UAE Government Measures In Dealing With Economic Loss In Pandemic
In a bid to save and revive the economy, UAE Federal Government introduced “Targeted Economic Support Scheme”, on 15th March 2020. This scheme will provide temporary relief in respect of outstanding loans for all private sector companies affected by COVID-19, and includes an AED 50 billion funds distributed through 0% interest collateralized loans for banks operating in the UAE. In addition, AED 50 billion has been released from banks’ capital buffers to encourage further lending to private sector businesses in need of credit during this time.
The scheme was directed at retail, SMEs in particular, and the most impacted sectors within the corporate world as well. And whether you are a personal loan or a mortgage loan owner or an SME or a corporate, you are benefiting from these schemes. This was a move to protect the economy, and buffering banks and businesses with an economic support scheme. This took the form of collateralized loans to banks at zero cost in order to encourage lending.
In addition, Abu Dhabi has also allocated AED 3 billion to the SME credit guarantee scheme managed by the Abu Dhabi Investment Office in order to stimulate financing by local banks and enable SMEs to navigate the current market environment. Bid bonds have been suspended and an exemption introduced for start-ups from performance guarantees for projects up to AED 50 million. Finally, Abu Dhabi has allocated AED 1 billion to establish a market maker fund. The fund is charged with enhancing liquidity and maintaining the balance between supply and demand for stocks.
Other Federal Government Measures taken by government Rate reductions and exemptions in various business activities for companies which also includes Property costs where tenants struggling to pay their rent during the COVID-19 pandemic are exempt from eviction.
In Dubai
- In which market fees of 2.5% will be freeze for all facilities operating in Dubai for three months
- Cancellation of the AED 50,000 bank guarantee or cash requirement in order to undertake customs clearance activities
- Reduced “municipality fees” imposed on sales at hotels from 7% to 3.5%
- A reduction of fees on submission of customs documents
- Reduction in water and electricity bills, including residential and commercial bills, for 3 months
In Abu Dhabi
- Reduced industrial land leasing fees on new contracts
- Rebate on rental values for restaurants, tourism and entertainment sectors of up to 20%
- Exemption on commercial vehicles from annual registration fees, road toll tariffs & Tawtheeq fees on all commercial and industrial activities till end of 2020
In FreeZone
ADGM
- 100% waiver on Commercial License renewal fees, Business Activity renewal fees, Data Protection renewal fees, new Temporary Work Permit issuances, renewal and late application fees till 25 March 2021
- FSRA-regulated entities will have 100% refund on fees already paid and 50% refund on supervision fees
DIFC
The DIFC waived annual license fees for new companies until the end of Q2 2020, and given a 10% discount on renewal fees for existing licenses during the same period. Moreover, companies will get the postponement of payment plans for all commercial properties owned by DIFC Investments for a period of 6 months. DIFC will reduce its ownership transfer fees from 5% to 4% for any property sale that occurs within a 3-month period, if ownership transfers are registered at the DIFC within 30 days after the end of the 3-month period.
DMCC
The DMCC has reduced its registration fees by 50% for new companies, while current companies will receive 30% discounts on renewal and amendment fees.
JAFZA
JAFZA has announced it will waive fines on expired trade licenses, and waive the first year license fees for any new companies.
Many other jurisdictions have announced their own support schemes to help businesses & individuals to survive the pandemic.
This blog is written by Ms. Heena Arora, Partner Relation Executive at Flyingcolour Business Setup, VAT and Accounting Services, Dubai. If you have any query regarding setting up business anywhere across the UAE then please contact us at +971 4 4542366 or email us at info[at]flyingcolour[dot]com.
