How to start a food delivery business in the UAE
With advances in technology and restrictions created by the COVID-19 pandemic, demand for food delivery services is higher than ever. Globally the food delivery business is on track to reach $151 billion by the end of 2021. One of the hottest markets in the Middle East is the UAE. The UAE food delivery market is valued at approximately $834 million, making it one of the fastest-growing markets in the region.
With experts projecting that this industry will continue to grow 7 percent annually, for entrepreneurs looking to build a food delivery business, now is the best time to get started. In this article, we’re going to cover everything you need to know to begin building your food delivery business - including discussing the licensing requirements based on the UAE jurisdiction of choice, the overall documentational requirements, timelines and costs associated with this type of company set up.
Creating a Business Plan for Your Food Delivery Business
Writing a business plan is a great place to get started. A solid business plan will help you define all of the aspects of your business and how you intend to execute your plan. Your business plan should address how you will receive orders from your customers (telephone, online orders, mobile app, etc.), what types of consumers you plan to target (business, personal, etc.), and how you can scale the business as it grows.
Understanding the Legal Requirements in the UAE
It’s important to understand what guidelines are in place to regulate the food delivery industry. Earlier this year, Dubai’s Road and Transportation Authority (RTA) released a comprehensive manual intended to help set guidelines for the food delivery service industry. This manual covers four key areas — outlining safety for motorbike delivery companies, driver training requirements, field awareness campaigns, and regulating apps and programs for delivery services. Be sure to request a copy from the RTA for your review.
Select a Business Name and Register Your Company
Before you can apply for trade licences, you will need to select a name for your business and register it with the Department of Economic Development (DED). The UAE has strict rules around the naming conventions for businesses. Most of the restrictions are common sense. However, when selecting a business name, be sure to comply with the following rules:
- Do not use any offensive language or God’s name (or his divine attributes).
- Make sure that your business name represents your company’s primary function.
- Do not use any names that are already copyrighted (for example, DoorDash or Microsoft).
- Some location-based words are restricted such as UAE, Emirates, Dubai, and city names.
- Your name should not indicate or suggest any affiliation with a global religious or government group such as the Vatican, United Nations, or FBI.
- Business names that are too similar to another business name are prohibited.
Before applying for any licences, you need to decide in which jurisdiction you plan to operate your business — Mainland, Free Zone, or Offshore. Each of these jurisdictions come with their own set of laws and regulations.
For mainland businesses, you will need to apply for a trade licence with the Department of Economic Development (DED). Free Zones each have their own managing authority that will approve trade licence applications.
Food Safety Regulations
After you have secured your trade licence, you will need to apply for a catering licence from the Dubai Food Safety Department. All food handling businesses must also adhere to the UAE’s Food Code which dictates how food should be stored, transported, and handled.
Building Your Food Delivery Business
Once you have your company established and licences in place, you will need to get to work on building your business. Consider things like what mode of transport will be used to deliver your food products (car, motorbike, etc.), if your team will have uniforms, what branding or marketing materials are needed, and how payments will be received.
Creating a Food Delivery Mobile App
In today’s tech-savvy world, you will likely need to create a mobile app for customers to place delivery orders. A basic mobile app will likely cost between $10,000 and $30,000 to build. While this is a major cost, most customers will expect to have an easy way to place orders. Without a mobile app, you have a difficult time competing with other companies that offer a mobile app.
How can PRO Partner Group help?
PRO Partner Group (PPG) has in depth knowledge of government regulations and business standards in the UAE, and throughout the Middle East. We can advise you on all the requirements for setting up a food delivery company in the UAE and assist you with obtaining the food authority licence, trade licence as well as staff visas once the company is set up.
If you need assistance on this or any other related company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or KSA, then please do get in touch with us on +971 (0)4 456 1761 for Dubai, or +971 (0)2 448 5120 for Abu Dhabi, email us at email@example.com or complete the contact form below and we will be delighted to assist you.