The restaurant industry is currently booming in the UAE and has seen rapid growth over the last five years. The UAE is undeniably one of the fastest growing economies in the Middle East, and according to Euromonitor International, an additional 19,000 dining outlets are expected to open in Dubai alone within 2019. With Gulfood currently underway (17th to 21st February), it is evident that the food and beverage industry is moving on an upward trend and will continue to grow rapidly.
Underpinned by the worldwide ‘foodie’ movement, it’s easy to see why Dubai and Abu Dhabi are exciting new places for hopeful restauranteurs:
- A thriving and diverse array of customers from every continent of the world: Asia, Europe, The Americas, Australasia and the Middle East
- Fast-growing tourism sector
- Strong government commitment to growing the economy and GDP
- Attractive incentives for starting a restaurant or cafeteria in the food & beverage industry
Before you officially launch a restaurant in Dubai and Abu Dhabi and claim your slice of the excitement, there are 3 all-important steps to take:
1. Secure Your Food & Trade License before starting a restaurant or cafeteria.
A necessary first-step for launching your new restaurant or cafeteria in Dubai and Abu Dhabi is securing your food and trade licenses. Your Food License can be obtained through the Food & Safety Department, while your Trade License must be acquired through the Department of Economic Development & Department of Tourism and Commerce Marketing. If you’d like to offer something extra in your business there is a number of special licenses you can apply for including: a delivery permit, liquor permit, pork permit, Ramadan permit and more.
As you’ve probably guessed by now, gaining a license is a critical part of the process. It’s important it is done properly and on time so that you can begin opening the doors to your restaurant or cafeteria as quickly as possible. Inadequate or improper filing/renewal of your Food and Trade license has the potential to leave your business vulnerable to legal fines and closure. Getting your business off the ground (and keeping it profitable) means obtaining the necessary licenses, then keeping the paperwork in proper standing with the correct authorities. Often the rules for opening a restaurant in Abu Dhabi and Dubai are quite different to those in Europe and America, so it is worth seeking expert advice from someone who has worked in the region for a while.
A business set up specialist with fully compliant administrative support and PRO Services such as PRO Partner Group, will be able to guide you through the licensing processing and assist with compliance check, as well as providing secure local partner services.
2. Select Your Best Location
Location is everything when starting a business in Dubai or Abu Dhabi. Even the best restaurant or cafeteria can suffer, due to a poor or uninformed choice of business location.
Dubai has created many different business zones, that specialize in different sectors e.g. Media City, Internet City, or Education City. There are also tourist zones, such as Jumeriah Beach Walk, or high-quality residential zones such as Arabian Ranches and the Palm. It is important to choose a location which will support your restaurant type and your customers’ budget. For instance, students tend to prefer lower cost cafeterias as they are not in full time work. Areas frequented by tourists staying in the 5* hotels, can accommodate more luxurious and exotic restaurants.
For example, say you’re looking for “The best place to start a vegetarian restaurant in Dubai”. When making this pivotal decision, you want to assure the location is not only where your target customers are, but also where your competitors haven’t already saturated the area. Facing this endeavour, it’s incredibly helpful to have assistance from local contacts who can not only share good locations for your restaurant or cafeteria business, but also share which areas in Dubai and Abu Dhabi are under development or ‘up and coming’ and would be worth looking in to.
One example is Saadiyat Island in Abu Dhabi, this is an area with big ambitions, set to be the ‘Cultural Heart’ of the UAE, so this is an interesting area to consider when setting up a restaurant. Blue Waters Island in Dubai is also currently under construction, and set to host the largest observation wheel in the world – the Ain Dubai. A restaurant zone is planned here, which targets tourists from all over the world. A great place to consider setting up a restaurant in Dubai.
3. Set Up Your Business Plan
Aa professional business plan should cover 4 areas:
- Set clear goals for your restaurant or cafeteria.
- Assure every dollar of your capital spend is used wisely to maximising your restaurant business profits.
- Have a contingency plan to deal with the inevitability of the unforeseen.
- Protect your business and brand as you advance in the market.
4. Decide where to establish your business: Free Zone or On-Shore
Whilst a Free Zone may seem like a lower cost option in which to establish a business, the strict regulations around trading mean that the restaurant must be physically located in that Free Zone, which of course is not likely to be a particularly prosperous option. The most effective way to set up a restaurant in the UAE therefore is as an on-shore Limited Liability Company (LLC).
As with many countries in the GCC region, commercial law in the UAE states that a foreign investor cannot own more than 49% of an LLC, and must partner with one or more Emirati (individual or company), who will therefore own a minimum of 51% of the shares.
One option to eliminate the need to search for the ideal local partner altogether is to establish an LLC with a professional corporate local partnership specialist, such as PRO Partner Group. They will ensure that agreements are in place that enable the foreign investor to fully control and manage the business, as well as retain the intellectual property and assets. PRO Partner Group also ensure that a penalty free exit/company sale strategy is in place for the foreign investor should it be required.
PRO Partner Group are proud of the award-winning service they offer clients in the formation and support of UAE companies.
James Swallow is Commercial Director of PRO Partner Group. For further information on how to set up a Restaurant in Abu Dhabi, Dubai or the wider UAE and register your trade name, brand and obtain trademarks and any other related government liaison matter in the UAE and wider Gulf, contact James or call a member of the team on:
+971 (0)4 456 1761 (Dubai)
+971 (0)2 448 4810 (Abu Dhabi)
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