A Comprehensive Guide for Starting a Cloud Kitchen in Dubai

A Guide on Forming a Cloud Kitchen Business in Dubai

The food industry is constantly evolving, and nowhere is this more evident than in the UAE. While full-service restaurants will always be a mainstay of food service, the E-commerce market and food delivery services are exploding in popularity. In fact, the online food business is expected to grow by over 200 million by 2025.

Let's face it: Owning and operating a full-service restaurant can be costly. Starting your own business in this market can be extremely cost-prohibitive between the overhead and expensive equipment.

And that’s precisely why cloud kitchens have risen in popularity. And if you’re looking for a viable way to form your food service business, these delivery-based commercial kitchens are a perfect solution. Below, we’ll dive deeper into this industry business setup in Dubai and how to take advantage of its lucrative benefits.

Cloud Kitchen Businesses in Dubai

What is a cloud kitchen, you may be asking yourself? Also known as a "ghost kitchen," these commercial kitchens don't serve people on-site but rather prepare food for delivery via third-party E-commerce platforms such as Door Dash or Uber Eats. They’re also regularly ‘leased’ out by various franchises and food production companies to sell their products.

Commercial kitchens for delivery companies tend to be low-risk, low-overhead businesses that can produce significant profits. Compared to traditional restaurants that must pay for infrastructure, supplies, and equipment, renting spaces from commercial kitchen owners is much more financially viable.

A big reason for this industry’s success comes from the e-commerce businesses that utilize these establishments. Companies such as Zomato, Uber Eats, Deliveroo, and more are vital to the existence of cloud kitchen establishments.

The Benefits of Starting a Cloud Kitchen in Dubai

Forming a cloud kitchen in the UAE can come with a wide-ranging set of benefits. These include:

1. Low Overhead

Compared to brick-and-mortar establishments, cloud kitchen projects typically have much less overhead. They require less equipment, less square footage, and fewer costs related to signage and physical advertising.

2. Low Risks

Cloud kitchens are a great, low-risk way for established franchises to experiment with new concepts and recipes before introducing them to their main restaurants.

3. Expanded Flexibility

Unlike physical establishments, cloud kitchen restaurants can change menu items quickly without spending tons of money on changing or updating physical menus.

4. Expandability

With decreased operating costs, expanding or evolving your business model is far easier than with a standard physical restaurant.

5. Improved Efficiency

Since cloud kitchens are primarily focused on delivery models, they often operate more efficiently with more straightforward and quicker systems and processes.

How to Form a Cloud Kitchen in Dubai

So, you’ve decided to start your own business! Now what? Don't worry. If you're unfamiliar with company formation in Dubai, you might want to seek the help of third-party business consultant experts like MSZ Consultancy. But if you're set on going through the process alone, we can help you! Below, we've put together the steps to handle business setup in Dubai.

1. Choose a Trade Name

Your first step will be to choose a company name. This company name must be sent to the Department of Economic Development (DED) and may not contain any previously used names or names that include profanity.

2. Find a Business Location

You'll also want to choose a location for your business activity. In the UAE, you'll have the choice between forming your company in Dubai's Mainland, Offshore, or in one of the many Free Zone jurisdictions located throughout the city. Each of these jurisdictions carries different rules, regulations, and advantages. As such, you'll want to spend considerable time choosing the right option for your investments.

3. Prep Your Infrastructure

From cooking ranges to refrigerators, ovens, fryers, freezers, and cutlery, you’ll want to begin amassing the equipment you’ll need for your cloud kitchen business in Dubai. This will also include choosing the food packaging and containers to keep your product fresh until it reaches its destination.

4. Acquire the Necessary Licenses

A food service business will require several licenses for you to operate legally. For this, you'll need to:

5. Trade License

Your trade license will legally allow you to run the business side of your operation. For this, you’ll want to gather the necessary documentation and submit an application to the DED.

6. Food License

You'll also need to secure a food license. The Food Safety Department of Dubai is a legal body that presides over issuing food licenses. For this, you'll need to submit floor plans for your establishment and note any food storage areas, windows, equipment, entrances, and exits.

7. Additional Applications

Aside from food and trade licenses, you’ll also need to secure a resident visa. This will require you to secure a medical exam. As a business owner, you’ll also be able to sponsor visas for family, employees, and friends.

8. Hire Staff

Your business won’t run without employees! Luckily, Dubai is home to a skilled workforce that will allow you to develop a workforce quickly. Additionally, operating a cloud kitchen requires minimal staff, saving you money and employment costs.

9. Open Corporate Bank Accounts

Your new cloud kitchen business will need to be able to send and receive money regularly. To facilitate this, you must contact and open a corporate account with a banking institution.

Business Setup Cost in Dubai

The cost you’ll incur for business setup in Dubai will depend on several factors. First, to determine this cost, you must factor in your company size, overhead costs, location, employees, advertisement, and government regulations.

If you’d like to learn more about determining your business setup cost in Dubai, contact business setup consultants like MSZ Consultancy.

MSZ Consultancy is Your Premier Business Consultants!

Whether entering the market as a new investor or as part of an established company, you are owning and operating a cloud kitchen business can be a highly lucrative endeavor. If you possess the business acumen and strategy, you can maximize your investments and grow your new enterprise.

And if you’re looking for help with this process, contact MSZ Consultancy. We have years of experience helping investors and entrepreneurs navigate the ins and outs of operating a business in the UAE. From company formation in Dubai to securing business visas or local sponsorship, we have the expertise to maximize your investments while minimizing costs.

Need help with the business licensing process? We can help! Do you need the assistance of PRO Services? Whether we’re assisting you with day-to-day business operations or helping determine your overall legal structure, you want the help of knowledgeable business consultants.

Call us today at +971 52 544 1248 for a free consultation about how we can help you!