Food is a very lucrative business industry in Middle East. The business prospects are very bright as Dubai is home to culinary delights from all over the world. One of the premier reasons why Dubai is still the number 1 holiday spot is that you can try cuisines of innumerable types and kinds.
Owing to such bright prospects, entrepreneurs and businessmen are eager to setup a restaurant business in Dubai. Estimates have it that as many as 1000+ new restaurants open up their doors in Dubai every year.
People are eager to try and experiment new cuisines and new recipes to tantalize their taste buds. One of the important aspects of travelling to a foreign country for a holiday is to indulge in local and international cuisines.
Business setup Dubai: Food sector
If you are interested in opening a café or restaurant in Dubai, you must know about the “Food Code”. The Dubai Food Control Department run by Dubai Municipality is a code of conduct that restaurants and food business owners must comply in order to ensure food safety and quality. The initiative binds the restaurants owners to conform to all the food safety and food quality standards in food industry.
The Dubai food code is similar to the food codes that apply in Canada, Australia, United States and Hong kong. This indicated the level of commitment that Dubai’s government has to improve the food quality and match it up with world food standards.
The food code applies to the following types of food businesses in Dubai
- Restaurants, cafeteria, hotels and cafes.
- Butcheries and Bakeries
- Food service operatives and canteens in schools and hospitals.
- Supermarkets, grocery stores, and all kinds of departmental stores.
- Food processing factories and warehouses
- Food catering services, delivery supplies to the cruise ship, desert camps, events and canteens
- Food packaging material manufacturers and supplies
- Kiosks, temporary and permanent food events, and mobile vending operations
You need to have the following two types of licenses to successfully open a restaurant in Dubai.
Trade License: This license in provided by the Dubai’s Department of Tourism and Commerce Marketing and is essential for setting up any kind of business in Dubai. You first need to select the type of appropriate food establishment that you want to operate in. The type you select in specified in the license so choose the type wisely.
Once done with trade license you must get your construction plans vetted and get it approved by the food control department of Dubai.
Food license: Food license is essential for any kind of food business that you are interested in opening. You need following documents to obtain cafeteria licence or any food business setup in Dubai.
- A Copy of the trade license or primary approval certificates from the authorities that issues trade license.
- The entry and exit passages
- Space for storing food
- Space for processing food
- Location of food equipment that will be used to process the food
- The windows and ventilation system
- Washing machines, dish washers and other supportive equipments
- Additionally, an approval from the planning department is required if the restaurant is located outside the shopping center.
VAT Registration in the UAE
VAT registration was made compulsory by the government of UAE on January 1, 2018, and a lot businesses not know about it and is still a relatively new concept for businesses there. VAT or value-added tax is paid by the end-consumer but businesses are responsible for collecting the tax on behalf of the authorities.
VAT registration in the UAE is compulsory on businesses that have annual sales of AED 375,000 or more. Businesses that have a sales turnover of AED 187,500 or more can opt to register for VAT on a voluntary basis in the UAE.
The inability to comply with VAT guidelines issued by the FTA can cost your business dearly. If you fail to register your business for VAT in the UAE, you will have to pay a legal penalty of AED 20,000.