so on, indulge their taste buds to the maximum on novel culinary delights, as well as local flavors, while they are in Dubai/Abu Dhabi. This kind of ‘food popularity’ is prompting more and more businesspersons to consider entering the restaurant business and making huge profits in the bargain. Now, if you are keen to enter the fray too, you should bear certain considerations in mind.

‘Licensing’ Considerations

Trade License

You will have to approach the Department of Economic Development and Department of Tourism and Commerce Marketing for this license. The authorities will want to know what kind of food establishment you desire to set up. For instance, you could opt for –

  • Offering catering services at temporary/permanent social/food events, cruise ships, canteens or desert camps
  • Launching cafes, restaurants, cafeterias or hotels
  • Taking up mobile vending services or serving kiosks
  • Setting up bakeries
  • Building warehouses for storing food or food factories
  • Launching butcheries
  • Setting up departmental stores, supermarkets or groceries
  • Becoming manufacturers of food packing materials or providing food supplies
  • Linking up with schools and hospitals to operate food services

Food License

Once you obtain this license, make a copy of it and show it to the Food Safety Department. They are responsible for issuing the Food License. In case, you have to wait for some time before the Trade License actually reaches your hands, you may gain a primary approval from the authorities that issue it and show it to the Food Safety Department.

Along with this, you will have to submit a blueprint displaying the interior layout of your business premises. To illustrate, the blueprint of a restaurant must highlight the entry and exit points, spaces allotted to storing of food and equipment used for processing of food, location of windows and ventilators, and space allotted for supportive equipment (dish washers, washing machines, and so on). The Food Control Department will go through your blueprint and either approve/reject it, or even suggest modifications.

A third document relates to an approval letter from the Planning Department, in case, your restaurant lies outside a shopping center.

NOC

Once again, it is the Food Safety Department, which has to take charge of issuing the No Objection Certificate. The NOC will show up on your trade license, along with the location of your restaurant. You may have to shell out 10,000 AAED for obtaining the Food Establishment Permit.

Extra Licenses

It could be that you desire to offer liquor to your customers too. Then, you must approach the Dubai Police headquarters, for obtaining a special liquor license. Ensure that you take along a copy of your passport, two photographs and an application fee, with you. The Dubai Government will expect you to pay 30% tax on liquor, along with other fees linked to the sale of liquor. These charges could relate to import of liquor, sale of liquor, and so on.

Apart from a liquor license, you may apply for a liquor permit, Ramadan permit, delivery permit or vehicle permit (food transportation), pork permit (handling and serving pork), or food consignment release license.

There is also the Food Code, a 2013 initiative of the Food Control Department of Dubai Municipality. This Department offers guidelines on how to safely import and export hygienic food products, as well as maintenance of hygiene right from the time of food production until food consumption.

Other Considerations

Location

This is vital, for people will only visit easily accessible places. You may go for a Free Zone, believing it to be a less costly affair. However, there are strict regulations for trading within a Free Zone, which may give you profits, but not make you prosperous.

The other alternative is going for an On-Shore Limited Liability Company or LLC. However, according to UAE commercial laws, you will have to link up with a partner for commencing your business. This partner may be an individual or organization, who will own at least 51% of the shares of your restaurant. You will own only 49% shares. Therefore, it would be best to find local establishments offering PRO services too. They will grant you control and management of your company, along with retention of assets and intellectual property.

Expenses

Be prepared to spend at the initial stages, while opening your restaurant. You may have to spend anywhere between AED 500,000 to AED 1.25 mn on various things. They include capital, working capital, licenses, renting of premises, permissions, visas for foreign staff, occupational health cards and insurance. Then again, there are sponsor fees, training, stock, software for accounting, food production equipment, supportive equipment, collaterals, professional website, testing of equipment, accountant, consultant for your restaurant, EPOS system and fire fighting test certificate.

Dos and Don’ts

  • Research the area where you plan to launch your business thoroughly, especially where demographics and footfall are concerned. Do not fall for the very first unit that your real estate broker shows you.
  • Keep track of permissions and licenses, such that you do not get into trouble with your property owner or the authorities. You do not want delays eating into your working capital.
  • Have a complete business plan and marketing plan outlined on paper, wherein you are realistic about first-year sales, profits and competition.
  • Do not overspend or under spend. Hire a specialist in restaurant accounting.
  • Buy the necessary equipment only when you are sure about the kind of food that your restaurant plans to offer.
  • Set up a pricing policy, which will help you cover your overheads, but at the same time, does not ‘loot’ customers.
  • Your menu cards are dependent upon the ingredients and associated costs.
  • Ensure that your restaurant will have all the requisite power supply 24 x 7.

On a final note, if you lack experience in this arena, do consult us for setting up your restaurant business in Dubai/Abu Dhabi.

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Contact us at our office in Dubai or submit a business inquiry online.

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