A Guide To The Relief And Stimulus Measures Offered For Businesses In Dubai Amid The COVID-19 Crisis
Grow Your Business, Not Your Inbox
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
Given the economic slowdown caused by the COVID-19 pandemic, businesses in Dubai have been subjected to a variety of relief measures and stimulus packages from both government and commercial entities in the Emirate and the UAE to help them during this crisis--scroll down this post for more details on each of them.
H.H. Sheikh Hamdan releases an AED1.5 billion economic stimulus package
At the very outset of the COVID-19 crisis in the UAE in mid-March 2020, H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, released a AED1.5 billion economic stimulus package for businesses for the following three months. Developed by Dubai Government, the stimulus package includes 15 initiatives focused on the commercial sector, retail, external trade, tourism, and the energy sector. These include:
- Nine initiatives for the commercial and business sector, which include a freeze on the 2.5% market fees levied on all facilities operating in Dubai; a refund of 20% on the custom fees imposed on imported products sold locally in Dubai markets; the cancellation of the AED50,000 bank guarantee or cash required to undertake customs clearance activity while bank guarantee or cash paid by existing customs clearance companies will be refunded. Furthermore, fees imposed on submitting customs documents of companies will be reduced by 90%. With regards to measures for boosting external trade, the requirement for providing a banking instrument while submitting customs-related grievances has been cancelled. In addition, traditional wooden commercial vessels registered in the country will be exempted from mooring service fees for arrival and departure, as well as direct and indirect loading fees at Dubai Harbour and Hamriyah Port.
Local commerce will benefit from the cancelation of the 25% down payment required for requesting installment-based payment of government fees for obtaining and renewing licenses. The move seeks to reduce the financial burden on SMEs. In addition, commercial licenses can be renewed without mandatory renewal of lease contracts in a move aimed at stimulating business activity and easing government-related procedures. In addition, companies will be exempted from permits for new sales and offers.
- Four initiatives for the tourism sector, including the reduction of municipality fees imposed on sales at hotels from 7% to 3.5%. The second initiative exempts companies from fees charged for postponement and cancellation of tourism and sports events scheduled for the year 2020. The third initiative freezes fees for the rating of hotels. The fourth initiative freezes the fees charged for the sale of tickets, issuance of permits and other government fees related to entertainment and business events.
- Two other initiatives that seek to reduce the cost of living and doing business for citizens, expatriate residents and the business community through 10% reduction in water and electricity bills including those charged in the residential, commercial and industrial sector, for a period of three months. The second initiative reduces deposit paid for water and electricity connections by 50%.
For more information, click here.
UAE Central Bank Increases Its Economic Stimulus Package To AED256 billion (US$70bn)
The aggregate value of all capital and liquidity measures adopted by the UAE Central Bank since March 14, 2020, has increased to AED256 billion, and consists of AED50 billion in capital buffer relief, AED50 billion in zero-cost funding support, AED95 billion in liquidity buffer relief and a AED61 billion reduction of cash reserve requirements.
Update: Most recently, the UAE Central Bank has cut the reserve requirements for bank demand deposits from 14% to 7% and increased its economic stimulus package to AED256 billion (US$70bn) to mitigate the impact of the coronavirus outbreak on the country. It also extended the duration of the Targeted Economic Support Scheme for affected retail and corporate customers, allowing banks and finance companies to defer the principal amount of loans and interest until the end of this year. Furthermore, the regulator also granted an extension of the capital buffer relief to the end of 2021 and allowed an extension of the zero-cost funding facility until December 31, 2020. Lenders in the Tess programme can use a third of their current regulatory liquidity buffers. The overall release of regulatory liquidity buffers is estimated at AED95 billion. The planned enforcement of certain Basel III capital standards will also be postponed until March 31, 2021 for all banks to reduce the operational burden on the financial industry. A guidance for banks and finance companies on the application of the IFRS 9 financial reporting standard was also issued in collaboration with the regulatory authorities of financial free zones – the Financial Services Regulatory Authority of the Abu Dhabi Global Market and the Dubai Financial Services Authority of the Dubai International Financial Centre.
Previous measures: The Central Bank of the UAE, CBUAE, has launched an AED100 billion comprehensive targeted economic support scheme for retail and corporate customers affected by COVID-19. The scheme consists of AED50 billion from the CBUAE funds through collateralized loans at zero cost to all banks operating in the UAE and of AED 50 billion funds freed up from banks’ capital buffers.
The purpose of the targeted scheme is to facilitate provision of temporary relief from the payments of principal and interest on outstanding loans for all affected private sector companies and retail customers in the UAE. Participating banks should use the funding to grant temporary relief to private sector corporate customers and retail clients for a period of up to six months.
All banks will be allowed to tap into a maximum of 60% of the capital conservation buffer, and, additionally, banks designated as systemically important by the CBUAE will be able to use 100% of their additional capital buffer for systemic importance.
The CBUAE is also reducing the amount of capital banks have to hold for their loans to SMEs by 15% to 25%.
To ease its macro-prudential stance, the CBUAE will increase the loan-to-value, LTV, ratios applicable to mortgage loans for first-time home buyers by 5% points. This will contribute to the affordability of housing without unduly increasing inherent risks. The CBUAE will also revise the existing limit which sets maximum exposure that banks can have to the real estate sector. When the exposure reaches 20% of the banks’ loan portfolio (measured by risk-weighted assets), banks will be allowed to increase it to 30%, but will be required to hold more capital.
Furthermore, the CBUAE will adopt new regulations with the objective to reduce fees incurred by merchants when their customers pay by debit or credit cards. The CBUAE will also issue new regulations which will limit fees banks charge to their SME customers, and stipulate that banks cannot require a larger minimum account balance that AED 10,000.
Additionally, the CBUAE will mandate all banks to open accounts for SME customers within a maximum time frame of two days, provided acceptable documentation is in place and that the risk is acceptable in view of the AML and CTF obligations.
The CBUAE will issue guidelines on margin calls, requesting banks to always request additional collateral within a reasonable time, before liquidating the pledged stocks in a situation of market downfall. This would reduce excessive market volatility and provide investors with increased flexibility to act in their best interest.
Lastly, from March 15, 2020, and for a period of six months, the CBUAE has waived all fees which it charges for the payment services provided to banks operating in the UAE through its payment and settlement systems.
For more information, click here.
Dubai banks offers business relief package for customers
A number of Dubai banks are offering a relief package to help ease the financial hurdles amidst the current COVID-19 crisis. In light of supporting the business sectors in the UAE and Dubai, the measures follow the initiative of the UAE government and UAE Central Bank six-month economic stimulus package and the Dubai government three-month economic stimulus package. Emirates NBD, Dubai Islamic Bank, Emirates Islamic, Mashreq and Commercial Bank of Dubai are some of the banks that have joined the effort. Taking into effect from April 1, 2020, to June 30, 2020, there are various offers for different types of customers, including small business customers, business banking customers and trading clients, among others. More details on the offers can be found here.
RAKBANK takes measures to support SMEs
The National Bank of Ras Al Khaimah (RAKBANK) is offering financial relief to SMEs and corporates impacted by the effects of the COVID-19 crisis. SMEs are encouraged to shift their business online and discuss options for financial relief. For businesses that offer essential services, such as delivery of medicines and groceries, RAKBANK Simplify platform’s monthly fee will be waived off for the next three months. More details can be found here.
UAE Cabinet approves reduction on water and electricity bills of businesses
In a move to support businesses affected by the pandemic, the UAE Cabinet has approved the decision to reduce the water and electricity bill of shopping malls, commercial shops, hotels, hotel apartments and plants, by 20% for the duration of three months, starting from April 2020. They will also benefit from six months payment deferral of water and electricity connection’s installments, and three months freeze of service reconnection fines, varying from AED3,000 to AED5,000. More details can be found here.
Dubai Chamber supports its members with the issuance of ATA Carnet and attestation
In cooperation with UPS, Dubai Chamber has launched a free service to collect, process and deliver documents for the issuance of ATA Carnet for temporary admission of goods and attestation, starting from March 26, 2020. Dubai Chamber members can contact the company for the pick-up of their documents from their homes or offices. More details about the package here.
Dubai Multi Commodities Centre (DMCC) releases a support package for businesses
DMCC has rolled out a business support package to support its 17,000 members, which will be applicable as of April 1, 2020, until June 30, 2020.
The measures include a 100% waiver for late licence renewal penalties, 100% waiver for all Flexi Desk and DMCC Business Centre penalties until the end of 2020, 100% waiver of the Office Sharing Permit fee, 100% waiver of the Company Reinstatement fees, 30% discount on licence renewal, waiver of outdoor area rents for JLT retailers with existing contracts where DMCC is the building owner/landlord, waiver of rent for two months for commercial establishments impacted by the latest Dubai Economy directive requiring a temporary closure where DMCC is the building owner/landlord, and a three-month suspension of rent for Flexi Desk and DMCC Business Centre tenants renewals or monthly/quarterly instalments with no discount.
Incentives for new registrations, and companies already in the process of registering at DMCC include an 80% reduction on the total company set-up fee if shareholders are residents of JLT, up to 50% reduction on the total company set-up fee along with a Flexi Desk for one year, flexible payment options for new DMCC Business Centre tenants and a complete digital process for business set-up from the comfort of their home.
For more information, please check here.
UAE Cabinet introduces measures to support suppliers to government
The Federal Cabinet approved a slew of measures to support services suppliers to the federal government entities, which include fast tracking payments owed to suppliers within 15 days from the date of issuance of the resolution, exempting suppliers affected by the COVID-19 crisis from fines for delays in regards to the execution of federal government contracts for a renewable three months, and awarding 90% of federal government purchases to SMEs. Read about all the other measures adopted by the Cabinet here.
DIFC introduces fiscal easing initiatives to support businesses amid COVID-19
Dubai International Financial Centre (DIFC) has introduced a series of fiscal easing initiatives from April 1, to June 30, 2020, which include five initiatives introduced on a conditional basis that will offer businesses the opportunity to benefit from a waiver of annual licensing fees on new registrations during the next three months. Businesses can also take advantage of a 10% of renewal fees for existing license holders in the DIFC for entities due to renew their licenses.
DIFC will also allow deferred payments for all properties owned by DIFC Investments Ltd for a period up to six months from April 1, 2020. A reduction on property transfer fees in the DIFC from 5% to 4% will also be applied to any transfer of property (or any part thereof) that takes place within the three-month period. DIFC will also facilitate the free movement of labour in and out of the centre between other free zones, provided employers have the necessary secondment arrangements in place and employees are recorded with registry services to secure a secondment card in order to access buildings and offices within the DIFC.
For more information find here.
UAE Securities and Commodities Authority provides regulatory relief
The UAE’s Securities and Commodities Authority (SCA) has provided listed companies with an additional 45 days to file their financial statements of the FY 2019 and Q1 of 2020. To address potential compliance issues stemming from the impact of the coronavirus on investors and capital markets, the SCA has issued a circular informing traders that they have been graced with additional 45 days so that they can report their disclosure statements no later than 14/5/2020 and 30/6/2020 for the FY 2019 and Q1-2020, respectively. More details on SCA’s relief measures can be found here.
UAE Ministry Of Economy reduces service fees for individuals and businesses
The UAE Ministry of Economy has reduced fees associated with 94 services provided to individuals and the business sector. The financial impact on the business sector as a result of this reduction is estimated to be valued at AED113 million in 2020.
The new measure is aimed particularly at fees related to innovation, business activities, investment, production, trade, import and export activities, as well as commercial registration services, commercial agencies, trademarks, origin, and auditors and intellectual properties.
Services receiving 25% discounts include the collective management licence fees; applications for registering a trademark or trademarks of goods, products or services related to a single category; and publishing official documents for joint stock companies or partnership companies on shares basis, among other services. 50% discounts apply to some of the ministry's services as well, including 'To Whom Concerned' certificates for auditors; ratification of partnership contracts; renewing the registration of branches of national companies in an auditors schedule, and 'Origin Certificates' for national products (plus the amount of the invoice) among others. Most notable are the 95% reduction in fees for the licence to utilize the 'Made in UAE' mark and the 98% reduction in renewal fees for said licence. For more information, click here.
Dubai Land Department, through its Real Estate Regulatory Agency, launches "Together" CSR initiative
Dubai Land Department (DLD), through its Real Estate Regulatory Agency (RERA), announced the launch of a new CSR initiative called "Together," in cooperation with a number of jointly owned property (JOP) management companies in Dubai. This initiative will see RERA and its partners will provide necessary supplies free of charge to those in need and affected in many projects and freehold areas across the Emirate. The parties supporting the initiative have also announced other steps and procedures to support this effort, including the cancellation of fines for 2019 and 2020, the provision of flexible instalment service for service fees, the reduction of service costs, and the provision of a flexible payment option for air conditioning services.
DIFC announces three months of free rent for its retailers
Dubai International Financial Centre (DIFC) has implemented a new support package for its business partners based at DIFC-owned assets giving them a three-month rent-free period on their base rent, providing businesses with added flexibility and financial relief. From April to June 2020, retailers of all types based in Gate Avenue, Gate Village and Gate District will not be required to pay basic rent. For more information, click here.
DP World implements measures to ensure safety of its people and secure flow of essential trade
DP World, UAE Region has implemented a rapid, resolute action plan to secure the health and safety of its people and its services across all its business, logistics and supply chain assets to keep essential trade flowing in the midst of the global pandemic. The comprehensive and inclusive measures are being rigorously applied in close consultation with ports and health authorities to contain and prevent the spread of the coronavirus (COVID-19) infection.
Many Port and Free Zone operations, such as remotely operated quay cranes and automated gantry cranes and gates, are inherently resilient thanks to their investment in technology. At the flagship hub of Jebel Ali Port and Jebel Ali Free Zone (Jafza) the focus is on securing the integrity and efficiency of the movement of vital supplies like food items, medicine and medical equipment required by the UAE and Dubai Health Authority (DHA) to contain the infection. DP World, UAE Region teams are now working on improving the operational resilience further with a slew of initiatives like segregating workforces, increasing cleaning and disinfection, providing transportation to get employees to work through lockdowns, and arranging accommodation for employees near their place of work.
As the region’s busiest trade enabler, DP World, UAE Region has ensured continuity of services by encouraging most of its employees to Work From Home, and installed thermal cameras at all operational buildings, entrances and gates to identify the body temperatures of individuals to facilitate the isolation of suspected COVID-19 cases.
Dubai Silicon Oasis Authority launches incentives, exemption packages for business partners, residents
Update: Adding to the previous relief packages implemented by Dubai Silicon Oasis (DSO), the new DSO exemptions and incentives package includes waiving both a AED12,000 license fee and AED6,900 registration package for new clients for the first year until end of June 2020- the new client registration package includes a one-time registration fee, shareholder resolution fee, specimen signature fee, trade name reservation fee, memorandum of articles and association. Under these packages, DSOA will also provide a one-month grace period for new companies.
Dubai Silicon Oasis Authority (DSOA), the regulatory body for Dubai Silicon Oasis (DSO), today announced exemptions, incentives, and flexible payment plans for companies, commercial tenants, and residents occupying buildings owned by the Authority.
As part of the package of incentives, DSOA is offering rent waivers to the retail sector affected by the closure including restaurants, shops, and gyms at Dubai Silicon Oasis Authority owned buildings, commencing from March 15, 2020 and ending once the government allows retail outlets to reopen. In addition, they are exempt from late payment fines until August 31. Likewise, multiple business partners and tenants are to also benefit from a waiver on all late payment fines until August 31.
The retail sector at DSO will also receive discounts of up to 10% of the rental value upon renewal, and an additional 5% discount on the annual rent, if paid on time and in one instalment. Marketing fees, likewise, are to be reduced by 25%, and deferred for up to three months. Retail business owners can also choose to pay outstanding fees in installments, and leverage their visa security deposits to pay off their financial dues to DSOA.
DSOA has also approved a package of incentive measures for startups based at Dubai Technology Entrepreneur Campus (Dtec), the largest tech hub and coworking space in the MENA region, wholly owned by DSOA, including a waiver of all late payment and overstay fines until August 31, 2020. Dtec is providing entrepreneurs the opportunity to benefit from deferred rent payments for up to three months, and a 5% discount on their annual rent, if paid on time and in one deposit. In addition, on renewal of their tenancy contracts, flexi desk and fixed desk tenants can enjoy the option of paying their rents in up to six installments, in addition to leveraging their visa security deposits to pay off their financial dues to DSOA.
DSOA has also approved a flexible payment scheme for companies operating from its buildings. Companies can postpone rent payments for the next three months, commencing April 2020. Service charges are also being waived from March 15 until further notice, and payments can be spread, based on discussions with DSOA’s Finance Department, over a period of six months following the expiry of the postponement date. DSOA is waiving cheque retrieval fees and pardoning first offenders’ bounced check fees, thereby facilitating easy monthly payments in accordance with its terms and conditions. In addition, DSOA is issuing a waiver on all late payment fees until August 31, 2020, and granting a 5% discount on the annual rent, if paid on time and in one deposit. The Authority is further enabling customers to use their visa security deposits to pay off their rental financial dues.
New companies establishing their offices in DSO for the first time can also benefit from a set of incentives. During the exemption period, DSOA is offering new companies a grace period on monthly rent payments until end of May 2020, and a discount of up to 10% on the monthly rent. Furthermore, the Authority is waiving the service charge until the government allows companies to continue working from their offices.
Existing residential tenants at Dubai Silicon Oasis now have the option of paying their rents monthly and a new rental structure has also been activated. DSOA is to defer all new and existing lease payments for up to two months and provide flexible payment plans for the remainder of the lease duration. The Authority is to waive cheque retrieval fees on bounced checks for first offenders. Residential villa tenants can benefit from a discount of AED5,000, while other residential tenants receive a discount of AED2,000, if they pay the annual rent as one deposit.
Dubai World Trade Centre Authority reveals relief measures to aid financial stability of businesses
The Dubai World Trade Centre Authority announced a series of measures to ensure economic and financial stability. The authority will not charge organizers with cancellation fees or late payment fees, and will allow them to carry forward paid fees as credit to 2021. For exhibitors, the DWTCA will issue a full refund on cancelled events. It will also offer a three-month rent deferent plan for commercial tenants from April-June 2020, while retail tenants has a rent-free period for up to six months. For free zone businesses, there's a 70% rebate on all category specific business registrations and licenses, and a 50% annual rebate on general trade licenses. More details here.
DAFZA launches incentive packages for companies operating in the free zone
The Dubai Airport Freezone Authority (DAFZA) has launched a set of economic incentive packages for companies based in the freezone. The initiative includes postponing lease payments for up to three months and facilitating the payments into easier monthly instalments. DAFZA will cancel companies' fines, refund the security deposits on the leased spaces and labour guarantees to companies, as well exemption for new companies on registration and licensing fees.
DAFZA has also taken a set of preventive measures to limit the spread of the coronavirus within the free zone. A committee for emergency and crises has been formed and is working around the clock to monitor and follow up the operations of the free zone during this difficult period. The committee’s role is to ensure also that all instructions and directives issued by the Ministry of Health and Prevention and other authorities are applied in the free zone. The free zone has implemented a 100% remote work system within the authority’s buildings based on electronic and smart applications and advanced technical infrastructure that the country and the free zone provides.
Dubai Economy reduces fee for instant licenses to AED250
During the first quarter of 2020, the Business Registration and Licensing arm of Dubai's Department of Economic Developed had issued 50 instant licenses to businesses. In light of the coronavirus epidemic, Dubai Economy has reduced the fee for instant licences by over 90%, from AED3,000 to AED250. For existing license holders, the new fee will apply at the time of renewals.
Dubai South Free Zone's incentives for businesses affected by COVID-19
Dubai South Free Zone will offer individuals and companies in its free zone flexible payment plans with easy instalment schemes as well as waivers of penalties on late renewals and cancellations of contracts and licenses. Customers will also benefit from a 20% reduction on licence fees renewals, while first year license fees for new customers in the aviation, logistics and e-commerce sectors and the Business Park will be waived. In addition, customers who operate in the Business Park Free Zone will have the opportunity to apply for a lease deferral request of up to six months, which will be granted on a case-by-case basis. Meanwhile, Dubai South Business Centre customers renewing their contracts between now and October 2020 will receive a reduction of up to 25% on their renewal fees as well as the flexibility to settle annual rental fees in up to four installments. Furthermore, individuals and companies looking to establish a new business will be granted rental fee reductions of up to 25%. For more information contact the Dubai South team here.
Dubai SME allocates AED20 million for capital guarantee scheme launched by The Mohammed Bin Rashid Fund in partnership with Beehive
Dubai SME, the agency of Dubai Economy mandated to develop the small and medium enterprise (SME) sector, has allocated AED20 million for the capital guarantee scheme launched by its financial arm, The Mohammed Bin Rashid Fund (The Fund), in partnership with Beehive, the first regulated peer-to-peer (P2P) lending platform in the Middle East & North Africa (MENA) region. The guarantee pool will enable more SMEs and investors to leverage financial technology to support business continuity and growth while also stimulating economic growth.
The Fund and Beehive recently renewed and updated their existing partnership by broadening the channels of eligibility for SMEs to access financing, and for investors to reap attractive returns by participating in entrepreneurial startups. The original agreement had enabled Dubai-based SMEs that are 100% owned and managed by an Emirati to request financing of up to AED780,000, backed by a full capital guarantee extended by The Fund from a total guarantee pool of AED20 million. In a significant update to the agreement, Dubai-based SMEs that are 50% or more owned and managed by an Emirati are now also eligible for financing of up to AED420,000, which will be backed by a 50% capital guarantee. This update allows businesses eligible for new financing to get a three-months payment holiday at the beginning of their loan term, which will be followed by a 24-months payment schedule. The loan guarantee scheme will allow eligible SMEs to access funding at lower rates and give protection to investors that support these businesses. This is expected to be critical for Dubai’s SMEs that are currently facing a cash crunch and will allow them to continue their operations and paying their bills. The total guarantee pool of AED20 million will ensure this financial tool can be utilized by many eligible SMEs. For more details, please contact Beehive on email@example.com.
Dubai Culture and LinkedIn To Help The Creative Community Amidst The COVID-19 Outbreak
Dubai Culture and LinkedIn have signed a memorandum of understanding to establish cooperation in three main areas (creating an educational program to provide training and learning opportunities for creative professionals, fostering connections and networking to establish a global cultural network from Dubai, and developing data and insights for future studies and research).
Furthermore, Dubai Culture will provide learning licenses to the creative and arts industry that enable UAE-based professionals to gain access to courses in two main domains: business management and specialized skill development courses in the fields of photography, graphic design, game design, art, product design, fashion and more.
UAE Cabinet To Reduce Burdens On Owners Of Hajj And Umrah Operators
The UAE Cabinet adopted several decisions to support various national sectors in minimizing the effects of the COVID-19, pandemic, including a decision to exempt Hajj and Umrah-related businesses from license renewal fees from March 2020 to December 2020. The General Authority of Islamic Affairs and Endowments will extend the validity of expired licenses until this period.
Dubai SME's Hamdan Innovation Incubator Gives Free Rent, Cuts Fees
Dubai SME's Hamdan Innovation Incubator (Hi2) has postponed the collection of rents for three months and cut fees by up to 20% for its private office package for its 75 incubated businesses. For more information, please contact the Dubai SME team here.
Dubai SME's Mohammed Bin Rashid Fund for SME Releases A New Support
Mohammed Bin Rashid Fund for SME, the financial arm of Dubai SME, has offered loans to support business continuity of projects benefiting from it as well as a three-month grace period for loan repayments. The Fund will offer zero-interest financing to Dubai SME members struggling to meet obligations relating to operational expenses, such as salaries and rents, in addition to online financial consultancy for entrepreneurial projects. For more information, please contact the Dubai SME team here.
Dubai's JAFZA Announces Robust Incentives To Help Companies Get Back To Business
Jebel Ali Free Zone (Jafza) has introduced a range of incentives to support its customers and new companies to resume their activities with renewed confidence in the post-COVID-19 environment. In line with the emerging market dynamics, Jafza now offers on-demand warehouses on short-term lease with multi-functional storage options, competitive rates, and no VAT or customs duties. Companies can now take on lease Jafza warehouses from 300 sq. m. to 15,000 sq. m. in size, with free water and electricity as a bonus.
The support offered by JAFZA includes easier rental terms like monthly rentals and deferred rental payments, cost-effective transport services that save costs, enhance ease of accessibility and enable speedier services. In-house logistics solutions such as clearing and document processing services, 24/7 lease issuance, fast-track EHS approvals are tailored to assist companies manage their supply chain costs while facilitating trade and efficient movement of goods.
These incentives come on the back of the 70% reduction in registration, licensing, and administrative fees announced before the pandemic lockdown began in mid-March.
DMCC Introduces New Cost Reductions Measures For Its Members
Dubai Multi Commodities Centre (DMCC) has expanded and extended its business support package which will run until 31 August 2020. New support measures, applicable to DMCC’s existing member companies, include:
- 33% discount on 3-year licence renewal (or 1 year for free)
- 25% discount on 2-year licence renewal (or 6 months for free)
- 20% discount on 1-year licence renewal
- 30% discount on additional licence
- 100% waiver on change of address fee for relocating from physical office to DMCC Business Centre
- 100% waiver of the office sharing permit fee
- 100% waiver of late renewal penalties for expired licences
- 100% waiver of late renewal penalties for expired leases
- 50% on license reinstatement fees if the company license was terminated by an authority due to non-license renewal
- 50% discount on dormancy fees
- 2 months’ rent holiday for Flexi Desk and DMCC Business Centre tenants or monthly/quarterly instalments with no discount
In addition, DMCC has partnered with Emirates NBD to offer new and existing member companies cardholders to convert payments into flexible and interest-free instalments. More information can be found here: dmcc.ae/member-support-package.
Dubai Developments Group Offers Rental Relief To Its Businesses
Dubai Developments Group has extended rental relief to SMEs for periods ranging from three to six months as per directives H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance. The measures are a part of a relief package worth AED200 million that will benefit 1,500 business enterprises, contributing to the financial stability of their employees, numbering over 10,000.
For more information, please visit their website here.
H.H. Sheikh Hamdan releases the third AED1.5 billion economic stimulus package
The recently launched third stimulus package to ease the impact of the COVID-19 crisis on businesses in Dubai raises the value of business incentives introduced by the emirate’s government in the past few months to AED6.3 billion.
Launched under the directives of Vice President and Prime Minister of the UAE and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, the AED1.5 billion new package includes the following:
- In the healthcare sector, the government has taken steps to ensure its payments to private hospitals are expedited.
- In the tourism and entertainment sector, an initiative to refund hotel establishments and restaurants 50% of the 7% municipality fees charged on sales will be extended for the period from July to December 2020. In addition, the ‘Tourism Dirham Fee’ has been halved until the end of the year.
- In the international trade sector, fines for some customs cases will be reduced by 80%, with the option to pay them in instalments, to help traders meet their financial obligations and boost business continuity.
- In the construction sector, payment of financial dues to contractors will be expedited and all financial guarantees for construction activities related to commercial licences will be refunded. This will be replaced by another system that guarantees all the rights of the contracting parties.
- In the education sector, private schools will be exempted from commercial and educational license renewal fees until the end of the year.
- The temporary entry permits obtained by art exhibitions for artworks loaned from institutions outside Dubai will be extended until the end of 2020. These include artworks that have entered Dubai in the fourth quarter of 2019 and have since remained in the emirate.
The current stimulus package extends the validity of some of the initiatives announced in the first stimulus package for an additional three months until the end of September 2020 as part of support extended to the private sector in recovering from the crisis. These include the freeze on the 2.5% market fee, cancellation of all fines charged for late payment of government service fees (such as accumulated fines charged for delays in renewing business licenses). Payment of penalties will not be required to renew commercial licenses during this period. Furthermore, commercial licenses can be renewed without the mandatory renewal of lease contracts. The 25% down payment requirement for paying government fees in instalments will also be cancelled. In addition, businesses are exempted from fees for sales and special offers. In the international trade sector, exemptions for traditional commercial vessels registered locally in the UAE from docking fees at Dubai Port and Hamriya Port, including direct and indirect loading fees, will be extended. The AED50,000 bank or cash guarantee required to conduct customs clearance activity will continue to be waived, and bank and cash guarantees paid by customs clearance companies will be refunded. Also, the fees on customs documents will continue to be reduced from AED50 to AED5 for each transaction, and processing of customs complaints will be accelerated. In the tourism, entertainment and events sector, the freeze on fees charged for hotel rating, ticket sales, issuing permits and other government fees related to entertainment and business events has been extended. For more information, click here.
Related: Dubai Chamber President And CEO H.E. Hamad Buamim's Message For Dubai's Business Community Amid The COVID-19 Crisis