How to open a restaurant or cafe in the UAE

In Dubai, you can try dishes from all over the world - there are many expatriates in the UAE who open restaurant businesses. The market is very saturated, competition is high, but there are still promising formats. So, if you have experience in running a restaurant business or promising ideas, you shouldn't miss the opportunity to earn on it.

Why Dubai is a Good Place for Restaurateurs

The restaurant business in the UAE is flourishing. Entrepreneurs are attracted by high demand and excellent returns on investment. However, this also results in intense competition in the restaurant industry. Opening a restaurant, café, or any other dining format is recommended only for those with sufficient experience in the business, who are willing to invest time and money into starting and developing it.

Overall, the UAE is a favorable jurisdiction for businesses, not just in the restaurant sector, and here are the reasons why:

• Absence of corruption.
• Low taxes on entrepreneurial activities.
• Simplification and acceleration of market entry for foreign entrepreneurs (previously, 51% of the company had to be owned by a local resident, but this rule has now been abolished).

However, while in the past, entrepreneurs could spend months analyzing the market, communicating with local partners, and studying cases, now many are ready to invest instantly in Dubai's economy. In the conditions of enormous competition, restaurateurs have started to act more swiftly. Those who understand how the local market works are reaping high profits.

How to Open a Restaurant in the UAE: Specifics and Features

The restaurant business is one of the most interesting in the UAE. However, without a clear understanding of the market, adequate experience, expert assistance, and significant capital, starting and staying afloat is challenging because the restaurant business in the UAE has its own specifics, different from Russian realities.

To open a restaurant or café in the UAE, a large initial capital is required. Rent, employee salaries, operational expenses for purchasing products are very high, and at the beginning of the journey, you also need to obtain documents: licenses, permits. This takes a lot of time and money.

Finding a good location is difficult. Professional franchise companies operating dozens of brands work in Dubai. Even developers, state-owned oil companies, and other large enterprises develop the catering direction - it is not easy to compete with them.

Foodservice establishments are often located in free zones. The administration of the free economic zone may intervene in the business. For example, strict requirements are imposed on the exterior (for example, doors cannot be moved, and umbrellas for the summer terrace can only be ordered from a specific company).

Dubai is one of the largest transportation hubs in the Middle East. And this is a significant advantage because in the UAE, you can easily ensure fast import of any products. Michelin-starred chefs in Dubai agree that getting ingredients of exceptional quality and freshness is not a problem. Often, you can get products even faster than in Europe.

Other region-specific features to consider for restaurateurs:

• Multinationality. The UAE is a country of expatriates. Concepts demanded in tourist areas may not be in demand in areas where locals live. For example, the profitability of restaurants in Bluewaters Island depends on whether the observation wheel is launched.
• Alcohol license limit. In some city areas, selling alcohol is prohibited by law. The cost of the license depends on the volume of sales, so if you plan to open a small establishment, this may not be profitable.
• Lease contract specifics. You must pay until the end of the lease term, even if the contract is terminated early. Also, consider the difficulty of finding a location. There may be a competition of 30-40 applicants for good locations.

How to Open a Restaurant in Dubai: Step-by-Step Recommendations

To open a restaurant in Dubai, you need to analyze the market, develop a concept, and choose a strategically correct location. Usually, restaurateurs come to the UAE with several concepts in mind. When they familiarize themselves with the local market and communicate with entrepreneurs, ideas are adjusted. Afterwards, a business plan needs to be developed, and a venue needs to be reserved.

Main Formats of Restaurant Business

Choosing a format is crucial from the start – it determines many things, including the criteria for finding a location for a café or restaurant. C-store format establishments - analogous to street food - are most commonly found. Opening street food "inspired by" Korean, Chinese, Italian, or other cuisines is easier than cafes. If you decide to proceed, choose the franchising format, as starting a network from scratch is impractical.

Businesses in the meal kit format are popular - subscription-based delivery of ready-made meals, which can be simply heated before consumption, designed for a day or week. The number of such projects is growing, but the format is not difficult to deploy, and there is still demand and a place in the market. If you act quickly, you can achieve good profitability.

The dark kitchen format is also attractive to entrepreneurs. This is a new phenomenon for the global restaurant industry. For full-fledged operation of a classic dark kitchen, oriented towards delivery in the nearby area, a small premises is sufficient. The classic assortment of dark kitchen cafes includes sushi, wok, pizza - food that does not require a lot of equipment and special skills.

Registration of Restaurant Business

A restaurant or café can be registered in a free economic zone or on the mainland. There is a difference in available legal forms and permitted operating territories (companies registered in free zones can only provide services and sell goods within their zone). To register a company in the mainland zone, you need to obtain special permission from the Department of Residents and Foreigners Affairs, and in free zones - apply to the administration.

Obtaining Licenses and Permits

When the business plan is ready, it is necessary to register the company and obtain a special license, which needs to be renewed annually. Requirements for obtaining permits:

• location at least 30 meters away from waste disposal and removal areas;
• provision of a detailed plan indicating premises for storage and processing of products, sanitary zones, smoking areas, entrances and exits.

For preliminary approval, you need to contact the Dubai Department of Economic Development, then (with the permission of the previous authority) - to the Department of Food Control. With the obtained permission, you should return to the Department of Economic Development for a commercial license to open a restaurant.

Depending on the specific situation, other permits from municipal authorities may be required:

• if you plan to open a hookah bar, an additional license must be obtained from the Department of Public Health and Safety. To obtain approval, ventilation and air conditioning systems requirements must be met;
• to place an open terrace near the new restaurant, you need to approve the plan with the Planning Department, Transport and Roads Authority, or Parks Department;
• when opening a delivery restaurant, keep in mind that each vehicle used to transport products must be separately registered. Transporting products without special marking is prohibited.

All warehouses intended for storing food products undergo mandatory inspection. All products, beverages, and packaging must be certified.

In addition, standard requirements for doing business in the UAE apply to restaurant businesses. Companies starting operations must:

• open a bank account;
• register with the tax authority;
• meet the requirements for attracting officially employed human resources.

The UAE has complex and incorruptible bureaucracy. It will take from six to nine months to obtain all permits to open a restaurant. To quickly (as much as possible) register a company and open a restaurant in Dubai, start with a consultation with The Level Consulting experts. We register businesses turnkey, provide support in the process of obtaining a business visa (equivalent to a residence permit), and opening bank accounts, and offer outsourcing services in the UAE.

How Russian Restaurateurs Work in Dubai

Russian restaurateurs have been operating in Dubai for a long time. They successfully develop projects in the food industry, which have proven themselves well in Russia. Recognized gurus of the restaurant business are unlikely to share their secrets - you can only read and listen to what is available in the public domain, and supplement it with your own experience and knowledge.

Do not expect specific advice from more experienced colleagues or free consultations. Life in the UAE is more expensive than in Moscow, so even an hour of work of a business consultant costs significantly more. Seek consultation from The Level Consulting to get assistance with business registration, property selection, and other issues.

By the way, due to the complexity of the market in the Arab Emirates, entrepreneurs who do not have a business in Russia are increasingly considering the option of buying an existing business. In Dubai, this strategy is justified. Due to the peculiarities of bureaucracy and the mentality of local residents, starting a new business from scratch can take three to four times longer than buying and re-registering an existing one.