How to Start a Restaurant in Dubai?

Dubai is a beacon of culinary diversity and business opportunity, making it an ideal location for launching a restaurant. Renowned for its luxurious lifestyle and as a crossroads of numerous cultures, the city offers a dynamic dining scene that attracts food enthusiasts worldwide. Its strategic location, supportive business environment, and high tourist footfall provide unique advantages for restaurateurs looking to make a mark in the industry. In this article, we will look into how to start a restaurant in Dubai, detailing the essential steps and considerations to help you succeed in this vibrant market.

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How To Open A Restaurant In Dubai?

When planning to open a restaurant in Dubai, numerous factors must be considered in successfully launching and running a restaurant in this city. Here is a comprehensive list of considerations and steps to help you manage the complexity of starting a restaurant in Dubai:

Determining Your Restaurant's Concept and USP

When starting a restaurant in Dubai, it is crucial to establish a distinct and appealing concept that distinguishes you from competitors in the bustling and competitive dining industry. A well-defined concept can be the key to attracting customers and achieving long-term success. Here is how to refine your restaurant's concept and identify its Unique Selling Proposition (USP):

• Define the Service Style: Choose the type of service that best suits your vision, whether fast-casual, fine dining, buffet or a cafe.
• Curate the Menu: Focus on creating a menu that reflects your unique concept, whether it's ethnic cuisine, fusion dishes, locally sourced ingredients, or innovative culinary techniques.
• Design the Ambiance: Your restaurant's physical environment should resonate with your concept and enhance the overall customer experience.
• Identify and Develop Your USP: Identify what makes your restaurant unique. This could be a special dish, an unusual theme, or an innovative service approach that sets you apart.
• Innovation: Be open to experimenting with new ideas that attract customers, such as incorporating unique cultural elements or using advanced technology.

Finalising a Business Plan

Creating a comprehensive business plan is crucial in starting a restaurant in Dubai. Your business plan should clearly articulate your vision, goals, objectives, and budget. It should also detail your restaurant's concept, target market, and operational plans, including how you'll manage daily activities. Additionally, it's essential to outline contingency strategies for potential challenges. Dubai's Department of Economic Development (DED) oversees this planning process, which ensures that all businesses align with local regulations and standards.

Select the Region

When setting up your restaurant in Dubai, you have two main options for your location:

• Free Trade Zone: Setting up one of Dubai's free trade zones offers benefits like 100% foreign ownership, full repatriation of profits and capital, and exemptions from import and export duties. It's an attractive option for foreign investors but may have restrictions on trading directly with the local market.
• Mainland Area: Establishing your restaurant in the mainland area allows you to operate freely anywhere in the UAE, including direct sales within the local market. This option requires a local partner who holds at least 51% of the business, though recent reforms have relaxed these requirements for certain types of businesses. Under the latest regulations, the Mainland allows 100% foreign ownership in specific sectors. For other sectors not covered by these regulations, foreign investors must have a local partner who holds at least 51% of the business.  

Selecting the Restaurant Location

After finalising your business plan and choosing the region for your restaurant in Dubai, the next crucial step is selecting the physical location. This decision can significantly impact the success of your venture. Here are key factors to consider when choosing the location of your restaurant:

• Target Audience 
• Visibility and Accessibility
• Competition
• Size and Layout
• Costs
• Compliance
• Growth Potential

Obtaining a License to open a Restaurant in Dubai

After securing a prime location for your restaurant in Dubai, obtaining all the necessary permits to authorise you to operate is imperative. In Dubai, you primarily need to procure two types of licenses to open a restaurant:

• Trade License: This is essential for any business operating in Dubai. It legally permits you to conduct business activities in the region, as obtained from the Department of Economic Development (DED) in Dubai.
• Food License: Issued by the Dubai Municipality's Food Safety Department, this license is specific to food-related businesses. It ensures that your restaurant adheres to the local food safety and hygiene regulations.

Additionally, depending on your restaurant's specific features or services, you may require other licenses and permits:

• Liquor License: If you plan to serve alcohol at your restaurant, a liquor license is mandatory. This license is regulated by the Dubai Police and requires adherence to strict guidelines.
• Pork Permit: If your cuisine includes pork products, a separate permit is required to handle and serve pork, as it is subject to specific regulations in Dubai.
• Entertainment License: Restaurants that plan to host live music, dance performances, or other forms of entertainment must obtain an entertainment license from the Dubai Department of Tourism and Commerce Marketing (DTCM).
• Food Consignment Release License: This license is necessary for restaurants that import food products.
• Vehicle Permit for Transporting Food Products: Any restaurant that operates delivery vehicles must obtain a vehicle permit.

Securing these licenses is the first critical step towards launching your restaurant in Dubai, setting the foundation for Compliance and success in the city's competitive dining sector.

Procedure to Get a Restaurant License and Start a Restaurant Business in Dubai

Starting a restaurant in Dubai involves a series of steps regulated by various governmental departments to ensure Compliance with local business and food safety laws.

Required Documents for Dubai Trade License

Having all the necessary documentation is crucial to streamlining the process when applying for a trade license in Dubai.

• Initial Approval Letter from DED 
• Detailed Business Plan
• Premises Tenancy Contract
• Blueprints and Floor Plan of Restaurant
• Memorandum of Association with Local Sponsor: If setting up in the mainland area.

Step-by-Step Guide to Obtaining a Restaurant License

Here is a step-by-step guide to obtaining a restaurant license and starting your business:

• Select a Company Name: Choose a unique name for your restaurant that complies with the UAE's naming conventions. Get the name approved by the Department of Economic Development (DED) or relevant free zone authority.
• Choose Business Activities: Clearly define the nature of your restaurant's activities. This will determine the type of licenses and approvals needed.
• Obtain Initial Approval from DED: Submit your initial application and relevant documents to the Department of Economic Development (DED) for approval.
• Tenancy Contract: Sign a tenancy contract for your restaurant space. This will need to be registered with Ejari.
• Ejari Registration: Register your tenancy contract with Ejari through the Dubai Land Department. This step formalizes your rental agreement and ensures Compliance with Dubai's rental laws.
• Obtain DTCM Approval: Get approval from the Department of Tourism and Commerce Marketing (DTCM), which is necessary for restaurants that might impact tourism or commerce.
• Apply for the Trade License: After approvals, submit all required documents and paperwork to DED to finalize the business setup.
• Pay License Fees: Pay the necessary Dubai trade license fees once your application is approved.

Procedure to Apply for the Food License

After receiving initial approval from the Department of Economic Development (DED), you can then approach the Food Safety Department to obtain your food license.

The Food Safety Department is responsible for issuing the Food Safety License in Dubai. To apply for this license, you must first have your trade license from the DED. Here is a streamlined process:

• Receive Initial Approval from DED: Secure initial approval and the trade license from the DED. (Process mentioned above).
• Apply to the Food Safety Department: Submit your application along with the required documents to the Food Safety Department.
• Provide Necessary Documentation: Ensure you have:
• A copy of the trade license or the primary approval from the DED or relevant free zone authority.
• Interior design layout of the premises (blueprint), which includes:
•     Entry and exit passages
•     Space for processing food
•     Area for storing food
•     Windows and ventilation system
•     Location of food preparation equipment
•     Dishwashers and other supportive equipment

Meeting these requirements and obtaining your Food Safety License ensures that your restaurant complies with Dubai's strict food safety and hygiene standards, allowing you to operate legally and safely.

Once you have obtained the food and trade licenses, you will be authorized to start your restaurant in the city-state. However, depending on your specific business activities, you may need to acquire additional licenses (refer to above).

Cost of Opening a Restaurant in Dubai

The cost of opening a restaurant in Dubai can be significant and influenced by various essential factors. When calculating the Cost of Opening a Restaurant in Dubai, you must consider expenses such as:

• License: Secure all necessary food and business operation licenses.
• Rent or Property Purchase: Consider the costs associated with leasing or buying a venue.
• Permissions: Obtain additional permissions required for specific restaurant operations.
• Staff Training Program: Invest in training to ensure your team delivers excellent service.
• Software for Daily Operations: Implement software solutions for managing sales, reservations, and inventory.
• Insurance: Get the appropriate insurance to cover liabilities, property, and employees.
• Working Capital: Ensure you have funds to cover day-to-day expenses during the initial phase.
• Setup Costs: Budget for kitchen equipment, furniture, and decor to set up your restaurant.

These are the initial investments needed to establish a restaurant in Dubai. Read our article to learn more about the Cost of Opening a Restaurant in Dubai

Conclusion

Starting a restaurant in Dubai is a multifaceted process that requires careful planning and adherence to local regulations. By following these steps, you can navigate the complexities of setting up your restaurant and position yourself for success in Dubai's dynamic culinary scene. Whether you're bringing a unique dining concept to life or expanding an existing brand, Dubai offers a vibrant market with vast opportunities. Good luck with your restaurant venture!

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