Dubai is one of the world’s top 10 tourist destinations. This success can be attributed to the Dubai government’s efforts. The government made it possible for Dubai to be filled with resorts, to have marvelous architecture, eye-catching sceneries, and heartwarming hospitality. These are only some of the reasons why people have been migrating to Dubai for work and for business.
The food and restaurant industry in Dubai and the Abu Dhabi have benefited a lot from this. Euromonitor International in its market research revealed that about 19,000 additional restaurant outlets will be opened in Dubai by 2019. Food lovers in Asia, Europe, Australia, and America have helped much in Dubai’s success in the restaurant industry.
When opening a restaurant in Dubai, you have to follow a certain code of conduct. You also need to acquire some information. These are the steps that have to be followed when opening a restaurant in Dubai:
Acquiring Food and Trading Licenses
This is the first step to the whole process. You can acquire the food license from the Department of Food and Safety while the trade license can be obtained from the Department of Economic Development (DED) and the Department of Tourism and Commerce Marketing (DTCM) for approximately AED10,000 to AED12,000.
Choosing the Right Location
The next step would be to choose the best location in Dubai whether it is in the mainland or the free zone areas. When you plan to open the restaurant in mainland Dubai, you will need the approval of the DED, and it requires for you to have a local Emirati sponsor. This will give you the choice to trade anywhere in Dubai, but 51 percent of the shares will go to the local sponsor and 49 percent will be the share of the owner.
In the free zone, the approval of the free zone authorities is required. This will allow you 100 percent ownership of the company without the need of a sponsor. However, you will have restrictions in your area of trading.
Another thing to choose is the locality. Choose a particular area in the country which has the highest number of targeted customers for your restaurant. For you to have the right insights for the famous local areas for your planned restaurant, you need the expertise of local business consultants.
Come Up with a Business Plan
To have a professional business plan, you need to accomplish several elements such as SWOT analysis, producing a financial plan, target marketing, coming up with a contingency plan for uncertainties in your industry, research, market survey, break-even analysis, cash flow projections, etc. Each of these is foreseen to help in growing your business.
Cost and Expenditure Estimates
You need to have a financial plan ready. This will help you keep track of the money you need to spend. How much this restaurant will cost, the staffing, and the equipment needed, and also the licenses. You also have to consider the following factors: the local sponsor which is AED10,000/year (approximately), labor and immigration registration up to AED8,000, rent of the restaurant’s premises at least AED60,000 (depending on location), and trade license fee for the DED at AED10,000 to AED12,000.
Architectural Requirements for a New Restaurant in the Area
It is necessary to have a storage facility for all the food items needed in the restaurant. It is a must for the restaurant to have proper ventilation and the chimney must be higher by two meters than the nearest building. There must be a separate basin each for washing the vegetables, meat, and utensils. The drainage pipe must also have a distance of at least 2 inches from the nearest wall. The walls, roof, and floor must be washable, fireproof, and non-absorbent. It is important for the kitchen to have an area of 300 to 380 square feet or about 40 percent of the kitchen’s total area.
Documents Required When Opening a Restaurant Business in Dubai
There are three major documents required by the authorities for entrepreneurs who like to open a business: the food and safety license, the trading license, non-objection certificate (NOC) from Dubai’s local municipality.
There are also optional permits such as the following: liquor permit, Ramadan permit, delivery permit, and pork permit.
These documents are required for both new and old restaurants operating in Dubai for them to run the businesses without any interference from the authorities.
It may be a daunting task to set up a new restaurant business in Dubai, but it can be done with the right professional help. Contact HBS Dubai to guide you in setting up your first restaurant in Dubai.