Finance & Capital Market

Dubai launches AED500m economic stimulus package

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai has launched an AED500 million ($136 million) economic stimulus package to support various business sectors across the economy.

The new package brings the total value of stimulus packages introduced by the emirates’ government in 2020 to AED6.8 billion, reported state news agency Wam.

The stimulus package is aimed at mitigating the impact of the current global economic situation on businesses and support them to overcome the current exceptional circumstances, "We strive to support the business sector while working together to counter the negative effects of the COVID-19 pandemic. The business sector is at the heart of our economy. We are keen to revive the business environment and open new horizons for entrepreneurs and investors in line with Dubai’s future aspirations," Sheikh Hamdan said.

Highlighting the importance of the small and medium-sized enterprises (SMEs), he said: "We are working as one integrated system, and our main goal is to accelerate the pace of recovery and ensure that the economy can tide over this phase. The current circumstances require consistency in the business approaches to ensure continuity and a flexible economic environment that can adapt to global changes.”

He launched several economic initiatives that seek to support various business sectors in Dubai. Advertising companies affected by the pandemic will be exempted from Dubai Municipality’s advertising permit fees for three months, retroactive from March 15 to June 16, 2020.

Sheikh Hamdan also launched a series of initiatives to support private nurseries in Dubai, which include exempting them from the renewal fees of the commercial license and extending the licenses of existing clinics operating in these nurseries.

Additionally, the licenses of health professionals working in nurseries will be extended for six months from the date of expiry of the license. Nurseries located on lands owned by the Knowledge Fund Establishment will be eligible for a 50% reduction in rent until the end of 2020.

He also approved an initiative to support the taxi service sector through adjusting the government fees to enhance liquidity for operators.

Furthermore, Sheikh Hamdan approved extending the validity of some of the initiatives announced in the previous stimulus package for three months until the end of 2020 to support the private sector in coping with the repercussions of the pandemic. These include extending the freeze on market fees levied on all sectors in Dubai until the end of 2020. The 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 also 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 the requirement for providing a banking instrument when submitting customs-related grievances continues to be cancelled.

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 until the end of 2020. The freeze on government permit fees for the retail sector will be also be extended until the end of November2020.

Cancellation of all fines charged for late payment of government service fees and payments of penalties to renew commercial licenses has also been extended. 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 until the end of 2020.

These initiatives come in addition to a number of previously announced initiatives that have been extended until the end of 2020. These include an initiative to abolish fines, exempt private schools from commercial and educational license renewal fees, extend the period of temporary entry of loaned artworks through Dubai ports, to include all works of art that entered the emirate from the beginning of the fourth quarter of 2019 and have still not exited the emirate.

The municipality fee on hotel establishments’ sales will be set at 7% and the ‘Tourism Dirham Fee’ will be restored, where hotel establishments and restaurants will be refunded 50% of the fee until the end of 2020. The initiative to waive all deferral and cancellation fees for all recreational and sporting events, including exhibitions and conferences will be extended.