How to start a Cloud Kitchen in Dubai : Ultimate Guide 2024

how to start a cloud kitchen in Dubai

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The online food industry in the UAE, especially in Dubai, is booming, and we see a surge in the growth of restaurants, which presents a lucrative opportunity for cloud kitchen businesses. These kitchens offer a cost-effective way to deliver meals directly to consumers, bypassing the high expenses of traditional restaurant settings.

Open a cloud kitchen in Dubai is a smart choice for the food business. Cloud kitchen need less space, which is great because rent is high in Dubai. Without a place for customers to sit and eat, these kitchens can be set up in smaller areas, saving money. This is helpful in a city like Dubai, where space is at a premium.

What is a cloud kitchen?

A cloud kitchen, also known as a ghost kitchen, is a cooking space created for preparing delivery-only meals. It’s like a restaurant kitchen but without a dining area for customers. Chefs use these kitchens to make food that people order online through apps or websites. This way, restaurants can serve more customers without needing a big, fancy place for people to sit and eat.

The idea behind a cloud kitchen is smart and cost-effective. Since there is no need for tables, chairs, or decorations, the focus is entirely on making delicious food. This setup is great for new chefs or food businesses that want to try out their recipes without spending a lot of money on a full restaurant. Cloud Kitchen accepts orders through online portals, including third-party platforms and mobile apps.

Benefits of starting a Cloud Kitchen in Dubai

The cloud kitchen in Dubai comes with many benefits. A few of them are mentioned below:

1. Fewer Staff Needed

The staffing requirements for cloud kitchens are typically less compared to traditional restaurants because there is no need for front-of-house staff like waiters, or hosts. This efficient staffing not only reduces payroll expenses but also simplifies management and scheduling.

2. Less Space Required

Cloud kitchens operate in smaller spaces since they don’t need a dining area or large storage spaces for dining equipment and furniture. This is particularly helpful in urban areas where real estate prices are high, as it allows for more efficient use of space and potentially lower rent costs.

3. Eco-Friendly

With no dine-in services, cloud kitchens can potentially have a smaller carbon footprint due to lower energy consumption for lighting, heating, and air conditioning.

4. Access to a Large Customer Network

Since cloud kitchens operate mainly through online platforms, they can have a vast customer base. This reach is particularly useful in densely populated urban areas or places with a high dependency on food delivery services, as it broadens the potential market.

5. Improved Cash Flow

The lower early investment and current operating costs can lead to improved cash flow for cloud kitchen businesses. With fewer financial commitments tied up in fixed assets and ongoing expenses, these kitchens can reach profitability quicker and have more funds available for reinvestment or as a financial cushion.

6. Opportunities for Business Growth

Cloud kitchens offer greater flexibility for expansion. You can test new concepts or menus with minimal risk, expand into new areas without much investment, and scale operations up or down based on demand. This flexibility allows for growth for the business.

7. Reduced Overhead Costs

Operating a cloud kitchen comes with lower overhead costs. Without a physical dining space, there are savings on aspects such as utilities, maintenance, and in-house service equipment. This decrease can impact profitability, mainly in areas with high operating costs.

8. Efficiency in Operations

These kitchens focus only on food preparation and delivery, streamlining the process and often resulting in quicker improvement times. This efficiency is important in Dubai’s fast-paced lifestyle.

How to set up a cloud kitchen in Dubai – Process

How to setup a Cloud Kitchen in Dubai

There are many people who are interested in opening a cloud kitchen in Dubai, but are always stuck at “How to open a cloud kitchen”. This happens due to not knowing the cloud kitchen requirements and the process thoroughly, and in this case, RFZ can help you understand the process thoroughly and can assist you in getting the license too.

Step 1: Select Business Structure

Selecting the right business structure is an important first step for starting a cloud kitchen in Dubai. You have three primary options of business structure to pick one from:

  • Sole Proprietorship
  • Limited Liability Company (LLC)
  • Free Zone Company

Step 2: Choose a business name for your cloud kitchen

The next step is to choose a name for your cloud kitchen keeping the legal restrictions in mind. The Dubai government has its own set of rules according to which a company or business can choose a name. Pick a company name that does not upset people and does not have any negative words. The name should match what your company does.

Step 3: Choose a business location

As a foreign entrepreneur, your choices are limited to either an Limited Liability Company (LLC) or a Free Zone Company.
The cloud kitchens are not allowed to be in residential areas of Dubai. So, it is necessary to must keep the following factors in mind:

  • The dimensions of the premises
  • Rental costs
  • The closeness to your intended customer base
  • Parking availability

Step 4: Get a Trade License

After selecting your location, the next step is to apply for a trade license.
For this process, you should prepare the following documents:

  1. A copy of your passport.
  2. A copy of your visa.
  3. A copy of your lease agreement.
  4. A copy of your Ejari certificate.

With these documents in hand, you are ready to start the application process. Various trade licenses are available, so it is essential to identify the one that aligns most closely with your business needs.

Step 5: Obtain Food License

Now, the focus shifts to obtaining a food license from the Dubai Municipality. To get the license required for Cloud Kitchen, you will need to use the documents that are mentioned above.

In addition, you must comply with the Dubai food code and successfully pass a food safety inspection. This inspection is part of the regulatory requirements enforced by the food safety department, which are essential for operating a cloud kitchen.

Both you and your staff must undergo training in food safety procedures. Your kitchen must meet all the regulations specified by the municipality. This includes ensuring that food processing equipment, storage areas, and preparation spaces are up to standard and that all food items are properly managed.

You will be given your cloud kitchen license once your kitchen passes the inspection and meets all the necessary regulations, including having the right equipment and storage facilities.

Step 6: Apply Visa/Residency

After getting the license, you can start your visa application. As a business owner, you can apply residency for yourself and your employees.

Step 7 : Open a Corporate Bank Account

It is suggested that you maintain your personal and business finances separately. The next thing to do is to open a business bank account for your cloud kitchen. This will facilitate effective financial management and simplify the year-end tax preparation process.

Step 8: Hire Staff

As your cloud kitchen in Dubai setup is complete, it is time to focus on staff recruitment. Begin by identifying the roles that need to be filled. Ask yourself whether you require a chef or if your current kitchen team is sufficient. After noting down the necessary positions, you can proceed with the recruitment process.
Remember a few key points during hiring:

  • Verify that all potential employees have the right visas and work permits.
  • Perform thorough background checks.
  • Ensure they receive training in food safety

Step 9: Get Insurance

The following step involves getting insurance, an important measure to safeguard yourself against possible accountability rights. You should expect several insurance types including the following:

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

Step 10: Packaging and Delivery

By now, you have set up your cloud kitchen in Dubai, and it is operational. Now the question arises: how will you pack and deliver the food? For this, you will need packaging and delivery, and you will need to decide what type of packaging you want, disposable or reusable containers. Also, you need to decide which delivery option you will be opting for. Use your delivery staff, partner with a delivery service, or ask the customers to pick up their food.

Documents required to open a Cloud Kitchen Dubai

Following are the documents required to open a cloud kitchen:

1. Passport Copy of the Owner/Shareholder

Providing a passport copy is necessary for identity verification. It ensures that all legal and financial transactions are transparent and traceable.

2. Visa Copy of the Owner/Shareholder

The visa copy is necessary to confirm the legal status of the owner/shareholder in the country. It is a key document to prove that the individual is authorized to start and run a business in Dubai.

3. Few Name Choices for the Company Reservation

Offering several name options for your business confirms a higher chance of approval, as some names might already be in use or not align with regulations. It also reflects your flexibility and preparation in the company setup process.

4. Lease Agreement

A lease agreement is a legal proof of your business location. It is necessary for regulatory compliance and is often required for various administrative procedures, like obtaining licenses and permits.

Cloud Kitchen Setup Cost in Dubai

Setting up a cloud kitchen in Dubai involves various costs, including renting the space, buying kitchen equipment, and obtaining necessary licenses. Opening a cloud kitchen cost can vary depending on the kitchen’s size, location, and the quality of equipment used.

Other factors like staff salaries, utilities, and marketing also affect the overall cost. Each business needs are unique, so the investment can range from modest to substantial.

FAQ’s

1. What is the difference between a cloud kitchen and a traditional restaurant?

Ans: A cloud kitchen, also known as a ghost kitchen, primarily focuses on preparing food for delivery or takeout, operating without a traditional dine-in space or customer-facing area. On the other hand, traditional restaurants offer a complete dining experience with an on-site dining area, often emphasizing ambience, customer service, and food quality. Cloud kitchens tend to have lower overhead costs due to the absence of a dining area and typically rely heavily on online ordering platforms.

2. Which license is required for a cloud kitchen in Dubai?

Ans: In Dubai, a cloud kitchen requires a specific set of licenses to operate legally, which includes a food license and a trade license, depending on the exact nature of the business. These licenses ensure food safety regulations and legal business operations. It is important to consult with local authorities or a legal advisor like RFZ to understand all the specific licensing requirements and compliance standards for running a cloud kitchen in Dubai.

Summary

The cloud kitchen model in Dubai represents a noteworthy change in the food service industry, aligning with the city’s innovative and fast-paced nature. These virtual kitchens provide to the growing demand for delivery-focused dining, offering a wide range of culinary options without the overhead of traditional restaurant spaces.

They provide a cost-effective solution for restaurant owners while embracing technological advancements for efficiency. As Dubai continues to evolve as a global hub, cloud kitchens are becoming an essential part of its culinary landscape, meeting the needs of its cosmopolitan population and strengthening the city’s reputation as a forward-thinking and flexible metropolis.

For a free consultation, contact us at +971 4 589 0815. You can also send us a WhatsApp message at +971 4 589 0815 or email your questions to info@rfz.ae. We are here to assist you!

Umber Awan
Umber Awan

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