UAE: Can I start a baking business from home?
Cloud kitchens, delivery services make it easy for baking enthusiasts to start a business
Dubai: If you are a passionate home baker, and have received great reviews for your culinary skills from family and friends, how feasible is it to start a business on the side, to earn an extra income? A Gulf News reader, who works full-time, wrote in asking if she could work part-time by setting up her own cakes and pastries business in the UAE.
She wrote: “I read the Gulf News article on sole proprietorship. I bake cakes and pastries sometimes for friends and family when requests arise, on special occasions. I wonder if I can set it up as a business. Would it be possible to acquire such a licence so that I can legally sell and display my baking items? In times like these, when one needs an extra income, I think this would be an opportunity for me to venture a little, while I am working at the same time. If so, please let me know the exact requirements and other details that I may need to know.”
Gulf News spoke with Anisha Sagar, General Manager at Business Incorporation Zone (BIZ), a Dubai-based company formation specialist, who spoke about how setting up a business, while working full-time is an option available to the reader.
“This can definitely be done as a start-up and does not require any permissions or No Objection Certificates from your employer or sponsor, if you are applying with a free zone,” Sagar said.
She added that the reader had the option to apply for a licence with Fujairah Creative City as well as the Dubai Department of Economic Development (DED).
This can definitely be done as a start-up and does not require any permissions or No Objection Certificates from your employer or sponsor, if you are applying with a free zone.
“With the Fujairah Creative City licence, you can apply as an e-commerce establishment and have 100 per cent ownership of the business. With the Dubai Department of Economic Development (DED), you do not have sole ownership, and would also need to have a café or bakery to operate from, which requires the necessary approvals from the municipality and other relevant authorities,” Sagar said.
How to apply with Fujairah Creative City
You can apply for an e-commerce licence by providing the following documents:
1. Passport copy with visa page. You would also need to provide the entry stamp on your passport for when you entered the UAE.
2. Passport-sized photograph.
3. Filled out application form.
Cost
You can apply for two types of licences, depending on whether you need a visa or not.
• Dh8,400 (e-commerce and general trading activities)
• Dh17,499 (licence + free visa valid for three years)
The first option is applicable if you are already working full-time and have an employment visa, or if you are on a family visa.
If you wish to get a visa along with the licence, you can select the second option.
What about the logistics? Cloud kitchens are here to help
As any food-related activity requires the necessary approvals from municipal and civil defence authorities in the emirate, a viable option for home bakers is to rent a cloud kitchen.
“The golden rule of having a free zone licence is that you can operate only within the free zone. So, for home bakers who opt for the free zone licence, they can use the services of central kitchens, which offer space and also help with the delivery side of things. Especially during COVID-19, many food delivery companies like Zomato and Deliveroo have also started providing delivery services for this purpose. So, as a business owner, you are essentially outsourcing your food prep to a licensed cloud kitchen on the mainland and outsourcing your delivery to a licensed delivery agent,” Sagar said.
By tying up with these agents that have a mainland licence as outsourcing partners, baking enthusiasts can set up and operate their businesses legally in the UAE.
DED Professional Licence
If, however, you wish to run a bigger operation and own a bakery or café, then you can also apply for a mainland licence, through the Dubai DED’s professional licence, with the ‘Pastry preparing’ business activity. A Dubai Municipality approval along with a physical space is required, and the licence provides the quota for up to four employee visas.
Cost
The DED mainland licence cost starts from Dh21,000 per year
How to apply for a DED Professional licence
According to Sirajudeen Ummer, Public Relations Officer at Dubai-based First Gate Business Services, applying for a professional licence can be done at Tas’heel centres or the DED branches in Dubai. He shared details of how a person can complete the business registration and set up.
Step 1: Reserve commercial trade name
“You would first need to reserve a trade name from the Tas’heel Centre in Al Twar or at the DED Business Village, near Clock Tower,” Ummer said.
Documents required:
• Any one of the partners' passport copy and list of proposed names.
Cost: Dh210 government fee, Dh50 service charge.
Step 2: Initial approval
To apply for the initial approval, you would need to get an application form filled out at a typing centre, which needs to be signed by the partners and then submitted to DED.
Documents required:
• Name Reservation Certificate
• Application form
• Passport copies of partners
• NOC from sponsor for expatriate partner on an employment or residence visa.
• Community Development Authority Sewage and Irrigation Management (Dubai Municipality)
Cost: Dh400 approximately
"The Dubai Municipality should only be approached after the licence has been issued for external approval," Ummer said.
The Dubai Municipality should only be approached after the licence has been issued for external approval.
Step 3: Prepare and attest LLC Agreement (Memorandum of Association)
This can be done from a legal translator in the UAE. The agreement needs to be attested from the Notary Public, either at Al Twar or Al Barsha.
Cost: Approximately Dh1,000
If the firm is a Sole Establishment with 100 per cent expatriate ownership, the Local Service Agent Agreement needs to be attested.
Local agent fee: Dh4,000-Dh5,000
Step 4: Prepare the tenancy contract for the office or shop through Ejari
The tenancy contract needs to be applied for through the Ejari system and approved from the Municipalty Planning Section at a DED branch.
Cost: Dh195
Step 5: Submit documents to DED
You would then need to submit the following documents at a DED branch:
• Attested LLC Agreement (original copy)
• Application form
• Name Reservation Certificate
• Initial Approval
• External departments’ approval
• Tenancy contract
• Ejari Registration Certificate
• Passport copies of partners
• NOC from sponsors (if required)
Step 6: Apply for your visa and Labour Establishment cards with the Ministry of Human Resources and Emiratisation
This process can be completed at an Tas’heel centre or online through www.mohre.gov.ae by selecting the ‘Open Establishment Card’ service.
Cost: Immigration Establishment Card for one year - Dh572
Labour Establishment Card - Dh123