Renting a Restaurant in Dubai: A Comprehensive Guide

Dubai has emerged as one of the biggest trade centres, economic centres, and tourist centres in just a few decades. Increasing expat rate increasing tourism industries, and people’s interest in all types of cuisine all over the world has made the city a chef’s paradise for restaurant business start-ups. Renting a restaurant in Dubai is one of the finest methods for entry into this market. In this Dxboffplan article, we are going to inform you about all the processes, cost, and licenses for opening a rental restaurant in Dubai.

Dubai: A Golden Destination for Setting Up a Successful Restaurant Business

One of the world’s fastest-growing cities for lifestyle, business, and tourism is Dubai. Its unique cultural diversity has also resulted in staggering demand for world cuisine. A welcoming climate for restaurant start-ups has been made secure by UAE authorities. The government has ensured favorable infrastructures, liberal investors’ law, and specific facilities for foreigners. UAE Free zones, modern transportation systems, high purchasing power, and economic security are some decisive reasons why Dubai is viable for investment in the soft drink and food industry. For numerous people planning new start-ups for businesses in Dubai, restaurant start-ups are regarded as a highly lucrative and diversified concept. Penetration into Dubai’s growing yet competitive market needs serious setting up for brand presence and ensuring stable revenue.

Leasing or Restaurant Ownership in Dubai: Benefits for Leasing

It is rather a big decisions to start a restaurant in Dubai, as you need to purchase or lease commercial property. In the majority of cases, leasing a restaurant in Dubai is cheaper as well as a sensible option compared to purchasing. These are the reasons why one should lease a place:

• Less upfront cost: Commercial property purchasing is a transaction with a huge amount paid upfront, which is unrealistic or very challenging for start-ups or entrepreneurs in the UAE. Lease payments consist of down payment and some cheques once a year, relieving pressure on funds significantly.
• Relocation simplicity: The Dubai market is never predictable. You may sometimes require relocation for reasons of competition or adjustment of strategy. You are able to relocate easily by assuming leases which are not necessarily tied up for long durations and pay low relocation cost.
• Premier location accessibility: Most of the high-footfall center or mall-based commercial real estate available in Dubai is for rent — never for straight sales. Rent gains you entry to such desirable locations to begin operations from such sites and places your brand where buyers are.
• Rapid start-up for business: Business purchasing entails intricate negotiation, documentation by the authorities, as well as slow legal proceedings. On the contrary, renting entails a short and minimal lease agreement making it easy to start up swiftly.
• Simpler cost management: Lease contracts are normally straight-forward monthly and annual expenses so it is even more predictable for the company finances. There are even some leases where maintenance service charges are included so you are spared other charges you may have.
• Less risk for new entrants: Lease options are low-risk entry into the market for new businesses in Dubai entering for the first time with low upfront payments. If business is finding success or needs to take a different route, cost risk is greatly diminished.

Leasing a restaurant in Dubai — considering the economic prospects, property market, and cost of operation — is a wise decision for restaurant establishment expansion or new start-up.

What Licenses are Required to Start a Restaurant in Dubai?

It is not allowed to conduct restaurant & food businesses in Dubai on unstated licenses. A streamlined yet systematised licensing system is offered by the state for public safety for investors as well as for health. Of course, you are required to take such permits — but it demonstrates you are serious about having international standards. Let’s remember that taking an official restaurant licence facilitates taking Dubai work visas for workers as well as owners because it demonstrates you are conducting an honest & transparent business.

Licenses Issued by Dubai Municipality and DED

First legal requirement for all commercial businesses in Dubai — restaurant included — is obtaining a trade license from DED and health permit from the Dubai Municipality. These two departments assess you for commercial operation simultaneously. Main license procedure:

• registration on DED portal for commercial or trade name registration
• Describing the nature of commercial operations (e.g., fast-food operation, restaurant operation, standard restaurant operation, etc.)
• Introduction to floor layout design for the kitchen

Receipt of Approvals from Municipality and Food Safety Department

Standards for construction, ventilation, washing stations, garbage removal, and cleanness are all very specific for the Dubai Municipality. A scheme laid down according to these rules facilitates obtaining the permit easily.

Step-by-step guide on Acquiring a Food Activity License

The mandatory submission of paperwork will expedite the time it takes for your admission. Here are the steps on getting a Food Activity license:

1. Online Application on DED Portal: Begin by setting up an account and adding your company on the original platform. You are now specifying the company structure (sole owner/partnership) as well as the type of operation.
2. Obtain Place Authorization: Once you lease a facility, you would also need to present the facility lease agreement together with DED for approval. The facility should match the business activity.
3. Offer Interior Design Plan for Authorization by Municipality: You are also required to provide architectural design plans for the dishwashing section, ventilation, storage, dining area, kitchen, and toilet facilities. They are all to meet food safety and hygiene requirements.
4. Health And Food Safety Inspection: City inspectors come to you on the property and inspect air movement, lighting, cleanness, materials, and waste disposal systems.
5. Obtain Last Food Activity Permit: After all the above processes are confirmed, you are issued a legitimate restaurant permit. It is effective for some time and is asked to renew once annually.

The Setup Costs for a Restaurant in Dubai

Now that you are familiar with the process, here are the estimated cost of Setting up a Restaurant in Dubai:

Determine the Zone’s TIN

If you are interested in opening your restaurant in one of the free zones in Dubai such as DIFC, JAFZA, or DSO, then you also need to follow the following procedures in addition to all the above:

• Obtain approval from the competent authority concerned for the respective free zone
• Ensure such restaurant enterprise is compliant with zone’s Policy on Foreign Ownership
• Adhere to the region’s respective commercial needs in addition to environmental needs

Opening a Restaurant in free zones is also usually awarded further benefits like exemption from taxation, 100% ownership for foreigners for the company and ease for equipment import.

Best locations for Renting a Restaurants in Dubai

Deciding on the correct location for a rental restaurant in Dubai more or less determines one’s business success or failure. There is something distinctive about each location. It usually ranges from people’s cultural heritage and income group. It also depends on the footfall points, tourist points, and lifestyle factors.

Indeed, favorable location is one of the defining considerations for starting a business in Dubai, particularly for the restaurant and culinary industry. Here are the best choices:

Renting a Restaurant in Deira

Deira is one of the oldest areas in Dubai city and one of the busiest areas. It is also considered even today the heart of trade base and general public life in the city. It is visited mostly by forgein workers and cost-conscious tourists, and budget or traditional restaurants are popular here. Rental attractions of Deira:

• Lower rents than in up-market areas
• Closest location to public facilities
• High traffic volumes and pedestrian volumes
• Versatile for delivery-service or traditional concept ideas
• Parking near historic markets such as the Gold Souk and Spice Souk;

For low cost high margin markets where traffic driven sites are being eyed by businesses, Deira is a shrewd high-reward choice.

Renting a Restaurant in Jumeirah

Jumeirah is among the beachfront high-end districts in Dubai where you get high-income earners like locals, career expats, and high-budget tourists. The majority of the restaurants are theme-based, fine dining, and spectacular. Pros for renting in Jumeirah:

• Perfect Location by the beaches and tourist attractions
• Modern and smooth urban sites
• Eembraces world-class high-end clients
• Suitable for fine brand restaurant or Italian/French restaurant or seafood restaurant
• Good lighting & display options for catching customers’ attention

The rents for Jumeirah venues are considerably higher than many other locations, but if executed on the correct lines, payback time for this location is quite short.

Free Zone Leasing

Free zones like DIFC, JLT, and Dubai Silicon Oasis are kept aside for multi-national enterprises as well as overseas investors. They are controlled by independent legal regimes and are accorded distinct value-added tax treatments as well as distinct ownership structures. Other privileges for lessees in the free zones:

• High presence of multi-national companies and well-educated staff members
• Ideal for new concept/idea restaurant or international brand restaurant
• Upgraded facilities and broader commercial accessibility

If you are serving professionals, members of the senior-level staff personnel, or are using brand premium positioning, you need to go for the free zones for achieving a stable base in the Dubai marketplace.

What is the Average Monthly Rental Rate for a Restaurant in Dubai?

Rent charges for restaurant outlets in Dubai are among factors considered when one starts a sustainable restaurant company. The rent is controlled by a series of factors ranging from location to building grade, floor area, available amenities, even contract payment mode. Statistics for properties for real estates and new sites for investment reveal that annual average rent per square meter is AED 700 to AED 2000. These all add up to the final amount: proximity to malls, traffic intensities, pre-fitted facilities for the kitchen, ease to parking lots, as well as public transports.

Although starting a restaurant in Dubai is significantly more expensive than in numerous other nations, it does not deter investors — it is indicative of vigorous buying power for the marketplace as well as potential income for the restaurant trade. Shrewd location choices, precise cost estimates, and broad insights on consumer purchasing habits are able to work towards success in this extremely competitive marketplace.

Dubai Rental Rate for Restaurants Per District

Rental is estimated once a year per square metre. There are various zones with various differences depending on geographical characteristics, clientele profile, and commercial intensity. The following table displays estimated rents per square metre by districts:

There is various pay terms through post-dated cheques more than once during a year. They are also quite useful during the early days of business for cash management.

Restaurant Lease Agreements for Expats in Dubai

Leasing a restaurant in Dubai for expats is less interesting but more efficient and transparent than it is in numerous other regional countries. Nevertheless, it is still controlled by certain rules. Non-Emiratis are able to lease a commercial property for restauranting on an individual basis as one lawful entity or by joint partnership with an Emirati or by one UAE company.

If the property happens to be in one of the free zones in Dubai, it is now feasible for the foreign investor to register a company and realize 100% ownership sans local sponsor requirement and thereby start operations rightfully. To realize this, one is meant to present documentation such as the company registration certificate, DED or the relevant free zone authority trade license, health and safety permits, together with a written lease agreement with the property owner.

A few of the major perks for overseas lessees include exemption from taxation, liberty in transferability of profit to homecountry, as well as liberalized recruitment procedure for overseas staff members. These perks along with economic security as well as infrastructural advancement of Dubai assist in making it one amongst the best cities in UAE for work as well as investment in the restaurant business. But it is highly advised to avoid pitfalls as our experts at Dxboffplan are ready to help you through this process.

Final Words

A new and diversified restaurant and food sector is growing very rapidly in Dubai and it offers a tempting opportunity for entrepreneurs as well as investors. Having a rental restaurant in Dubai instead of purchasing is one such positive option for getting into the market early with low costs. Making precise estimates regarding expenditures, getting the location right, fulfilling legal formalities as well as acquiring licenses are some of the key steps to be implemented precisely.

By finding you the most appropriate property and offering professional services by the expert team of Dxboffplan, you can start your restaurant career confidently sooner. You can start some small fast-food or offer a premium international brand to Dubai, which is all you need for the use residency as well. Dxboffplan offers you a professional team available 24/7 totally for free, contact us now and start confidently on the very first step.