Setting up a vending machine business in Dubai offers lucrative opportunities for savvy entrepreneurs. These machines are found in various locations across the region, from bus stations to restaurants. Unlike many retail opportunities, a vending machine business is a relatively hands-off operation, making it an appealing option for those looking to make a more passive income.
In this article, we explore the setup process, costs and advantages of setting up a vending machine business in Dubai. We will discuss:
● Vending machine business in Dubai – overview
● Vending machine license Dubai – step by step
● Cost of starting a vending machine business in Dubai, UAE
● Pros and cons of starting a vending machine business in Dubai
● Is a vending machine profitable?
● How to choose a location for a vending machine
● How Worldwide Formations can help
Vending machine business in Dubai – overview
Vending machines are on the rise. Convenience has always been key, but the social distancing requirements of Covid-19 accelerated the trend significantly. According to recent data, the global vending machine market is predicted to reach a global value of USD 25.25bn by 2027.
In Dubai, demand for vending machines has sky-rocketed. And, as a world-class tourist destination with hundreds of entertainment, retail and transport spaces to fill, the opportunities for vending machine entrepreneurs are on the rise too.
Vending machine license – step-by-step guide
To open up a vending machine business in Dubai, you will need to ensure you have the following documents:
● Proof of ID and addresses of directors and shareholders
● Passport copies of directors and shareholders
● Copy of company name certificate
● Copy of the LSA (Local Service Agreement)
● Copy of tenancy contract
● Completed trade licence application
Once you have these documents in order, applying for your licence is a relatively straightforward experience, though it can be confusing without knowledge of local laws and regulations. For that reason, we recommend working with a business advisor at Worldwide Formations, who will help you navigate the whole process.
For an insight into what to expect, we have broken down the process into five easy steps.
Step 1: Register your company name
The first thing you need to do is register your company name. Make sure this name is unregistered and keep the local naming conventions in mind. For example, your company name should not include abbreviations or be considered blasphemous.
Step 2: Define your business activities
Next, you will need to outline your business activities in line with the list provided by the Department of Economic Development (DED).
Step 3: Choose a setup location for your business
At this stage, you must decide whether to set your business up on the mainland or in a free zone. Both have their advantages. Free zones offer significant tax advantages, 100% foreign ownership and full repatriation of profits. If you are hoping to trade with a local market, you will need to set up on the mainland.
Step 4: Submit your licence application
After steps 1 to 3 are completed, you can submit your licence application along with the documents listed above. It is essential to provide everything requested to avoid slowing down the process.
Step 5: Apply for your visa
Once you have submitted your licence application, you can apply for your visa and open a bank account. Depending on your licence, you may also be eligible to sponsor family members and employees. You will also need to arrange your medical checks to gain an Emirates ID, a legal requirement across the region.
Cost of starting a vending machine business in Dubai, UAE
The costs of launching a vending machine business in Dubai vary considerably, usually ranging from AED 10,000 to 12,000. The total cost will depend on factors such as your setup location, ground rent, whether you hire staff and require extra visas, equipment and other considerations.
For a more accurate idea of how much a vending machine business might cost you, get in touch with the team at Worldwide Formations. Our business advisors will be happy to prepare a free quote tailored to your specific circumstances.
Pros and cons of starting a vending machine business in Dubai
There are numerous advantages to starting a vending machine business in Dubai, as well as some disadvantages. Let’s dig a little deeper into the pros and cons.
Advantages:
● Minimal overheads
Running a vending machine can cost next to nothing, given that you simply restock your inventory with money made from that machine. You will only need to pay for the machine and initial stock, and there is little need for staff.
● Easy to scale
As your vending machine business grows, it’s easy to add new machines to your network and increase your profits exponentially.
● Variety of goods
You can sell almost anything you like in a vending machine, from food and drinks to toys and travel goods.
● High demand
Dubai has one of the fastest-growing populations in the Middle East, with several high-traffic areas. These citizens and visitors are likely to use vending machines.
● Government support
The UAE offers minimal bureaucracy and one of the world’s most competitive tax regimes, with 0% income tax and low VAT rates of only 5%.
Disadvantages:
● Competition
Because setting up a vending machine business in Dubai is relatively straightforward, you will be competing with many other savvy entrepreneurs, particularly when it comes to choosing a premium location.
● Outside influences
While you can control what you decide to sell, vending machine popularity is dictated by consumer trends. You may want to sell cuddly toys, but most data shows that consumers seek out sugary snacks and sodas.
● Not 100% passive
While there are minimal staff requirements for a vending machine business, you will still need to ensure that your machine is well-stocked and working at all times. Furthermore, technical faults may force you to adjust product offerings or take a hit.
Is a vending machine business profitable?
Yes, a vending machine business can be profitable. According to recent research, a single vending machine can generate between USD 30–60 per week. If you own more than one vending machine, your profits will increase significantly too.
How to choose a location for a vending machine?
The amount of money your business makes depends on the location of your vending machine. Do your research and choose locations with high footfall, such as shopping centres, office buildings and transport hubs.
How Worldwide Formations can help?
Setting up a vending machine business in Dubai can be profitable, but it pays to understand local laws, regulations and customs. At Worldwide Formations, our business advisors have helped countless entrepreneurs quickly obtain their vending machine business licenses. We advise clients in more than 90 countries across the world, and we have dedicated experience in both free zone and offshore company formation in the UAE.
Our consultants will help you navigate the entire process, from initial setup to location advice and beyond. We also offer a full suite of value-added services for international entrepreneurs, such as bank account opening, virtual office incorporation and VAT registration.
To find out more about how Worldwide Formations can help and to obtain a personalised quote, please contact us today.
