A Practical Guide to Setting Up a Restaurant in the UAE

The Food and Beverage (F&B) industry has always been an integral part of the UAE economy. In 2022, full-service restaurants are expected to generate $2.34 billion in revenue alone, up from $1.94 billion recorded in 2018. A high income, cosmopolitan environment, diversity, and government initiatives contribute to the impressive growth of F&B since the early 2000s and is hard to see it slowing down in the near future. Further, the UAE is home to over 200 different nationalities, with expats making up 80% of the total population resulting in a multi-ethnic and globally-minded environment.

 

Location

The first step in opening a restaurant in the UAE is to choose a strategic location. Ideally, the restaurant's location should correspond to the type of restaurant and customers’ budget and competition in that area. The location of the restaurant is essential to its success.

Mainland vs. Freezone 

As part of location selection, foreign investors should also consider whether the location is licenced by a mainland authority or a free-zone authority. The most common form of a mainland licence is a limited liability company (LLC), which will require a 51% local UAE shareholder. If the chosen location is within a UAE free zone then foreign investors can setup as an LLC with 100% ownership using a free zone licence.

Licencing Process

Pre-approvals

In order to apply for a restaurant licence, pre-approvals from from Abu Dhabi Food Control Authority or the Food Control Department of Dubai Municipality (if the set-up is in Dubai or Abu Dhabi) who will request that the premises have met the specific requirements to permit foreign investors to open the restaurant license. Additional pre-approvals will be required if the restaurant owner is looking to offer other services such as: a delivery permit, liquor permit, pork permit, Ramadan permit and more.

Food Code

The UAE has a food code that all restaurants must follow. The food code informs restaurant owners about the safety regulations devised by the Department of Food Control in order to ensure compliance with the requirements needed to open a restaurant and obtain a license.

Food and Trade Licences

Foreign investors will have to apply for two licences: (i) food licence from the Food & Safety Department and (ii) trade licence from the Economic Department.

The Food & Safety Department in UAE requires the following documents for a food licence:

  • NOC from the Economic Department.
  • The liquor license for opening a bar or beverage centre.
  • Permission from the Planning Department to open a restaurant in a shopping mall.
  • Essential Food Safety Criteria.
  • Premises layout detail.

Restaurant Construction Requirements

The next step is to ensure the premises or the layouts are also in compliance with the relevant regulations including:

  • Clean and pest free building.
  • Easy to clean place and one direction food flow.
  • Hygienic utensils.
  • Separate toilets and storage areas away from the kitchen.

Architectural Rules

Foreign investors will also have to comply with architectural rules to operate in the UAE. For example in below are some of the rules in Dubai:

  1. Kitchens need at least three hundred square feet or forty percent of the total restaurant area.
  2. Restaurants must have proper ventilation and an exhaust system.
  3. All the walls in the restaurant should be washable and fireproof.

Smoking Permits 

To obtain a permit for smoking areas, a business owner must complete and submit a permit application to the Public Health & Safety Department setting out the layout of the premises and the ventilation and air conditioning system, providing the capacity of each equipment for smoking and non-smoking areas, and identifying fresh air intake and exhaust systems.

Cost

The cost of opening a restaurant in the UAE varies depending on the type of restaurant, location and any additional services offered. Below are general estimates of restaurant cost in the UAE.

Full-Service Restaurants 

A full-service restaurant requires large spaces for cooking, storing, etc. Generally, the cost of a full-service restaurant is in the range of AED 250,000 to over AED 500,000.

Delivery Restaurant 

Currently growing at a rapid pace, these delivery restaurants are cost efficient and do not require much space. Generally, the cost of delivery restaurants can be in the range of AED 100,000 to AED 170,000.

Setting-up a successful restaurant business in the UAE, requires careful planning, proper licensing process and knowledge of the restaurant market. Accordingly, choosing a professional service provider like CBD is crucial to ensure proper set-up in a timely and cost effective manner.

For more information on incorporating a restaurant, contact us by sending an email to enquiries@cbddubai.com or call +971 4 551 0677