Buying a Restaurant in Dubai: Key Money, Licence Transfer and Due Diligence (2026 Guide)

Buying an existing restaurant in Dubai can get you trading months faster than starting from scratch, but only if the business you pay for is the business you actually receive. Whether you are browsing a restaurant for sale in Dubai for the first time or looking to buy a business in Dubai as an investor, three questions decide the outcome: what your payment really buys, which licences and approvals survive the sale and whether the numbers are real.

This guide answers those questions for food and beverage specifically. For the general acquisition process, including share versus asset deals, read our guide Can You Buy a Fully Operational Business in Dubai?

Quick answers

• Is key money legal in Dubai? It is not a defined concept in Dubai tenancy law, and at least one law firm reads payments made to persuade an existing tenant to leave as prohibited. Structure and document what you pay for and take legal advice first.
• Do alcohol and shisha licences transfer? Assume not automatically. Both depend on the premises and on the operator being approved, so make the sale conditional on approval.
• How do you verify revenue? Reconcile at least two years of accounts against bank statements, VAT returns and POS data.
• Will the landlord approve the assignment? A lease cannot normally be assigned without the landlord's written consent, so get it in writing before you pay.

What is key money, and is it legal in Dubai?

Key money is an upfront payment a new operator makes to take over a restaurant site, on top of the rent. In Dubai, sellers often use the term for the price of the whole package: the fit-out, the existing lease, the trade licence and the trading business.

The legal position needs care. Dubai Law No. 26 of 2007 on tenancies recognises advance rent payments and reservation deposits, but does not define key money. In a 2023 legal Q&A, Galadari Advocates says key money or goodwill paid to induce an existing tenant to vacate is prohibited under UAE law as the firm reads it.

In practice, that means the label matters less than what the payment is for. A buyer who pays for identifiable assets (kitchen equipment, fit-out, stock, brand, a trading business with a track record) under a written sale agreement is on much safer ground than one who hands over cash for "the lease". Whatever you agree, have a UAE property lawyer review the agreement before you sign and never pay key money in cash without a receipt and a signed contract.

What does key money usually cover?

Ask the seller for an itemised breakdown. A fair asking price normally bundles some or all of the following:

• Fit-out and equipment: kitchen, extraction, furniture, signage and POS systems, ideally with an asset list and condition report.
• Remaining lease: the years left at the current rent, and any renewal rights. A below-market rent with five years to run is worth far more than a rent that is about to reset.
• Licences and permits: the trade licence and the approvals attached to the site, which you must confirm will survive the sale (see below).
• The trading business: brand, recipes, supplier terms, delivery-platform accounts, social media and the customer database.
• Stock and staff: opening inventory, and the team if you want continuity. Accrued end-of-service gratuity should be priced in.

Anything that is not itemised is something you are paying for without owning.

How much key money do restaurants ask in JBR, Marina, Sheikh Zayed Road and DIFC?

There is no public price list, and asking prices vary widely, so be wary of anyone quoting a flat figure for an area. What moves the price in each location is predictable:

Benchmark any asking price three ways: the replacement cost of the fit-out, a multiple of verified annual net profit, and how the current rent compares with market rent for similar units. If the asking price only makes sense when you assume sales will grow, it is too high. For an independent view, our team can arrange a business valuation in Dubai, and our Businesses for Sale specialists can share current asking prices on restaurants listed in each of these areas.

Can alcohol and shisha licences transfer to a new owner?

Do not assume that either one does. Treat both as approvals the new operator must secure, and write that into the sale agreement as a condition of completion.

Alcohol. Liquor licensing in Dubai has historically been tied to the premises and to a named individual, and venues inside hotels trade under the hotel's licence, according to an Al Tamimi guide (dated 2017, so confirm the current process with the licensing authority). Nothing we reviewed confirms an automatic transfer on a sale. On the cost side, Dubai scrapped its 30% alcohol sales tax and licence fees from 1 January 2023, which has improved the economics of licensed venues, so ask the seller what share of revenue comes from alcohol.

Shisha. Dubai Municipality's technical guideline for smoking area permits ties the permit to the physical site and says it is invalid if the area or nearby locations change. It does not say what happens when the operator changes. The key tests are:

• At least 150 m from residential buildings and from schools and universities, and at least 100 m from mosques.
• Not permitted inside malls. In hotels, only outdoors and only at four-star level or above.
• For indoor shisha, a venue of at least 200 sqm, with its own ventilation and a kitchen fully separated from the smoking area.
• No under-18s, and no shisha delivery.

If the venue does not meet these today, shisha sales may not survive the handover, however well they trade now.

Which Dubai Municipality and food safety approvals change with ownership?

A restaurant needs a Permit for Food Related Activities from Dubai Municipality's Food Safety Department. Each food handler needs a health card, and a certified Person in Charge must be on duty. The same firm reports fines of AED 5,000 to 50,000 for trading without a valid permit.

The published guidance does not set out what happens to the permit on a change of ownership, so confirm it with Dubai Municipality before you sign. In the meantime:

• Ask for the last three inspection reports and any improvement notices.
• Check the outlet's current grade and history on the Dubai Municipality food grading platform.
• Confirm that the trade licence, food permit and Ejari all show the same activity and address.
• For the trade licence itself, a share deal means amending the licence with the Department of Economy and Tourism (DET). An asset deal usually means a new licence in your name. Free zone venues deal with their free zone authority instead.

How do I verify a restaurant's revenue?

Never rely on a sales figure the seller quotes. Ask for evidence from independent sources and make sure they agree with each other:

1. Financial statements: at least two years, plus the VAT returns behind the revenue.
2. Bank statements: reconcile deposits against the accounts, as Meydan Free Zone advises. Cash sales that never reach the bank cannot be relied on.
3. POS reports: daily sales exports by item and by payment type, so you can see seasonality and average spend.
4. Card and delivery-platform settlements: statements from the card acquirer and each delivery app, which are hard to inflate.
5. Supplier invoices and payroll: food cost and staff cost as a share of sales should look normal for the concept. If they do not, revenue or profit is probably overstated.

Also confirm tax and people liabilities. Check VAT and corporate tax filings and any penalties. In a share deal, unpaid wages and accrued end-of-service gratuity stay with the company, so you inherit them. Consider a retention or escrow until tax clearance is confirmed.

Will the landlord approve the lease assignment and on what terms?

Only if you ask and only in writing. Under standard Dubai commercial lease terms, a tenant may not assign or transfer the lease without the landlord's written consent, and subletting without permission is grounds for termination or eviction. That makes landlord consent the single most important condition in the deal.

Before you pay anything, get the following in writing:

• The landlord's consent to the new operator, or to a new lease on agreed terms.
• The remaining term, current rent, escalation clauses and renewal rights.
• Confirmation that there are no rent arrears or disputes, and that the lease is registered on Ejari.
• Any assignment or administration fees the landlord will charge.
• Whether a change of control triggers consent even in a share deal, which depends on the lease wording.

Make completion conditional on all of this. If the landlord refuses or reprices the lease, the value you were paying for may not exist.

Frequently asked questions

Is it cheaper to buy a restaurant in Dubai or open a new one? Buying is usually faster, because the fit-out, lease and customer base already exist, but you pay a premium for that and inherit the site's problems. Compare the asking price with the cost and time of a fresh fit-out and licensing.

Should I buy the company or just the assets? In a share deal, the licence, staff and contracts stay in place but so do all liabilities. In an asset deal, liabilities mostly stay with the seller, but you need a new licence and VAT can apply unless the sale qualifies as a transfer of a going concern. Read our guide to buying a fully operational business for the full comparison.

How long does it take to buy a restaurant in Dubai? A simple share transfer on the mainland can take a few weeks and longer if landlord, licensing or regulator approvals are outstanding. Build the approvals into the contract as conditions.

Can a foreign investor buy a restaurant in Dubai? Generally yes, but ownership rules depend on the legal structure and whether the business is on the mainland or in a free zone. Take advice on structure before you make an offer.

Looking for a restaurant for sale in Dubai?

Our Businesses for Sale team helps buyers find, value and negotiate restaurant acquisitions across Dubai, from the first viewing to lease assignment. Browse restaurants for sale in Dubai or speak to a business broker in Dubai about what you are looking for.

This article is general information, not legal or financial advice. Rules and fees change, so confirm current requirements with the relevant authority and a qualified adviser before you commit.