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Business setup in Dubai UAE Guide

How to Open a Restaurant in Dubai: A Step-by-Step Guide.

Discover how to open a restaurant in Dubai with this comprehensive step-by-step guide, covering licenses, permits, and key approvals.

Vanamali Metta
Aug 21, 2024

Starting a restaurant in Dubai is an aspiration for many entrepreneurs. With its diverse population, thriving tourism industry, and a strong economy, Dubai offers a unique opportunity for the restaurant business. However, navigating the legal requirements, permits, and business setup process can be complex. This guide will walk you through each step to help you successfully open a restaurant in Dubai.

Steps to start a Restaurant Business in Dubai, UAE :

Step 1: Market Research and Business Plan:

Before you dive into the process of opening a restaurant in Dubai, it’s crucial to conduct thorough market research. Understand the local food scene, identify your target audience, and study your competitors. Dubai is home to a diverse range of cuisines and dining experiences, so pinpointing your niche is essential.

Key Considerations:

  • Target Market: Who are your customers? Are they locals, tourists, or expats?
  • Cuisine Type: What type of cuisine will you offer? Will you focus on high-end dining, casual eateries, or fast food?
  • Location: Where will your restaurant be located? High foot traffic areas like Downtown Dubai, Marina, or JBR are ideal but come with higher rents.
  • Competitors: Who are your competitors? Evaluate their strengths and weaknesses to identify your unique selling proposition.

After gaining a thorough understanding of the market, create a comprehensive business plan. This should include your restaurant’s concept, menu, marketing strategy, and financial projections.

Step 2: Choose a Business Structure:

The next step in the process to open a restaurant in Dubai is to choose the right business structure. You can either set up your restaurant on the mainland or in one of Dubai’s free zones. Both options come with their own advantages and disadvantages:

  • Mainland Business Setup: Allows you to operate anywhere in Dubai, giving you access to a larger market. However, Some cases it requires a local sponsor who will hold 51% of your business shares.
  • Free Zone Setup: Offers 100% ownership and tax exemptions, but you’ll be limited to operating within the free zone and catering primarily to businesses within that zone.

Given the nature of the restaurant business, a mainland setup is often more advantageous as it allows you to cater directly to the local population and tourists.

Step 3: Obtain a Restaurant Business License

Securing a restaurant business license in Dubai is one of the most critical steps in your journey. The Dubai Department of Economic Development (DED) is the governing body in charge of issuing business licenses.Here’s what you need to do:

Requirements for a Restaurant License in Dubai:

  • Trade Name Registration: Choose a unique name for your restaurant that complies with Dubai’s naming conventions. The DED must approve this name.
  • Initial Approval: Submit an application to the DED for initial approval. This includes presenting your business plan, passport copies, and other required documents.
  • Memorandum of Association (MOA): Draft and notarize an MOA with your local sponsor, outlining the distribution of shares and responsibilities.
  • Lease Agreement: Secure a commercial space for your restaurant and obtain a tenancy contract. The location must meet the Dubai Municipality’s health and safety regulations.

Step 4: Secure Necessary Permits and Approvals

Opening a restaurant in Dubai requires several approvals and permits from different government bodies. These include:

  1. Food Safety Permit: Issued by the Dubai Municipality, this permit ensures your restaurant complies with food safety standards. Your kitchen layout must be approved, and your staff must be trained in food hygiene practices.
  2. Health and Safety Permit: Also issued by the Dubai Municipality, this permit covers the overall health and safety conditions of your restaurant, including ventilation, lighting, and waste management.
  3. Signage Permit: If you plan to display a signboard outside your restaurant, you’ll need a signage permit from the Dubai Municipality.
  4. Liquor License: If you plan to serve alcohol, you must obtain a liquor license from the Dubai Police and the Department of Tourism and Commerce Marketing (DTCM). Note that this license is only granted to restaurants located in hotels or certain designated areas.
  5. Obtain Cafeteria License in Dubai: If you are opening a smaller establishment like a cafeteria, you'll need to obtain a specific cafeteria license. This involves similar procedures but with potentially different fee structures and requirements.

Requirements and Documents Needed:

  • Trade License: Copy of your initial trade license approval.
  • Passport Copies: Provide copies of the passports of all business partners.
  • Tenancy Contract: Valid tenancy contract for the restaurant premises.
  • No Objection Certificate (NOC): A NOC from the property owner if necessary.
  • Approval Drawings: Detailed drawings of the restaurant layout for approval by the Dubai Municipality.
Cost Considerations:
The costs involved in obtaining a restaurant business license in Dubai can vary depending on several factors, including the size of the restaurant, its location, and the type of licenses required. On average, you can expect the total cost to range from AED 30,000 to AED 50,000, including:
  • Trade License Fees: Varies depending on the business structure and trade name.
  • Municipality Fees: For approvals related to health, safety, and food permits.
  • Liquor License Fees: If applicable, fees depend on the location and type of alcohol served.
  • Fit-Out Approvals: Costs associated with getting approval for the restaurant’s interior design and kitchen setup.
How We Can Help:

At Plan My Firm, we specialize in helping entrepreneurs and businesses successfully open a restaurant in Dubai. From obtaining the necessary licenses and permits to offering comprehensive business support services like residency visas(UAE golden visa,Investor visa etc..), bank account opening, business contract drafting, and more, we ensure a seamless setup process.

Our team of experts is here to guide you every step of the way, ensuring that your restaurant meets all regulatory requirements and is ready to welcome customers. Contact us today to learn how we can assist you in bringing your restaurant vision to life in Dubai.

FAQ:

Can I open a restaurant franchise in Dubai? What are the requirements?

Yes, you can open a restaurant franchise in Dubai. Requirements typically include securing the franchise agreement, obtaining the necessary business and food licenses, and adhering to local regulations regarding branding and operations.

What are the steps to open a branch of an existing restaurant in Dubai?

To open a branch, you must follow similar procedures as starting a new restaurant, including obtaining a new business license, meeting Dubai Municipality's health and safety standards, and ensuring compliance with franchise or brand requirements.

What are the regulations for foreign investors opening a restaurant in Dubai?

Foreign investors can open a restaurant in Dubai, but they must partner with a local sponsor for a mainland business or establish their restaurant in a free zone to retain 100% ownership. Compliance with UAE regulations and business setup procedures is required.

How does the approval process differ for a franchise restaurant compared to an independent restaurant?

The approval process for a franchise restaurant involves additional steps such as obtaining franchisor approval and adhering to brand guidelines. Independent restaurants primarily need to focus on local regulations, licensing, and health and safety compliance.

What is the difference between a cafeteria license and a full restaurant license in Dubai?

A cafeteria license is typically required for smaller establishments offering limited food and beverage options with fewer regulations compared to a full restaurant license, which is needed for larger dining establishments with more extensive menus and operational requirements.

Are there specific requirements for international restaurant brands looking to enter the Dubai market?

International restaurant brands must comply with UAE business regulations, including obtaining local approvals, adapting to local market conditions, and possibly partnering with a local sponsor. They must also ensure compliance with food safety and health regulations.

What are the costs associated with obtaining a franchise license versus a regular restaurant license?

Franchise licenses often involve higher costs due to franchise fees, ongoing royalty payments, and adherence to brand standards. Regular restaurant licenses include costs for business registration, food safety, and health permits.

How does the approval process differ for a restaurant that plans to serve alcohol versus one that does not?

Restaurants serving alcohol need additional approvals, including a liquor license from the Dubai Police and the Department of Tourism and Commerce Marketing (DTCM), and must comply with stricter regulations compared to those that do not serve alcohol.

How much does it cost to start a restaurant in Dubai?

The cost to start a restaurant in Dubai can vary widely based on factors such as location, size, and type of restaurant. On average, you might expect to spend between AED 30,000 to AED 50,000 for initial setup, including licensing, permits, and initial rent. Additional costs for fit-out, equipment, and staffing can increase the total investment significantly.

How do I choose the right location for my restaurant?

Choosing the right location involves evaluating factors such as foot traffic, visibility, and accessibility. Consider areas with high customer potential, proximity to other businesses or attractions, and rent affordability. Conduct market research to understand the local demographics and competition to ensure the location aligns with your restaurant’s concept and target audience.

What are the health and safety regulations I need to comply with?

Health and safety regulations include compliance with Dubai Municipality's food safety standards, which cover hygiene practices, kitchen layout, and sanitation. Your restaurant must pass inspections related to food handling, storage, and overall cleanliness. Additionally, you must adhere to fire safety regulations and provide a safe environment for both staff and customers.

How long does it take to get all the necessary approvals and licenses?

The timeline for obtaining all necessary approvals and licenses can vary but typically takes between 1 to 2 months. This includes time for initial trade license approval, health and safety permits, food safety certifications, and any additional permits such as liquor licenses. The process may be quicker or longer depending on the efficiency of document submission and compliance.

What kind of insurance do I need for my restaurant?

Essential insurance types for a restaurant include property insurance to cover damage to the premises, liability insurance to protect against claims of injury or damage, and business interruption insurance to cover losses during unexpected closures. Additionally, consider worker’s compensation insurance to cover employee injuries and health insurance for staff.

Can I operate a restaurant in a Dubai free zone, and what are the limitations?

You can operate a restaurant in a Dubai free zone, but you will be limited to serving customers within the free zone and may face restrictions on operating outside the zone. Free zone setups offer 100% ownership and tax benefits but require compliance with the specific regulations and guidelines of the free zone authority.

What are the requirements to obtain a food safety permit in Dubai?

To obtain a food safety permit, you must submit your restaurant's layout plans for approval, undergo a health and safety inspection, and ensure that your staff is trained in food hygiene practices. You will also need to provide documents such as the trade license, tenancy contract, and proof of compliance with Dubai Municipality’s food safety standards.

 
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