That said, there are already a number of entrepreneurs and chains which have opened up in this part of the world, both because Italian design in general enjoys a fine reputation, and because income per head is rather high. So does it make sense to start up a gelato parlour in Dubai? Where would be the best place to open? What licenses and permits are needed and what is the market price for gelatos?
Dubai is one of the seven Emirates that make up the United Arab Emirates. It has the biggest population of them all and is the second largest in terms of area after Abu Dhabi.
Dubai’s crude oil reserves are much smaller than Abu Dhabi’s and that may be one of the reasons why it invested in sectors other than petroleum – such as real estate and finance – before the others did.
Today, Dubai is a top tourist destination, with a rather lively real-estate market and a top maritime trading centre. It is currently looking to attract IT and finance firms to the newly-built Dubai International Financial Centre (DIFC). Air transport is handled by the state Emirates Airline, founded in 1985 and based at Dubai’s international airport.
The authorities have recently created several free trade zones, with the aim of attracting foreign investment. Dubai’s Internet City and Media City, the two partners in TECOM (the Dubai Technology, Electronic Commerce and Media Free Zone Authority), have attracted IT giants such as EMC, Oracle, Microsoft and IBM, while the media sector already features Associated Press, ARY, NBC, CNN and Reuters. Dubai’s Knowledge Village (KV) is connected to Internet City and to Media City and aims to become their educational partner, training the next generation of communication professionals.
Dubai’s population consists of just 20% locals with a whopping 80% being made up of immigrants, most of whom work in the construction sector.
Perhaps the loveliest tourist area is Jumeirah, where the Al Maktum family’s hotel chain has built four of its most attractive hotels, including the world-famous Burj al-Arab (or Arabian Tower), which has become the symbol of Dubai around the world.
Where to open your gelateria
Due in part to climate-related factors, much of a gelato parlour’s success depends on where it’s located. In a shopping mall or out on the street? At first sight, while it might seem that opening in a shopping centre means guaranteed sales week in week out, in point of fact that would be true only for a few select malls, while others only fill up at weekends. And start-up costs could be huge.
One centre that pulls in the crowds is the Dubai Mall, the world’s largest shopping centre, with over 220,000 square metres of shopping area, plus a 14-screen cinema and a theatre. Another popular midweek shopping centre is the Mall of the Emirates, which also has an area totally set aside for winter sports. All of the other malls only fill up at weekends. That means that if you have Lady Luck (or good business connections) on your side, you might be able to find a spot at the two most famous malls in Dubai, but there is a hefty price to pay: rents are colossal at around 600,000 dirhams (€140,000) for a small 3x3-metre shop, plus a minimum contract of 2 years with upfront payment. So the second option is to open up on the street, but that reduces the working year to just eight months. There are very famous, crowded places such a JBR and WALK CITY, or trendy ones such as DUBAI BOX (where the GROM gelato chain has opened up). Of course, rents are high here too. Also, there is no work here for 4 months a year, from June to September, both day and night. And custom is also slow in May and October. Rental contracts are also 2 years with payment upfront, though there may be greater payment flexibility.
Licences and permits
Starting up a business in Dubai requires a series of documents and permits. There are two types of commercial licence:
- a licence in the Free Zone, where you are even allowed to have a 100% shareholding in a shop. Currently there are various areas within Dubai known as “free zones”, such as DIFC, JLT TICOM and others.
- an In Town commercial licence, but this requires a local shareholder to own 51% of the firm, who can either be operational or just an investor, or else receive a fixed annual fee.
Once you have identified the location and obtained the licence, it is time to deal with the permits.
First of all, the Municipality HACCP permit which costs around 70,000 dirhams (16,000 euros) for a gelato production workshop, though it is cheaper for a sales outlet.
Another important permit is the Civil Defence one, where the fire brigade have to check everything, from the electrics to the sprinkler system, from the emergency exits to the air conditioning.
Finally, you will have to apply for the Diwa (electricity supply). Make sure to apply for enough kW as if you suddenly realise you need to increase it, that can take up to 6 months.
Once you have all the permits, you can go ahead with the launch, with the added bonus of knowing there are no taxes to pay. The only other regulatory provision relates to the protection of employees (i.e. wage payments). The employer pays the full amount of the employees’ wages by cheque to a Dubai Ministry of Labour-authorized institution, which will pay the individual wages no later than the 15th of the following month.
Prices can currently be divided into two categories:
- an industrial ice cream shop will charge between 9 dirhams for a regular scoop to 12 dirhams for a large scoop, and up to 16 dirhams for two scoops
- a hand-made gelato parlour will charge between 14 dirhams for a single 80-gramme scoop, up to 20 dirhams for two scoops
Frozen Yogurt starts from a regular portion for 15 dirhams to a 160-gramme portion for 20 dirhams, plus a topping that varies from 3 to 5 dirhams.
When you look to open a gelato shop in Dubai, the main thing is to decide first whether it is worth opening a workshop offering excellent gelato to eat in the shop and which might produce gelato for local hotels and restaurants, or a gelateria with table service. You also need to make up your mind whether to sell just gelato, or other products too. There is no set solution, so it very much depends on the needs and the setting where you will be opening up.
Another key factor when opening a gelateria is to have an expert gelato-maker to make the various types of gelato you are going to be selling or else take part in one of the various corporate courses available. Experience of working in the gelato sector is a help for the entrepreneur, but that is far from all. You have to know how to produce good gelato. If you want your business to be truly successful, we recommend using consultants and/or companies in the sector who can provide you with all the support you need throughout the start-up phase.
Want more information on how to open your gelateria?
Write to us at firstname.lastname@example.org or take a look at the list of manufacturers of ingredients for gelato.