Financial stimulus for businesses by UAE Govt to combat Covid-19 impact
During these difficult times, the UAE authorities are leaving no stone unturned to help the business in particular and public at large. They are taking strong and timely actions on proactive basis to combat Covid19 impact and support both citizens and residents of the UAE.
The latest edition is an economic stimulus package initiated by the Dubai Free Zones Council to enhance the UAE's efforts to minimize the impact of the Covid-19 to support the economy. This package has five key elements: Postponement of rent payments for six months period; Facilitating instalments for payments; Refunding security deposits and guarantees; Cancellation of fines for both companies and individuals and permitting temporary contracts that allow the free movement of labour between companies operating in the free zones for the rest of the year.
DMCC (Dubai Multi Commodities Centre) were crowned five times as the "Global Free Zone of the Year" by the Financial Times fDi magazine. They have implemented the "Business Support Package' to help the businesses to navigate through the current market conditions. Major highlights are 80 per cent reduction on the total company set up fee if shareholders are residents of JLT area; Up to 50 per cent reduction on the total company set up fee if shareholders are residents of other areas; Flexible payment options for new DMCC Business Centre tenants and there is no requirement to visit DMCC for business set up. The process is completely digitalized and Company can be formed at DMCC from anywhere in the world. There is 30 per cent discount on the license renewal and 100 per cent waiver of penalties due to late renewal of licence as well.
DIFC (Dubai International Financial Centre) Free zone, one of the top ten global financial centre, have announced a new "Business Stimulus Initiative" for the upcoming three months for both corporate and retail companies. Packages include a waiver of annual licensing fees for new registrations and 10 per cent discount on renewal fees for existing companies. There is a reduction on property transfer fees from 5 per cent to 4 per cent for any sale of property that took place within the said three months period. Additionally, DIFC will facilitate the free movement of labour in and out of the DIFC to other free zones.
JAFZA (Jebel Ali Free Zone), one of the most dynamic bases for thousands of businesses from over 100 countries have announced "Flexible Payment Plan" that enables all business to defer their rental payments for two months and pay with easier instalments effective from 01st April 2020. This will help businesses to sustain and maintain their cash flow through this challenging season. This plan is also applicable for companies operating in NIP (National Industries Park) and DAZ (Dubai Auto Zone).
SHAMS (Sharjah Media City) Free Zone is giving 20 per cent discount on 2-years Visa package, 25 per cent discount on 3-years Visa package and 35 per cent on 5-years Visa package starting from 22nd March till 23rd April 2020.
RAKEZ (Ras Al Khaimah Economic Zone), a powerhouse business and industrial hub in the UAE have announced "SME Client Support Boosters" offering various incentives that aim to ensure business continuity during the current global situation: 15 per cent discount on renewal, 100 per cent waiver on late renewal penalties, Flexible instalment options and others.
AFZ (Ajman Free Zone) has also introduced a package of economic incentives. These incentives include reducing and waiver of certain fines / fees and also offering easy instalment payment plan. For new company set up, AFZ will cover the cost of the E-Channel Warranty Dh5,000. These will ensure the continuity of businesses of all sizes and our expectation is that more than 8,000 companies will benefit from these incentives.
IFZA (International Free Zone Authority) based in Fujairah, the only B2B focused Free Zone in UAE have also introduced several measures. New company set up fee with single visa is reduced from Dh15,700 to Dh11,500 and they also waived E-channel deposit amounting to Dh5,000.
The CBUAE (Central Bank of the UAE) have also increased their Targeted Economic Support Scheme amount from Dh100 billion to Dh256 billion to contain the repercussions of the COVID-19 pandemic. The CBUAE are also reducing the amount of capital that banks have to hold for their loans to SME's by 15-25 per cent.
In nutshell, UAE Govt. authorities are working tirelessly in these tough times by taking proactively and timely measures to minimize the adverse impact on the Economy and Businesses. These initiatives will not only reinforce business confidence, but will also ensure smooth continuity of business operations.
- Chirag Gupta and Harikishan Rankawat are partners of RNG Auditors. Views expressed are their own and do not reflect the newspaper's policy.
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