If you’re looking for the perfect place to start a restaurant, choosing Dubai could be a winning move. Each year, millions of affluent tourists from around the world flock here and happily take advantage of Dubai’s HoReCa (hospitality) industry. Residents, representing almost 200 nationalities, also enjoy indulging in gourmet cuisine and relaxing in a luxurious setting. With a rapidly growing economy, many people here have incomes that allow them to dine out frequently and enjoy Dubai’s restaurant scene.
Additionally, Dubai has several free zones where opening a restaurant business can be easier and faster than in other regions. At Dynasty Business Adviser, our experts are ready to help you navigate this process. First, let us walk you through some important details to help you assess your opportunities and prepare any questions for a consultation.
Why is Dubai a great place for the restaurant business?
Restaurateurs worldwide are attracted to Dubai for the following business advantages:
- Strategic location and growing tourism. Dubai is located within a 4–6-hour flight from 30–40 countries across the Middle East, Eastern Europe, North and East Africa, and South Asia. This strategic position, combined with resort facilities, attracts millions of tourists each year, creating a steady demand for a diverse array of dining options.
- Multinational population. With a large expat community from various countries, Dubai has a high demand for restaurants serving international cuisines. Residents and tourists alike seek familiar dishes but are also eager to explore new culinary experiences.
- High income levels. The city is home to a substantial number of affluent individuals, fueling the success of a wide range of establishments, including premium restaurants.
- Business-friendly environment. The UAE offers low tax rates and government support for small and medium enterprises, with incentives and opportunities for foreign entrepreneurs to open businesses.
- Events and festivals. Major international exhibitions and festivals regularly take place in Dubai, bringing additional patrons to restaurants, especially during holiday seasons.
- Real estate development. With new shopping malls, business centers, and residential complexes emerging each year, the demand for nearby dining options is constantly growing.
- Safe environment. Dubai is renowned for its high safety standards, making it attractive for both residents and tourists. The stable social and political climate offers a secure business environment. Restaurants in Dubai can operate without the risk of vandalism or other disruptions, enhancing investor and customer confidence.
Key aspects of running a restaurant business in the UAE
Despite its appeal, the restaurant industry in Dubai has its challenges. These are market saturation, certain restrictions on the sale of specific products and beverages, and staffing issues.
Market competition and saturation
The more prestigious the area, the greater the presence of competitors. Restaurants are virtually everywhere in Dubai, with over 26,000 dining establishments citywide. According to Sultan Al Taher, who heads the Food Safety Department, Dubai saw the opening of 1,500 new restaurants and cafes in early 2024 alone.
This high concentration of diverse establishments, from fast food to fine dining, can challenge new market entrants. To stand out, newcomers must carefully craft a unique concept. The fierce competition drives efforts to attract customers and improve service quality. This can increase costs related to marketing and hiring skilled staff.
Cultural considerations
The UAE is a Muslim country with specific traditions and laws that impact business operations. For instance, alcohol sales are strictly regulated. All restaurants must obtain a special license to serve it. Additionally, there are restrictions on operating hours, and businesses face unique conditions during Ramadan, when visitor numbers may decrease during the day. For a restaurant to succeed, it’s essential to understand and respectfully adhere to local culture and traditions.
Staffing
Hiring and retaining staff is another crucial aspect of opening a restaurant in Dubai. If your restaurant team consists of expats, you’ll need to handle visa matters. It’s also essential to strictly comply with labor laws and provide suitable working conditions, particularly for local employees, to avoid legal issues. Poor working conditions often lead to high staff turnover, which, in turn, increases costs for training, visa processing, and recruiting new hires. Retaining qualified personnel, such as chefs, sommeliers, hosts, and other service specialists, is generally more cost-effective and beneficial.
Steps to start a restaurant business
Next, we offer a guide to opening a cafe in the UAE, with a step-by-step process and practical recommendations.
Choosing a jurisdiction: Mainland or Free Zone
First, it’s essential to decide where to establish your restaurant, as the UAE offers two types of zones, each governed by different authorities: mainland and free zones. The conditions for setting up a business and opportunities for growth vary between them.
Mainland zones offer the following advantages:
| Advantage | Description |
|---|---|
| Unlimited access to the local market | Ability to conduct business with customers and suppliers across the entire country, including individuals and companies. |
| Option to open in any area | Restaurants can be located in the city’s most popular and high-traffic areas, including malls and street locations. |
| Contracts with government entities | Mainland companies can work with government organizations and participate in tenders. |
| Flexibility in business expansion | Fewer restrictions on opening additional branches and the ability to expand beyond the UAE. |
| Alcohol licensing | Obtaining a liquor license is often simpler here than in free zones. |
Now, let’s discuss the benefits of opening a restaurant in a Free Zone:
| Advantage | Description |
|---|---|
| Tax incentives | Some Free Zones offer exemptions from corporate and income taxes for extended periods. |
| Faster company registration | The setup process is usually easier and quicker than in mainland areas. |
| Fewer administrative barriers | Free Zones impose fewer requirements for local staffing and rented premises. |
| Lower initial capital requirements | Generally, there are no strict minimum capital requirements, reducing initial costs. |
There are also downsides to consider for each zone:
- The process for obtaining permits and licenses is more complex and time-consuming in the Mainland zone due to the extensive inspections required.
- Companies located in Free Zones have limited direct trade opportunities on the mainland without a local distributor or partner. Additionally, there are restrictions on the number of employee visas available.
Choosing the right zone for business registration can be challenging without a thorough understanding of local conditions. We recommend seeking financial and legal advice. For example, if you’re interested in setting up in a Free Zone, we can help guide you through the specific requirements of various Free Zones. If you prefer the mainland, we’ll advise you on what’s needed to open a restaurant in Dubai or other emirates.
Getting licenses
No business in the UAE can operate without licenses. This applies even more to the restaurant industry. Operating without proper licensing is illegal. Every establishment must meet strict hygiene standards and adhere to local consumption traditions. Depending on the type of operations, investors will need to obtain the following licenses:
- Shisha permit. Also known as a “shisha” license, this is essential for shisha-serving restaurants, which are very popular in Dubai. To obtain this permit, a separate, ventilated room must be set up specifically for shisha.
- Alcohol permit. It’s important to consider the cultural attitudes towards alcohol among Muslims. Although tourists and residents are now allowed to consume alcohol, this is restricted to licensed establishments like restaurants, bars, and cafes and only for those aged 21 or older. This license is issued by the Department of Tourism and the Dubai Police Headquarters.
- Pork permit. Pork products are prohibited for Muslim consumption but are permitted for tourists. To get this permit, a separate area must be set up, with designated dishes, knives, cutting boards, and grills. Separate refrigerators and freezers are also required for storage.
- Food product permit. Choose the type of establishment (e.g., café, cafeteria, or restaurant), determine the food categories, and apply for the relevant food product license through the Department of Economic Development (DED).
If additional services are planned, such as food delivery, the corresponding permits will also be required.
Opening a bank account
To operate a business, a corporate bank account must be opened with a local bank. This typically requires company documents, founding agreements, licenses, and identification for the owners. It’s important to note that the process can take considerable time, as banks carefully review documentation and business plans, especially for mainland businesses. We assist our clients in opening personal or corporate bank accounts for business operations.
Company registration
To set up a company, choose the legal structure (for instance, an LLC – Limited Liability Company for the mainland or a Free Zone Company for Free Zones). The registration process includes submitting an application, approving the company’s articles of association, and obtaining all necessary documentation to legalize the business. If you need help with company registration, you’re welcome to consult us.
Required documents for opening a restaurant?
The required documents will vary depending on the registration location. More specific information can be provided during a consultation. Generally, the following may be needed:
- Founding documents. A copy of the company’s articles of incorporation.
- Business plan. This includes a floor plan for the premises, showing the kitchen, dining area, storage rooms, etc.
- Owner and investor identification. Copies of ID, visas for owners and investors, and work visas for employees.
- Trade license and other required permits. Licenses specific to the nature of the business.
- Proof of a corporate bank account. Confirmation from a local bank.
How much does it cost to open a restaurant in Dubai?
Opening a restaurant in Dubai typically costs between $50,000 and $125,000. These are the initial costs for document processing, licensing, and office rental. Estimated expenses include:
| Expense item | Cost |
|---|---|
| Company registration | Around $6,500 (includes name registration, licensing, and immigration registration). |
| Articles of incorporation and government fees | $850 |
| Bank account opening | от From $1,000, with a possible deposit requirement. |
| Employee work visas and documentation | Around $1,500 per employee (includes visa, medical tests, insurance, and government fees for labor quotas). |
| Office rental, space planning, and sanitary inspections | Depends on the location, size, and prestige of the area; can reach up to $100,000. |
Additional costs such as rent, equipment, food supplies, marketing, and staff salaries should also be considered to determine the total investment required to open a restaurant in Dubai.
How to simplify restaurant business registration?
For foreigners, quickly getting all necessary permits in the Emirates can be challenging, with potential errors at each step, from filling out forms to effective communication. Language proficiency and knowledge of local traditions are essential, as navigating the process without them can be cumbersome. A minor mistake can lead to weeks of waiting due to corrections or reapplications. However, consulting a reliable company can significantly ease the process of restaurant registration.
We offer full licensing services for $4,000–$8,000 (plus government fees), saving you time and money. With our expertise, we know the best timing for document submissions to expedite the process. We handle document drafting, verification, notarization, and translation to minimize errors and ensure accountability for results.
Additionally, we provide post-registration support for your business, assisting with tax reporting, labor law compliance, and legal matters so you can avoid diving into complex regulations.
We work with establishments of all sizes, from small cafes to restaurant chains. Contact us for high-quality, affordable professional services.
