Taking Over an Existing Café Unit in the UAE: What You Buy

Somebody is leaving a café and you are thinking of stepping into it. On the face of it this is the cheap way in: the fit-out exists, the extraction works, the regulars already walk past, and you skip the eight months a bare shell would have cost you. Sometimes that is exactly what it is. But a handover is not one transaction — it is four or five happening at once, each with a different counterparty, and the person selling has an interest in keeping them blurred together. The lease belongs to a landlord who has not agreed to anything yet. The licence belongs to an authority. The staff have rights that came with them. And the fit-out is being priced by the person who chose it, which is the worst possible valuer.

The lease is the deal, and it isn't yours until the landlord agrees

Everything else in a handover is negotiable or replaceable. The lease is not — and a tenant cannot simply hand it to you. In Dubai the tenancy law is explicit that a tenant may not assign or sublet without the landlord's written approval, and the same principle runs through commercial leasing across the emirates. That approval is a decision the landlord gets to make about you: your licence, your funding, your experience, and whether they would rather take the unit back and re-let it at today's rent. Assume they will want the documents any new tenant supplies, and assume they may refuse. Ask to see the lease itself, not a summary, and read what it says about assignment before you believe anything the outgoing tenant tells you about how straightforward it will be.

Then check the remaining term. A unit with fourteen months left is a different purchase from the same unit with four years, because the rent you renew at is unknown and the landlord holds all of it. Read the renewal and rent-review wording the way our guide to negotiating a café lease in the UAE reads it — as the clause that decides your third year, not a formality. Confirm too that the tenancy is registered and current, because the economic department expects a registered lease behind the address on your trade licence, and a lapsed one can quietly block the licence step you are about to take.

What the licence and the permits actually transfer

There are two paths and they are not the same thing. Either you buy the company that holds the licence — the licence stays put and the shareholding changes underneath it — or you take the premises and put your own licence on the address. Buying the company is faster on paper, and it is also how you inherit everything the company owes: unpaid supplier invoices, a finance agreement on the espresso machine, an open dispute nobody mentioned. A new licence leaves those behind but means going through activity approval and the food permit as a new applicant, on the authority's timetable rather than yours.

Ownership changes on an existing licence go through the economic department of the emirate — DET in Dubai, ADDED in Abu Dhabi, the equivalent elsewhere — and end with an updated licence showing the new structure. That updated licence is the proof; nothing signed between you and the seller is. Treat the municipality or food-safety permit as its own question rather than assuming it rides along: a food permit attaches to an establishment and an operator, and what a change of hands requires differs by emirate and by what you intend to change about the kitchen. Ask the authority directly and get the sequence in writing. Business-setup websites will quote you fees and timescales confidently; those figures contradict each other, and the only one that matters is what your own department tells you today.

The staff on the floor come with the unit

This surprises first-time buyers, and it belongs in the valuation. Where a business changes hands as a going concern, UAE labour law does not treat the team as having resigned and been rehired. Employment contracts generally carry over and service is treated as continuous, which means the gratuity clock keeps running from each person's original start date rather than resetting on your first day. There is also a period after the change during which outgoing and incoming employer can both be pursued for dues that built up beforehand — and a clause in your sale agreement saying otherwise does not bind the employee, because it is not their agreement.

So the accrued end-of-service liability sitting on that team is part of the purchase price whether anyone writes it down or not. Ask for start dates and registered basic salaries for everyone you are inheriting, work out what has already accrued the way our post on end-of-service gratuity sets out, and negotiate with that figure in front of you. Confirm the current position on continuity and on the joint-liability window with MOHRE for your own case — this area has been rewritten in recent years.

Valuing a fit-out that somebody else chose

The seller will present the fit-out at what it cost them. That number is irrelevant to you twice over: it includes choices you would not have made, and it ignores the years since. What the counter and the joinery are worth to you is what it would cost to bring the space to where you want it — usually less than the seller's figure, and occasionally more, because removing somebody's mistake costs more than starting from a shell. Equipment deserves more scepticism still, because nobody volunteers an age. Get serial numbers, ask for service records, and switch everything on yourself rather than taking a walkthrough on trust. Buying used café equipment in the UAE covers what to test and what to refuse; the extra trap here is that the items are presented as one lot, so the dead ice machine hides inside a package price. Price the lot line by line and build the result into a full opening budget rather than treating it as a saving — what it really costs to open a small café is still the framework, you are simply starting a few lines down it.

One more piece usually sits in the price without a name attached: a payment for the position itself, over and above the physical assets. There is no published norm for it, no multiple to check it against, and no register of what comparable units went for. Anyone quoting you one is quoting a feeling. Treat it as the negotiable part, and let the remaining lease term and the trading figures you have actually verified decide what you will put against it.

Tax: raise this before you agree a price, not after

Under UAE VAT law, where a whole business or an independent part of one is transferred to a taxable person who intends to carry on the same kind of business, the transfer is not treated as a supply — so VAT is not charged on it. Whether your deal meets those conditions depends on how it is structured: what is included, who the buyer is, and what they intend to do next. Sell the same café as a box of loose assets and the treatment can differ. That makes it worth an accountant's hour before you shake hands rather than after the contract is drafted, because the structure that gets it right is chosen at the start. Have them confirm the position against the FTA's own published guidance, and have them check the seller's VAT and corporate tax filings are current while they are there — if you are buying the company rather than the address, you are buying its filing history too. If VAT is unfamiliar ground, common VAT mistakes UAE restaurants make covers what you will be taking on from day one.

The checks to make before any money moves

Most of what goes wrong in a handover is not fraud. It is a seller answering the question they were asked instead of the one that mattered. The fix is to ask for the artefact rather than the assurance.

Trading figures deserve one extra note. A report exported from a system the seller controls tells you what that system was asked to show; a VAT return is a number they have already declared to somebody who can audit it. Where the two disagree, believe the return — and ask why before you decide what the café earns.

Where MidaOne fits

MidaOne is not part of your due diligence, and be sceptical of any system that claims to be. Where it matters is the day after. Taking over an existing unit means inheriting somebody else's menu, prices, stock and staff logins, and the first month is when you find out which of those you actually want. Your own system — your menu, your cost prices, permissions scoped to the people you are keeping — draws a clean line between their trading and yours, which is what you need while you work out whether the numbers you were shown are holding up. Sales by item, by hour and by employee from your own first week are worth more than any figure in the handover file, and stock counted from your opening count onwards is the only stock figure you can trust. It is AED 200 a month, flat, every feature and unlimited devices included.

Frequently asked questions

The cafés that change hands well are the ones where the buyer treated the seller's story as a hypothesis. Nothing here has to be taken on trust — the consent can be written down, the returns can be read, the machines can be switched on, the start dates can be listed. Each of those is a phone call the seller would rather you skipped, because you are keen and the unit is nice. Make the calls anyway. The unit will still be there next week, and if it is not, it was never the opportunity you were told it was.