Like many other large and small businesses, the food and beverage industry is also thriving in the world’s business hub, UAE. According to a report by Euromonitor International, there are more than 6,000 food and beverage outlets in UAE and the number is expected to increase further by 19,000 additional food places at the end of 2019. The reason is not only the progress of tourism industry in the country but it is also due to the high spending on food items by the local Emirati population and the opportunities provided by UAE govt. Following are few reasons that make setting up a restaurant in UAE a highly profitable business.
High Spending by local Emirati Citizens:
Every month, Emirati residents spend more than AED 841 per person on food and beverages which is highest in the Middle East. Around 80% Emirati citizens like to dine in restaurants. Recently, entrepreneurs are shifting their focus from restaurants in big halls to small restaurants in neighborhoods as it is not only economical but also according to the changing habits of the local population who now prefer restaurants in their locality instead of visiting big halls away from their residential area. Even those you visit malls, 87% also visit a restaurant in a mall to consume food. The high spending of local population on food sector emphasis that there are more chances of the progress of restaurant business as compared to hotel business because visitors are more likely to stay in hotels where they may use restaurants inside hotel while local population will mostly enjoy their food in separate restaurants.
Large number of expats and foreign visitors:
But the prospects of restaurant business growth don’t rely completely on the local Emirati population. Every year, millions of foreign tourists visit UAE due to world’s best tourism opportunities along with security and political stability in the gulf country. No doubt, most of the foreign visitors live in hotels but many among these like to stay in economical hotels that don’t offer dining facilities or only provide basic food items. These foreign visitors would also like to enjoy their stay in UAE by eating delicious, economical and innovative food items in restaurants. It means that these restaurants can also attract foreign citizens if they provide luxury, delicious and unique food items. Restaurant owners can attract more and more local and foreign visitors by presenting various types of food items consumed in various countries and cultures in the world.
Apart from local and foreign population, lots of expats also reside in UAE. These expats belong to countries from Middle East, Asia, Africa and Europe. All these people have their own favorite food items and the restaurants fulfilling the requirement of these expats can also increase opportunity in the growth of their business.
Incentives provide by UAE:
In UAE, foreign investors are welcomed to set up a restaurant in in the free zone as well as in on shore. Free zones provide complete liberty from tax and duty along with the provision of 100% ownership but your restaurant must be located inside the specific free zones and you have to abide by the rules of your desired free zone. On the other hand, the foreign investor can only have 49% share in the restaurant on the on shore but this business will also be free of taxes and provides several such liberties of business that are not available in the free zones.
You can obtain your food license through the Food & Safety Department while there are other departments (economic development and tourism) from where you can apply for your Trade License. The UAE govt. also provides additional permits for special food items like Ramadan permit, delivery permit, pork permit, liquor permit etc.
Importance of Location:
You may ruin your business even in a business friendly place like UAE if you select the wrong location for your business. Therefore, knowing and then selecting right place for setting up your restaurant is quite important for investors. The best places to set up a restaurant are the tourist spots. There are number of such locations in UAE like Arabian Ranches, Jumeriah Beach Walk and others. Space is still available in the already existed places and you can construct your restaurant in one of these spots. But if you can wait for some time then you can also book place for your restaurant in the under construction tourist locations like Blue Waters Island in Dubai or Saadiyat Island in Abu Dhabi. It is not only economical but you can also select location of your choice in these areas.
You should also know the priority of residents where you are setting you restaurant. E.g. your restaurant should supply vegetarian dishes in case most of the people in the vicinity of your restaurant are Indians as many among those are vegetarians. In case of most Chinese residents, you should provide Chinese dishes in your menu while meat dishes are preferred by local population and westerners.