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Cloud Kitchen in Dubai: How to Set Up Your Business

Jun 20, 2022 | UAE Company Setup

Did you know that there are over 10,000 restaurants in Dubai? Setting up a cloud kitchen in Dubai can be a lucrative business venture. However, there are some important things to consider before you get started. In this article, we will provide an overview of the process involved in starting a cloud kitchen in Dubai.

We will also discuss the licensing requirements and other important considerations. So if you’re thinking about starting a cloud kitchen in Dubai, read on!

What Is a Cloud Kitchen?

A cloud kitchen is a commercial kitchen that doesn’t serve customers on-site. Food businesses that operate cloud kitchens typically deliver their food to customers via third-party delivery platforms like Uber Eats or Zomato.

Cloud kitchens can be a great option for food businesses because they require less space and fewer staff than traditional restaurants. They also have lower overheads, which means they can be more profitable.

Licensing Requirements for Cloud Kitchens in Dubai

If you want to set up a cloud kitchen in Dubai, you will need to obtain a commercial license from the Department of Economic Development (DED).

You will also need to register your business with the Dubai Municipality.

When applying for your license, you will need to provide a detailed business plan. This should include information about your kitchen setup, staff, menu, and delivery operations.

It is important to note that cloud kitchens are not currently allowed in residential areas in Dubai. So you will need to find a commercial space to rent or lease.

Advantages of Cloud Kitchen vs Traditional Restaurants

There are many advantages of cloud kitchens over traditional restaurants.

As we mentioned, cloud kitchens require less space and fewer staff. This means they have lower overheads, which can make them more profitable.

But let’s take a look at the advantages in detail together.

Savings on Rent

One of the biggest advantages of cloud kitchens is that they can be located in smaller spaces. This means you can save on rent, which is often one of the biggest expenses for restaurants.

In Dubai, commercial rents can be very expensive. But with a cloud kitchen, you can potentially get away with renting a smaller space in a less expensive location.

This can help you to keep your costs down and increase your profits.

Fewer Staff Required

Another advantage of cloud kitchens is that they require fewer staff. This is because there is no need for waiters or front-of-house staff.

In a cloud kitchen, all food preparation and cooking takes place in the kitchen. And once the food is cooked, it is delivered to the customer’s doorstep.

This means you can save on wage costs by having a smaller team of staff.

Improved Cash Flow

Another advantage of cloud kitchens is that they can improve your cash flow. This is because you don’t have to invest as much money in up-front costs like furniture and decor.

With a cloud kitchen, you can start small and scale up as your business grows. This means you can reinvest your profits back into the business, which can help you to grow even faster.

Room for Expansion

Finally, cloud kitchens offer room for expansion. This is because they can be located in smaller spaces.

As your business grows, you can simply add more cloud kitchens to your network. This gives you the flexibility to expand quickly and efficiently.

Larger Audience

Another advantage of cloud kitchens is that they can reach a larger audience. This is because delivery platforms like Uber Eats and Zomato have a large network of customers.

So if you want to reach more people with your food business, a cloud kitchen could be the perfect solution.

How to Set Up a Cloud Kitchen in Dubai: A Step by Step Guide

Now that we’ve looked at the advantages of cloud kitchens, let’s take a look at how you can set one up in Dubai.

Here is a step-by-step guide to help you get started:

Step One: Choose a Business Structure

The first step is to choose a business structure. There are three main options for cloud kitchens in Dubai:

  • Sole proprietorship
  • Limited liability company (LLC)
  • Free zone company

If you are a foreign national, you will need to set up an LLC or free zone company.

To set up an LLC, you will need to have a local sponsor. This is typically a UAE national who owns 51% of the business.

For a free zone company, you can have 100% foreign ownership.

Step Two: Choose a Location

The next step is to choose a location for your cloud kitchen. As we mentioned, cloud kitchens are not currently allowed in residential areas.

So you will need to find a commercial space to rent or lease.

When choosing a location, there are a few things to keep in mind:

  • The size of the space
  • The cost of rent
  • The proximity to your target market
  • The availability of parking

Step Three: Apply for a License

Once you have chosen a location, you will need to apply for a trade license.

To do this, you will need to submit the following documents:

  • A copy of your passport
  • A copy of your visa
  • A copy of your lease agreement
  • A copy of your Ejari certificate

Once you’ve gathered these documents, you can start the application process. There are several trade licenses you may qualify for, so you’ll have to determine which fits best with your business.

For example, if you’re planning on selling food, you will need to apply for a Food Trading License.

If you want to serve alcohol, you will need to apply for a Liquor License. There are also fees you will need to pay.

Step Four: Register Your Business

The next step is to register your business with the Department of Economic Development (DED).

To do this, you will need to submit the following documents:

Step Five: Get a Food License

The next step is to get a food license from the Dubai Municipality.

To do this, you will need to submit the documents you acquired above. In addition, you will also need to pass a food safety inspection.

You and your staff will need training in food safety procedures, and your kitchen needs to meet all the regulations set by the municipality.

These regulations include having the proper equipment and storage facilities.

After you’ve passed the inspection, you will be issued a food license.

Step Six: Get Insurance

The next step is to get insurance for your cloud kitchen. This is important because it will protect you from any liability claims that may arise.

There are a few different types of insurance you should consider:

  • Property insurance
  • Liability insurance
  • Product liability insurance
  • Workers’ compensation insurance

Step Seven: Open a Corporate Bank Account

It is crucial to keep your personal and business finances separate. So the next step is to open a corporate bank account for your cloud kitchen.

Make sure you keep track of your finances from day one. This will make it easier to prepare your taxes at the end of the year.

Step Eight: Hire Staff

Now that you have everything in place, it’s time to start hiring staff. First, you will need to decide what positions you need to fill. For example, do you need someone to cook the food, or can your kitchen staff handle that?

Once you’ve determined what positions you need to fill, you can start the hiring process.

There are a few things to keep in mind when hiring staff:

  • Make sure they have the proper visas and work permits
  • Conduct background checks
  • Provide training on food safety procedures
  • Set up payroll

Step Nine: Decide on Packaging and Delivery

Now that your cloud kitchen is up and running, it’s time to start thinking about packaging and delivery.

You will need to decide what type of packaging you want to use. For example, do you want to use disposable or reusable containers?

You will also need to decide how you want to deliver the food. There are a few options:

  • You can use your own delivery staff
  • You can partner with a delivery service
  • You can allow customers to pick up their orders

Step Ten: Market Your Cloud Kitchen

The final step is to market your cloud kitchen. There are a few ways to do this:

  • Create a website or blog
  • Use social media
  • Advertise in local publications
  • Participate in food festivals

By following these steps, you can start your cloud kitchen with ease. Just be sure to do your research and have a solid plan in place.

If you need help with any of the steps, we can assist you!

Don’t Forget the Details: Cloud Kitchen Considerations

When you are starting a cloud kitchen, there are some other considerations to keep in mind.

For example, you will need to decide what type of food you want to serve. Will you be serving breakfast, lunch, or dinner? Will you be serving a specific cuisine?

You will also need to decide how you want to price your food. For example, will you be using a la carte pricing or buffet style?

You will also need to decide on how you are taking orders. Many cloud businesses use an online ordering system.

How Much Does It Cost to Start a Cloud Kitchen in Dubai?

Now that you know all the steps involved in setting up a cloud kitchen in Dubai, you’re probably wondering how much it will cost.

The answer is that it depends on a few factors, such as the size of your cloud kitchen and the type of equipment you need.

Generally speaking, you can expect to spend anywhere from AED 50,000 to AED 100,000 on start-up costs.

This includes the cost of renting a commercial kitchen, purchasing equipment, and getting all the necessary licenses and permits.

Promoting Your Cloud Kitchen in Dubai: Best Practices

As we mentioned before, once your cloud kitchen is up and running, you will need to start promoting it.

Let’s take a detailed look!

Social Media

Social media is one of the best ways to promote your cloud kitchen. And setting up a marketing strategy specifically for social media platforms is imperative to the success of your cloud business.

There are a few things to keep in mind when promoting your cloud kitchen on social media:

  • Use high-quality photos and videos
  • Use relevant hashtags
  • Post regularly
  • Engage with your audience

SEO

Another great way to promote your cloud kitchen is to set up a website or blog. This is a great way to share information about your cloud kitchen, such as your menu, hours of operation, and contact information.

It’s also important to make sure that your website is optimized for search engines. This is where SEO comes in.

There are a few things you can do to make sure your website is optimized for SEO:

  • Use relevant keywords
  • Use alt tags for images
  • Create backlinks

Loyalty Programs

A loyalty program is a great way to encourage customers to come back to your cloud kitchen.

The most successful loyalty programs offer rewards that are valuable to customers. For example, you could offer a discount on their next purchase or a free item after they’ve made a certain number of purchases.

You can also offer loyalty points that can be redeemed for discounts or free items.

Set Up a Cloud Kitchen in Dubai Today

It’s time to get started now that you’ve seen all of the steps involved in setting up a cloud kitchen in Dubai. We can help you with any of the steps, from finding a commercial kitchen to getting your cloud kitchen license.

Are you looking for a trusted advisor? Contact us today!

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