Dubai economic stimulus package
Dubai Government launched an AED 1.5 billion economic stimulus package for the next three months to support companies and the business sector in Dubai. The package seeks to enhance liquidity and reduce the impact of the current global economic situation.
The stimulus package developed by Dubai Government includes 15 initiatives focused on the commercial sector, retail, external trade, tourism and the energy sector. The package is expected to have a direct and indirect positive impact on all other sectors as well, over the next three months.
- Dubai Government has introduced a freeze on the 2.5% market fees levied on all facilities operating in Dubai.
- The second initiative extends a refund of 20% on the customs fees imposed on imported products. This initiative already started with the notice of number 01 – 2020 by the Dubai Customs on 19 March 2020. Duty refund is valid for custom duty imposed on imported goods and sold locally in UAE markets, which are subject to duty rate of 5% and have been processed under import declaration during the period from 15th March to 30th June.
- The package also includes the cancellation of the AED 50,000 bank guarantee or cash required to undertake customs clearance activity.
- Bank guarantee or cash paid by existing customs clearance companies will be refunded.
- Fees imposed on submitting customs documents of companies will be reduced by 90%.
- Exemption to traditional wooden commercial vessels registered in the country from mooring service fees for arrival and departure, and direct and indirect loading fees at Dubai and Hamriyah Ports.
- Cancellation of 25% down payment required for requesting installment-based payment of government fees for obtaining and renewing licenses.
- Permission to renew commercial licenses without mandatory renewal of lease contracts.
- Reduction of municipality fees imposed on sales at hotels from 7% to 3.5%.
- Exemption from fees charged on companies for postponement and cancellation of tourism and sports events scheduled for 2020.
- Freeze on the fees for classification/rating of hotels.
- Freeze on the fees charged for the sale of tickets, issuance of permits and other government fees related to entertainment and business events.
- Reduction in water and electricity bills by 10%.
- Reduction in deposits paid for water and electricity connections by 10%.
You can refer Dubai Customs initiatives on the above through below link. https://www.dubaicustoms.gov.ae/en/PoliciesAndNotices/Notices/CN1_2020.pdf
Dubai Free Zones economic stimulus package
Dubai Free Zones Council announced an economic stimulus package to complement the Dubai Government’s efforts to overcome the COVID-19 situation. The economic stimulus package, in coordination with the Dubai Free Zones Council, include: Dubai Silicon Oasis Authority, Dubai Airport Free Zone Authority, Jebel Ali Free Zone, Dubai World Trade Centre, Dubai International Financial Centre, Dubai Development Authority, Dubai South, Meydan City Corporation, and Dubai Multi Commodities Centre.
Dubai Free Zones Council’s package contributes to strengthening and supporting Dubai’s businesses by reducing the impact of the spread of COVID-19 on the economic situation. It includes five key elements. They are:
- Postponing rent payments by a period of 6 months.
- Facilitating installments for payments.
- Refunding security deposits and guarantees.
- Cancelling fines for both companies and individuals.
- Permitting temporary contracts that allow the free movement of labour between companies operating in the free zones to continue for the rest of the year.
Further, DIFC proposes implementing five initiatives over the next three months, which centre on enhancing its efforts to support companies during these exceptional circumstances. Initiatives include,
- Waiving annual license fees for new companies during the next three months.
- 10% discount on renewal fees for existing licenses during the same period.
- Companies will enjoy additional facilities, such as the postponing 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 the period from April to June.
Related links – Dubai Free Zones Council launches economic stimulus package
Abu Dhabi economic stimulus package
Abu Dhabi is providing a dynamic economic stimulus package to support economic activity, reduce the costs of living, facilitate business in the emirate and protect the UAE’s economic stability.
The economic stimulus package includes the following initiatives:
- Continuing with all approved capital expenditure and development projects in the emirate, as well as with further measures to preserve Abu Dhabi’s economic gains, prioritising startups and SMEs.
- Formulating plans to stimulate strategic investment sectors and to form a new committee headed by Department of Finance, with members from Department of Economic Development and local banks to review lending options to support local companies.
- Developing investment laws and regulations and ensuring their flexibility to maintain Abu Dhabi’s progressive economic development.
- Allocating AED 5 billion for water and electricity subsidies for citizens and the commercial and industrial sectors, with an intention to reduce the cost of living and support businesses, as well as subsidising electricity connection fees for startups until the end of the year 2020.
- Allocating AED 3 billion to the SME Credit Guarantee Scheme managed by Abu Dhabi Investment Office (ADIO) to stimulate the ability of SMEs to navigate the current market environment.
- Allocating AED 1 billion to financial markets to establish a market maker fund, to enhance liquidity and sustain balance between supply and demand for stock.
- Exempting all commercial and industrial activities from property registration (Tawtheeq) fees levied by the municipality.
- Exempting individual and commercial real estate registration fees for this year.
- Suspending bid bonds and exempting startups from performance guarantees for projects up to AED 50 million.
- Not charging annual vehicle registration fees for commercial vehicles and not levying traffic toll for all vehicles.
- Offering up to 20% rebate on the rental value of the restaurant, tourism and entertainment sectors.
- Suspending tourism and municipality fees for the tourism and entertainment sectors for this year.
- Settling all approved government payables and invoices within 15 working days.
- Waiving all current commercial and industrial penalties.
- Reducing industrial land leasing fees by 25% for new contracts.
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