Dubai is a land where local food and cuisines from every corner of the world are available. This is due to the diversity in population and the higher number of expats compared to locals. It is also the reason for the expansion of the restaurant industry.
The restaurant industry is undoubtedly one of the most thriving industries as profit margin in restaurant business in Dubai is very high. Before stepping into opening a restaurant it is important to have information about the procedure and restaurant license cost in Dubai.
Types Of Restaurant Licenses in Dubai
In Dubai, there are different types of licenses available for opening a restaurant. Each type of license is specific for specific businesses such as fine dining restaurants, cafe, bakeries, and fast-food outlets. Having information about each type will help you in choosing the right type of license for your restaurant business.
Cafe License
A Cafe license is suitable for small to medium-sized restaurant businesses and mainly serves drinks, coffee, tea, junk food, and bakery items like patties, bread, rolls, and sandwiches. If you are planning to sell wide range of food items then it is not the right choice.
Fine Dining License
Fine dining license is specific for restaurants that offer high-quality dining experiences to customers by providing a wide range of dishes cooked by chefs. Restaurant holding this type of license also offers elegant atmosphere and exceptional services for memorable dining experience.
Fast Food License
Restaurants that offer a limited menu with items like pizza, burgers, spin rolls, nuggets, fries, and pasta. The price of the food items is lower compared to fine dining meals.
Specialty Restaurant License
Specialty restaurant license is required for restaurant that focus on one specific food instead of wide range of food items. The cost of this license depends on the type of cuisine selected.
How to Obtain a Restaurant License in Dubai?
Starting a restaurant business has a lot of benefits, but it is a lengthy and time-consuming process as it requires approval from various departments. Following these steps can be helpful.
Choose the Type of License
It is crucial decision as different types of licenses are available in Dubai based on the type of restaurant you are going to open. It can be a cafe, fast food, or fine dining license as mentioned above.
Register Business with the DED
The next step is to register your business with the Department of Economic Development (DED) to obtain a trading license. Having a license ensures that businesses operate according to UAE law and regulations. Applicant should provide the following documents to DED after selecting a trading name with the help of a Business Consultant.
- Visa
- Passport
- Business plan
- Financial record
- Photographs
Approval from the FCD
It is mandatory to get approval from the Dubai Municipality Food Control Department (FCD) as well to ensure that the food business is operating under the food safety and hygiene rules. For approval, you have to submit your plan and ways to ensure the safety of food. If the plan is according to FCD and meets all the standards then a health card is provided.
Moreover, FCD conducts inspection tests to evaluate food handling, storage, preparation, and cleanliness. To get through this process, you can ask for help from your business setup consultant. In case you fail the inspection test, it is recommended that you reapply for the FCD approval.
Requirements to Open Restaurant
There are some legal and physical requirements that should be fulfilled to open a restaurant in Dubai.
Legal Requirements
The following steps must be followed before applying for a trading license.
Make A Business Plan
You need to make a business plan that describes your vision, goals, budget, and activities. What is your strategy to run business smoothly and what is your plan B if unexpected problems arise.
If you want to serve pork and alcohol, you must apply for separate licenses for each item to relevant authority. This process is handled and managed by Department of Economic Development (DED).
Select The Region
Investors are allowed to choose any region in Dubai, including Free Zones and the mainland. Each region has different requirements and benefits, so choose wisely.
Freezones are cheaper and offer more benefits to investors, such as Government support, incentives, complete ownership, tax exemption, and a simple profit take-out process.
On the other hand, the mainland provides an opportunity to trade with a local market in the UAE, interact with the local market, and operate in any industry of your interest. The only limitation of the mainland is that you have to hire a local service agent who holds 51% of your business. Also, the rules and requirements are stringent, unlike free zones.
Select Restaurant Location
After finalizing the business plan and region, the next step is to select a suitable location for your restaurant. It is a tough decision to make as multiple factors are involved that should be considered. Location decides the number of customers, cuisine in demand, and profitability.
Physical Requirements
After fulfilling legal requirements, you need to provide a detailed map and blueprint of your restaurant. The blueprint must include information about
- Interior Design
- Appropriate location for food storage
- Ventilation points
- Safety measures for fire hazard
- Emergency exits
How To Start a Restaurant Business in Dubai?
After learning about licenses and requirements, you might be wondering how to start a restaurant. Here are step-by-step guidelines to help you set up a restaurant business in Dubai.
- Choose a name for the company
- Select business activities
- Complete the application process and submit it to DED
- Rent out a space for a restaurant and get a tenancy contract
- For approval of tenancy, submit it to the Dubai Land Department.
- Get approval from the Department of Tourism and Commerce Marketing
- Submit required documents to DED for initial approval and then to FCD
- After approval, pay the license fee
Benefits of Restaurant Business in Dubai
The food business plays a key role in the growth of the economy in various ways and offers several benefits to investors. These include
- Diverse Food Culture
Dubai’s food market is competitive, and it is quite challenging to stand out. However, with this diversity, entrepreneurs can come up with unique ideas of cuisine to attract more visitors and compete others. In Dubai, you can get any kind of food from any country that suits your taste, such as Italian, Chinese, Mexican, Continental, and more.
- Growing Economy
Dubai’s rapidly growing economy makes it an ideal place to start a business. Its strategic location, which connects East and West, low taxes, appropriate environment, and government policies also help a restaurant business grow rapidly and attain high profit margins. Another good thing is that Dubai’s customers are wealthy, which benefits entrepreneurs.
- Supportive Government Policies
The cherry on top is that the government has policies that support the restaurant business. The government supports small and medium-sized enterprises by offering opportunities, incentives, tax relaxation, and reduced rates.
Cost Of Opening a Restaurant in Dubai
Restaurant license cost in Dubai varies and depends on multiple factors, and offers various kinds of licenses related to the restaurant business. Generally, restaurant license cost in dubai is 15000 AED to 25000 AED. The actual price may be different than the one mentioned above. Factors that decide the cost of food license are
- Location
- Number of employees
- Size of the restaurant
- Certification
Conclusion
At the end of this article, we hope it has provided you with enough information about the process of starting a restaurant, the restaurant license cost in Dubai, and the benefits it offers. A restaurant license is mandatory to run a restaurant legally, regardless of your chosen food.
After receiving your license, you can easily grow your business, as Dubai is a tourist destination, and the government provides support through different services. Get your license, and ensure that the food you offer is of good quality and hygienic to maximize profitability and stand out in the restaurant market of Dubai.
Every entrepreneur dreams of starting a business, but it requires a deep understanding of the entire process and legal structure. If you are an entrepreneur, you might find it confusing, as each step is critically important in business. Don’t get confused; reach out to Al Riyady for any kind of assistance setting up a business in Dubai.
