Author: Hanoof Al Naama
Published: April 5, 2024
Cloud kitchens, commonly known as ghost kitchens or virtual kitchens, are commercial kitchens focused only on preparing delivery-only meals. These establishments don't have dine-in options and operate through online delivery platforms like Zomato, Deliveroo, or Talabat.
Cloud kitchens offer several unique advantages for entrepreneurs:
In 2023, estimates suggested that the UAE cloud kitchen market was valued at $275.61 million. The market has a predicted compound annual growth rate of 25.17% between 2024 and 2030.
Two factors contribute most to why consumers are opting for cloud kitchen services:
For entrepreneurs looking to learn more about the practices of popular cloud kitchen operators in the UAE, the following are great places to start:
SPC Free Zone offers each of these licenses as instant licenses, along with a guaranteed bank account within three working days and unlimited visas for employees, investors, or partners.
This license is essential for any business wishing to operate in the food and beverage industry. Although a cloud kitchen may not have on-site dining, this license enables entrepreneurs to prepare, serve, and provide meals to customers for immediate consumption.
Whether a prepared meal is eaten at the restaurant's premises, purchased as take-out, or delivered—as is typically the case for cloud kitchens—this license is an entrepreneur's ticket to entering the bustling food trade.
Vendors who can use this license to operate include:
Note: The operation of concession stands is excluded from this license.
Although certain avenues listed above may not resonate with entrepreneurs that have a clear-cut vision for their cloud kitchen, UAE's thriving business landscape creates immense potential for expansion and chain eateries. A successful cloud kitchen opens the doors to multiple revenue streams, given that an entrepreneur has procured all the right licenses.
| Requirement | Details |
|---|---|
| Third-party Approval | Required from the Food Safety Department (Sharjah municipality) after obtaining your trade license (not required prior to obtaining your trade license) |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
A Kitchens Center, often referred to as a Cloud Kitchen, is essentially a commercial kitchen space that is rented out to food businesses. Unlike traditional restaurants with dining areas, these kitchens focus solely on food preparation for delivery or takeout.
A Kitchens Center falls under the category of "non-residential buildings" as it is a commercial space used for business operations. It involves the "buying, selling, renting and operating of self-owned or leased real estate". Essentially, the owner of the Kitchens Center is providing a commercial space for rent to other businesses.
Important Note: While the Kitchens Center itself is a property-based business, the individual food businesses operating within it are not part of this classification.
This business activity excludes:
| Requirement | Details |
|---|---|
| Third-party Approval | Required from the Food Safety Department (Sharjah Municipality), post acquiring the business license |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
High-quality, scrumptious meals may place you on the map as a cloud kitchen, but every business needs to hold strong and steady when it comes to management and operations. A cloud kitchen is no exception.
Day-to-day administrative services enable the kitchen to function with ease, keeping roadblocks to a minimum. For a self-kitchen, this means managing suppliers, internal staff, forming stringent schedules, and establishing productive processes for each member of the team.
On paper, this includes:
Investing in management and operations enables a cloud kitchen to understand how to better serve its customers, forge a strong relationship with consumers, and work towards building a consistent stream of revenue.
Note: If an entrepreneur is looking to hire one set of staff to manage all operations of the business—not just administrative tasks—then this license is not suited for them. They should look towards the specific industry they are involved in, such as food or hospitality.
In addition, entrepreneurs cannot contract a company that offers just one administrative service. For example, a cloud kitchen requires everything from handling financing to coordinating deliveries. If a company provides only one of these services, it does not fall under Combined office administrative services.
| Requirement | Details |
|---|---|
| Third-party Approval | No third-party approvals required |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
With the food industry in the UAE experiencing significant growth, these licenses unlock a multitude of opportunities for entrepreneurs.
SPC Free Zone offers:
For more information about setting up a cloud kitchen in the UAE through SPC Free Zone: