How to start a food business in the UAE
The food and beverage industry is one that seems to have no downturns. The constant boom in sales regardless of circumstance makes this industry a lucrative opportunity for those planning to start a business. The UAE in particular is highly favorable towards this industry, with its market size soaring to AED 145 billion in 2021. In this article, we explain how you can start a business in this opportunity-rich industry.
1. Licensing requirements
The first step any aspiring entrepreneur must take in their journey to building their own business is acquiring a business license. For the food and beverage industry in particular, there are two main licenses that you will need to obtain; a trade license and a food license. A trade license is a must-have for any business, and the food industry is no exception to this rule.
A free zone trade license is valid in this line of business and hosts a broad range of benefits. SPC Free Zone provides 100% ownership rights to non-GCC nationals, along with a smoother process overall and other licensing perks like an extended license duration of up to 10 years. After acquiring your trade license, you will need to begin your application for a valid food license. A food license is one that states that your establishment is in compliance with the country’s laws regarding food and health standards and protocols. You will need to apply for this license through the Food and Safety Department.
2. Deciding the mode of business
The food and beverage industry has evolved over the years. There has been a drastic shift in the way consumers order and eat their food. Long gone are the days when a restaurant’s revenue came primarily from physical dine-in orders. Over 60% of consumers in the UAE now prefer ordering their food through apps like Zomato or Talabat. Many restaurants have now shifted towards an online only mode, effectively turning into cloud kitchens, where in-house dining has been completely replaced by a kitchen-only layout where they only provide takeout services. This mode of business has become increasingly popular, becoming the new norm in the food industry space. The cloud kitchen model provides entrepreneurs with significant cost reductions without affecting sales.
Moreover, in this mode of business, delivery services are provided by third-party apps like Careem or Zomato, increasing the venture’s reach to a larger market across the UAE. Other modes of business also include starting a food truck business, which is a mode that requires a mainland license.
3. Staffing and equipment requirements
Once you’ve decided the mode of business activities, the process of allocating individuals in positions of responsibility across your business will begin. In-dining restaurants require a higher number of staff to run operations smoothly. In case of cloud kitchens however, the staff requirement is significantly reduced due to the fact that not many individuals are required to run a kitchen-only business. Visas for staff under this type of business will be provided through the sponsorship of the entrepreneur. The main investment involved in this line of business is kitchen-related equipment and machinery. This includes appliances like refrigerators, ovens, utensils and more, depending on the cuisine your venture will specialize in. Machinery related to order synchronization and payment related systems is also a must-have in this industry.
Starting a food-related business in the UAE can seem daunting, with the licensing requirements and health standards amongst other decisions that may seem hard to make. Here at SPC Free Zone, our expert consultants break down the process involved in starting your own establishment, making your dream business setup in the UAE a reality. Contact us at 800 SPC FZ to start your venture today.