Entrepreneurs and businessmen are always looking for ways to generate passive income streams. These streams generate wealth while the investors sleep or do any other non-business activity. Launching a vending machine business in Dubai, UAE is a fine way to move away from the time-for-money model.
This kind of business is one of the most popular ways of making money passively. There is no better place other than Dubai, the leading cosmopolitan city in the Middle East, to run this business. Out of many benefits, the best one is that there is no requirement of having a storage space, employees, or any office to operate this business.
In this piece of informative writing, you will learn the process, requirements, rules, regulations, and all the relevant details for starting a vending machine business in UAE. Let’s get going.
Table of Contents
How Much Profit Can You Earn Through a Vending Machine Business in the UAE?
We will begin by going back to basics.
What is a Vending Machine?
A vending machine is an automatically working machine. When a customer inserts cash or credit into a vending machine, the machine automatically gives the customer goods including snacks, lottery tickets, cigarettes, drinks, and more. The vending machine cost varies from model to model.
Profits from a single vending machine can range from $30 to $60 USD per week. However, in busy or tourist-favorite regions, operating a vending machine might bring in up to $400 USD each month. As you may expect, your revenues will rise significantly if you own several vending machines.
Location is the most important aspect in determining the profitability of your vending machine business. Busy places like office buildings, subway stations, and shopping centers are the best locations to place your vending machine.
The kind of goods you sell is another aspect to take into account for getting an idea of the profit. Stocking your machine with drinks and snacks, which are the most often bought things from vending machines, is a promising way to make a lot of money from this business.
Nevertheless, if you take the time to select the ideal locations and fill up your machines with in-demand goods, a vending machine business may be fairly profitable. But aside from that, launching this kind of business has a lot of advantages.
Benefits of Starting a Vending Machine Business in Dubai, UAE
For many, establishing a vending machine business in Dubai, UAE is their once-in-a-lifetime opportunity to generate huge sums of income passively. Here are some of the potential benefits of running this kind of business in the UAE:
- Vending machine businesses don’t require a lot of maintenance costs or much of an initial investment.
- As you can renew your inventory using the money earned from your vending machine, restocking your machine will cost you almost nothing.
- With a significant number of annual tourists and visitors, Dubai, located in the heart of the Middle East, is also one of the world’s top business and tourist destinations, making your vending machine business startup even more lucrative.
- It is a profitable and easy-to-run venture to operate and handle.
- The business regulations in the United Arab Emirates have also been simplified, making it extremely simple to conduct business in Dubai.
- It is simple to expand your business to add additional vending machines in more prime places throughout Dubai and the rest of the UAE.
- With the proper assistance, setting up a shop in the UAE is effortless thanks to its well-established business setup, immigration, and relocation procedures.
- There is only a 5% VAT rate for foreign investors, business owners, and entrepreneurs.
- A variety of vending machines is available for purchase, including those that sell gadgets, food items, travel necessities, and more.
- Dubai provides an exemption from corporate and personal income tax.
- With market restrictions and minimal bureaucracy, conducting business in the UAE is incredibly easy.
Risks of Running a Vending Machine Business in Dubai, UAE
There are certain risks to establishing a vending machine business in Dubai, UAE. These risks are as follows:
- Some shopping malls and retail centers in the UAE don’t allow you to put your vending machines on their property at all. If they do, they provide incredibly unattractive and useless locations for them.
- There is a chance that your machine breaks down. Even the most premium and costly ones have a chance of failing, causing certain losses to the company.
- The cost of renting a space for vending machines in shopping malls and centers is high.
- The profit of the vending machine business is location-dependent. The success of the vending machine industry in the UAE largely depends on where the machines are placed.
- As this business requires a vending machine, there is a need for ongoing servicing. This machine needs to be cleaned and refilled frequently. That takes time and costs a considerable amount of money.
- The place of vending machines is the most crucial factor. It would take a long time to arrange and discuss everything with the administration of retail centers and shopping malls because all popular malls and centers are reserved in advance for many months.
- The UAE industry is extremely competitive and there are already a large number of well-established vending machine enterprises operating there. This implies that finding customers and venues for your machines can be challenging.
- As the machines are left and operated unattended by any kind of staff, they are open to the risk of vandalism and theft. Because of this, it’s crucial to thoroughly weigh the risks before launching a vending machine business in Dubai.
Things to Consider When Establishing a Vending Machine Business in Dubai
Consider your niche before launching a vending machine business in the UAE. Typically, this entails stocking a rare item or placing a machine that is not yet serviced by other equipment. Both require much research. We recommend giving as much time to it as possible because it will lay the foundation of your business.
You must first figure out whether there is a solid justification for not stocking something if you intend to do so. Have you found a market, or is there simply insufficient demand for that product? Additionally, if you intend to move into a new space for setting up a vending machine, you must make sure that it receives enough foot traffic to support your equipment and that any ground rent is not too expensive as well.
When choosing any location, these factors must be taken into account. Target major streets, workplaces, medical facilities, academic institutions, airports, and shopping centers. However, bear in mind that each will have its own restrictions on where and what you can sell via vending machine.
Last but not the least, think about your expansion strategy or how you will scale up your business. Vending can be a terrific business to start small and grow, but it will be a lot more feasible if you have some specific goals in mind.
Required Approvals and Documents for Vending Machine Business in Dubai, UAE
To start a vending machine business in Dubai, you need:
- A mainland company with a commercial license to structure your firm.
- The Dubai Department of Economic Development’s (DED) approval of a Local Service Agreement (LSA).
- A lease agreement that has been authorized and registered by the Dubai Land Department inside the Dubai Municipality.
- You must register your business as an LLC (Limited Liability Company) with the trade licensing activity for your company must be Vending Machines Trading: Selling Commodities via Automatic Vending Machines.
- A lease agreement for the floor space that the vending machine will occupy.
- A certified trade name copy.
- Filled trade license application
- Local sponsors, directors, and shareholders identification and address proof and details.
- Copies of shareholders’ and directors’ passports.
6 Steps to Follow to Open a Vending Machine Business in Dubai, UAE
Here are the 6 steps that you need to take for establishing your vending machine business in Dubai:
Step 1. Choose a Company Name
The first step is to choose a company name for your business. Once you have selected a name, you need to register it with the Registry Office of the UAE.
The company’s trade name may include your name, but it must be used completely rather than just your initials or surname. The company name must comply with the UAE’s naming regulations, which state that no words relevant to Allah or Islam or offensive or vulgar words are permitted. There are other naming policies as well that you must follow.
Step 2. Outline Your Business Activities
You must define your anticipated business operations in detail before starting the license application procedure. To make sure they accurately correspond with the list the business activities by the Dubai Department of Economic Development (DED). This is a necessary step and you cannot ignore it. In order to ensure that you are properly licensed and prevent any unwanted delays, Riz and Mona will assist you with this stage.
Step 3. Apply for Initial Approval
The next step is to apply for Initial Approval from the Department of Economic Development (DED) after registering your trade name. The Initial Approval certificate is issued by the DED. You must choose the activities for your enterprise from the lists of authorized activities related to your license type, business plan, and operations.
Step 4. Select the Legal Business Structure for Your Company
A Vending Machine Trading License is necessary for all vending machine enterprises in Dubai in order to operate in a legal way. The commercial license type applies to this business activity. This type of business requires a Mainland Company structure. In the UAE, civil companies, sole proprietorships, and limited liability companies (LLCs) are the most common business structures.
When you know what you’re doing, applying for a license for your vending machine business in Dubai becomes an easy process. To help you set up your vending machine business fast and effectively, you should choose the professionals at Riz and Mona who specialized in business setup in Dubai, UAE.
Step 5. Submit Your License Application
After choosing a legal business for your company, submit the application for getting a license. While submitting your license application to the respective government bodies, provide the approvals and required documents as well.
A vending machine license costs vary from case to case but in general, you can expect it to be more than 20,000 AED. On top of that, there are other expenses to take into account. These include paying for applications for visas, ground rent, and obtaining any further permits that might be necessary for conducting this business. A vending machine’s cost can be around more than $1,000 – $2,000.
Step 6. Submit Your Visa Application
You can apply for your visa and open an account in a corporate bank once you’ve registered your vending machine business in Dubai. Depending on the terms of your business license, your visa can allow you to sponsor the visas of family members and employees. To get assistance with this crucial step, get in touch with the knowledgeable and experienced staff at Riz and Mona.
FAQs – Frequently Asked Questions
Are there vending machines in Dubai?
Yes, there are vending machines in Dubai. You can find them in various shopping malls and retail centers.
Can I put a vending machine in Dubai?
Yes, you can put a vending machine in Dubai. The best places to put a vending machine is where there is high foot traffic. You are allowed to set up your vending machine in shopping malls and retail centers.
How can I open a vending machine in Dubai?
To open a vending machine in Dubai, you need to follow these steps:
Step 1. Choose a company name
Step 2. Out your business activities
Step 3. Apply for initial approvals from different departments
Step 4. Select your legal business structure for the company
Step 5. Submit your license application
Step 6. Submit your visa application
Is vending machine a profitable business?
Yes, a vending machine is a profitable business in Dubai. Every year, millions of tourists visit this city and look for basic food items and other commodities. These goods can be put in a vending machine, allowing you to generate good profit.
Does Dubai have gold vending machines?
Yes, various hotels have gold vending machines in Dubai. You can visit these hotels to find one in the city.
Start Your Vending Machine Business in Dubai, UAE with Riz and Mona
Starting a vending machine business becomes easy when you partner with top-of-the-line business setup consultants in Dubai such as Riz and Mona. In order to help you with all the documents needed for the different governing bodies, company registration, company setup, and trade license application, our experienced professionals will manage the complete procedure on your behalf. They will also secure the mandatory external approvals on your behalf. Contact us now to get more information regarding setting up a vending machine business in Dubai or the UAE.