How to set up a catering business in Dubai?
The optimistic outlook of a receding outbreak as the nation continues to open up provides golden opportunities for company formation in Dubai and in particular to set up a catering business in the city and the wider UAE. Given the right know-how and skills set there is a wide variety for entrepreneurs to opt from. Street food, take away and even local cuisines.
As an enormous and growing sector in Dubai, food delivery and catering services are only expected to grow larger. According to recent estimates, the size of the market is approximately USD 271m. With an annual growth rate of 13% total, revenues are projected to escalate to USD 445m by the year 2025.
This escalation is attributed to the increasing consumer segment as it has been estimated by KPMG that 60% of UAE residents use apps to order food, compared to 18% in the US. The UAE and Dubai in particular is considered home to many prosperous and busy professionals who largely depend on food delivery services.
The following sections detail the steps and requirements for setting up a catering and food delivery business in Dubai.
Set up a catering business requirements
Generally, company formation in Dubai needs to follow several guidelines that will ensure an easeful and swift incorporation process.
Step one: clearly define the business activity. There are several subsectors and target customers in the catering business. Business owners are therefore advised to select what type of business to run before commencing with the setup process.
Afterwards, applicants need to choose the company’s name. Investors need to adhere to certain conventions such as avoiding blasphemous or offensive language or references to known organizations or companies. Personal names need to be chosen in full rather than abbreviated. Additionally, names need to be available for registration and not taken by other companies.
Investors can choose between mainland or freezone when locating their company. Mainland application requires the approval of the Department of Economic Development (DED) or the municipality of the emirate where the company is set up in. As for freezone, applicants will submit their requests to the respective freezone authority.
In addition to the application form, investors must provide their business plan and passport copies of involved shareholders.
Catering business license
The floorplan provided by applicants must contain the details of all entrances and exits in addition to windows and ventilation systems. Food processing and storage areas as well as all pieces of equipment used in processing and washing must be included in the plan as well.
Applicants must comply with the UAE’s ‘Food Code’ that defines the standards and regulations for all related facilities and pieces of equipment. Depending on the size and the nature of the business, catering license costs can range between AED 22,000 and AED25,000.
The next step is to apply for a UAE visa. The application procedure can differ depending on whether investors choose to set up on the mainland or in one of the freezones. However, in both cases, applicants must provide biometric confirmation information as well as undergo health fitness tests.
The final step to set up a catering business is opening a corporate bank account. Foreign business owners can complete this overseas, however, to avoid complications it is recommended to seek the support of business formation experts.
Food delivery app
Once the catering license is obtained, business owners can choose how to accept orders. Walk-ins, telephone or online are all feasible options but food delivery applications are the most popular in Dubai. The additional costs of building and designing the application depend on the app functionality level and added features.
The market niche for catering and food delivery services in Dubai is surely lucrative given that individuals are becoming more dependent on such services as a result of a fast pacing lifestyle. Small food delivery entrepreneurs can leverage their agility and compete against large players since they can partner with multiple restaurants without the need for owning one.
While the steps to set up a food delivery and catering service in Dubai are not too complicated, a certain amount of prior knowledge is required. Specifically, it is essential that the requirements for the business application, license and visa are complete and mistake-free.