London Restaurants Expand Gulf Operations

James Robson has signed a new deal to open a branch of his St James's Market restaurant in the Gulf. The co-owner of Fallow describes the move as a response to a tax tsunami in the United Kingdom. He argues that the region offers a stronger work ethic and a more supportive environment for business growth.

Fallow is one of London's most talked-about dining spots. The venue serves roughly 1,000 guests daily and gained a large following on social media. Its menu features distinctive dishes, including a whole cod's head served with a spicy butter sauce. The restaurant currently has 650,000 followers on Instagram, which helped drive its popularity.

Robson is not the only operator making the leap. Several other well-known London establishments have already established a presence in the area. Scott's of Mayfair, a spot often associated with celebrity culture, has opened in Dubai. So have Gymkhana, an Indian restaurant with two Michelin stars, and Park Chinois, a high-end Chinese venue. Bread Ahead, a bakery from Borough Market, and Isabel's, a Mayfair institution favored by politicians, have also expanded into the region, with the latter opening in Abu Dhabi.

These openings are proceeding despite recent conflict in the Middle East. The US-Israeli war in Iran earlier this year led to bombardment of Dubai and a temporary exodus of expatriates. Some local restaurants are still feeling the effects. Dinner by Heston has been closed since the war's fallout. The Michelin guide also faced criticism in October for listing 16 restaurants that are now shut. The guide noted that some inspections occurred before the conflict began.

Robson is currently based in Hong Kong while he scouts opportunities in Asia. He identifies East Asia, the United States, and the Gulf as his main targets for growth. He believes America champions business, while the Gulf actively assists enterprises. He also praised East Asia for its work ethic and tax system, which he feels puts the UK to shame.

The core of the financial argument centers on Value Added Tax. The UK rate for hospitality is 20 percent, which is among the highest in Europe. The average rate for restaurants in the region is about 12 percent. Italy charges only 10 percent on food sold in restaurants. Chefs are asking Chancellor Andy Burnham to lower the rate in next week's budget. Robson said the country has sleepwalked into multiple anti-growth taxations. He also pointed to the 25 percent corporation tax and dividend tax rates of 40 percent or more.

Michelin-starred chef Jason Atherton now spends a third of his time at his Dubai restaurant. He says it is easier to make a profit there than in London. Robson stated he does not resent paying UK taxes and is proud to contribute to the national deficit. However, he believes the balance of risk and reward in the UK is no longer sensible. As a result, he is playing it safe domestically and focusing his expansion efforts overseas.

Human rights groups are urging caution as these brands expand. Felix Jakens, director of campaigns at Amnesty International UK, noted that the UAE has a poor record on workers' rights. He warned that heavy spending on the country's UK image, such as through Manchester City, should not distract from how labor is treated. Migrant workers, who make up the majority of the population, are tied to employers through a sponsorship system. They lack the right to form trade unions. Jakens said any UK business expanding there must carry out proper human rights due diligence to ensure kitchen staff are treated fairly and can raise concerns without fear of losing their jobs or visas.