With its majority population of expatriates, Dubai has risen as one of the world’s most diverse food markets. This along with its status of being a global tourist destination has led to the addition of tens of thousands of new food businesses in the past few years.
In the year 2019 alone, more than 2500 restaurants established themselves in the Emirate and with the influx of more foreigners, that number is expected to grow exponentially in the coming years.
With this information now known, it is clear that starting a restaurant in Dubai could be a great financial decision. The following are the requirements and steps that you need to take:
Which License is Required to start Restaurant Business in Dubai?
To start your restaurant business, you will need to obtain a Dubai trade license as well as a food license. For the former, you must approach the Department of Economic Development (DED) and provide them the documents that they require.
The same process goes for the latter, this time with the Department of Food and Safety. Once you have acquired both licenses, you may proceed with the later steps. Failure to do so may result in the premature blacklisting of all of your business aspirations.
The Requirements for Restaurant Business Setup in Dubai
To start a restaurant in Dubai, you will need to fulfill two types of requirements: the legal and physical requirements.
Prior to applying for a trade license, you will need to take the following steps.
1. Finalizing a Business Plan
You need to draw up and finalize a business plan which contains your vision, aim, goals and budget. The document must state what your intentions and activities are, as well as what your back up plan is, should you face any unforeseen complications. This process is handled and supervised by the DED.
Moreover, if you plan on acquiring a pork and liquor license, you must submit a special request for them individually.
2. Select the Region
There are two regions you can choose to set up your restaurant in:
- Free trade zone
- Mainland area
Which Region suits your Restaurant and Why
Expats usually prefer to set up their businesses in the FTZs due to the condition that they can own 100% of their company and not require a local sponsor. On the other hand, setting up a business in the mainland requires you to allocate 51% of your company to a local Emirati who will act as your sponsor.
When it comes to restaurants, however, the popular choice is to set up in the mainland, this is because establishing a restaurant in a Free Trade Zone bounds you to operating within that specific area. Mainland’s however allow you to expand your business to any part of the nation, which is ideal if you are looking to open up multiple branches.
3. Select Restaurant Location
After narrowing down your business plan and region, you can then pick the physical location of your restaurant. A lot of thought must go behind this as there are multiple factors to consider such as the regularity of customers for a certain cuisine in an area and whether or not the hygiene standards are met. Additionally, there are permits that need to be obtained such as:
3.1 Permits you need to obtain for below Food Items
- Pork license
- Alcohol license
- Permit for delivery
- Permit for operating in Ramadan
This is the second prerequisite that needs to be fulfilled, which entails providing a map and blueprint for your restaurant with factors including:
- The interior design plans
- Location for food storage
- The ventilation routes
- Fire hazard solution
- Entrance and exit points (including emergency exits)
Architectural Requirements for the premises
In addition to this, you must also make sure that the premises meet the architectural requirements. They are as follows:
- The floor, counter and walls need to be non-absorbent and fire safe.
- Individual wash basins to clean meat, vegetables etc.
- The kitchen must cover 40% of the total area of the restaurant.
- A proper ventilation system in the kitchen.
There are additional factors to consider according to the activities you plan on carrying out. A business set up agent could provide you a detailed and tailored list according to your plans and needs.
How to Obtain Food and Trade License in Dubai
Once you have met all of the above-mentioned requirements, you may apply for your trade licenses. Firstly, you must submit your application along with the relevant documents for initial approval.
Steps to follow for Trade License Initial Approval
- Select a name for the company
- Choose business activities.
- Complete application and submit to Department of Economic Development (DED)
- Rent out a suitable restaurant space and obtain the tenancy contract
- Seek approval of the tenancy contract from Ejari (Dubai Land Department)
- Get approval from Department of Tourism and Commerce Marketing (DTCM)
- Submit paperwork and relevant documents to DED
- Pay the Dubai trade license fees once approved
After receiving the DED initial approval, you may then approach the Food and Safety department for your food license.
The Food Safety Department is responsible for providing the Food License in Dubai. In order to obtain the food and safety license, you must first produce the trade license in Dubai. In addition, these are the requirements for obtaining the food and safety license:
Required Documents for Dubai Trade License
To summarize the documents, you will need:
- Initial Approval Letter from DED
- A finalized and detailed business plan
- Premises tenancy contract
- Blueprints and floor plan of restaurant
- Memorandum of Association with your local sponsor (if you choose to set up in the mainland).
Requirements to obtain Food Safety License
- Copy of the trade license or primary approval from the authority that issues trade license, which is DED for mainland, and the relevant free zone authority for a free zone
- Interior design layout of the premises (blueprint) which includes:
- The entry and exit passages
- Space for processing food
- Area for storing food
- The windows and ventilation system
- Location of food equipment that will be used to prepare the food
- Dishwashers, and other supportive equipment
Upon attainment of the food and trade license, you will be granted permission to start your restaurant in the city-state. Keep in mind, however, that you may be asked to obtain additional licenses, depending on your business activities. This includes:
Food Activities that requires more Licenses
If you lie in any of the below business activities then you might need to have some other licenses before going for below mentioned activities. Below are the activities.
- Food consignment release license
- Pork permit for handling and serving pork products
- Vehicles permit for transporting food products
- Liquor License
Trade License Fees and Other Costs
The estimated cost of getting a trade and food license ranges from AED 10,000 and 15,000. However, the exact cost of starting a restaurant in Dubai will depend on a number of factors, including the location, restaurant size, additional approvals, supplies, and cost of ingredients.
Some costs to keep in mind while calculating the cost of starting a restaurant in the UAE are:
- Staff Training
- Capital costs
- Staff Visas
- Interior Design
- Kitchen Appliances
- Opening Stock
For a more clear estimate of the business setup costs of your restaurant, we recommend getting a consultation from one of our expert company formation agents. We will be able to provide a more accurate cost breakdown after learning the particulars of your business.
Visa Eligibility for a Restaurant Business in Dubai
To run a business in Dubai, you need to obtain a residence visa for yourself. After getting it, you may then proceed to apply for the visas of your dependents, these can include:
- Domestic help
Keep in mind though that the number of visas you can apply for also depends on how big your restaurant is and your invested capital and what type of license you are applying for.
Steps for obtaining Residence Visa
The steps for obtaining the residence visa are briefly highlighted below:
- Get registered for E-Channel services for mainland visa acquisition
- Apply for entry permit or employment visa. It is a temporary visa that is valid for 60 days. After getting this visa, you will need to change your status. This will activate your entry permit.
- Appear for medical fitness test, which includes blood test for any infectious disease and a chest X-Ray. The result usually takes three days.
- Obtain your Emirates ID card
- Residence visa stamping. This is when you get an actual visa sticker in your passport. Stamping process takes 15 days usually. After successful visa acquiring, you can apply for your family, dependent or even for your employees.
The total visa process should take between 30-40 days after which you can legally reside and operate your business in the Emirate. A business setup consultant can guide you through the process to avoid any complications or errors.
Considering all the facts, establishing your restaurant in Dubai could be an amazing financial decision. The overall process is not too complicated either, however, if you are new here and are not familiar with the legal structures, it can get slightly confusing. It is for this reason that we recommend enlisting the services of a business set up consultancy in Dubai.
We can help you by giving recommendations regarding the location, name, and target market in an area, as well handle all the paperwork. In addition to this, we can also connect you with a reliable local sponsor on favorable terms and take care of future aspects such as trade license renewal.
Contact us today for an expert consultation!