Dubai announces new stimulus package of AED 500 million
Jay Krishnan, Partner
28 October, 2020
Dubai has come up with yet another economic stimulus package to support the economy and people. The new package amounts to AED 500 million and with this, the total stimulus announced this year sums up to be AED 6.8 billion.
“Our goal is to help the businesses overcome the challenges caused due to the outbreak of the pandemic and to recover faster to establish a new phase of economic growth”, said Sheikh Hamdan.
Sheikh Hamdan added, “The private sector is a major partner in Dubai’s progress, and considering the struggles of the different sectors, the stimulus package includes a set of fee exemptions and rent reductions as well as the extension of previous relaxations.”
He also said, “We are working as a single integrated entity and our prime focus is accelerated recovery. It is important to have a consistent work plan to support all the sectors to help maintain the continuity of businesses, especially for the SMEs. We have to create a more flexible economic environment that can adapt to global changes.”
According to the new stimulus package, advertising companies have been exempted from advertising permit fees imposed by the Dubai Municipality for 3 months, with a retroactive effect from March 15 to June 16.
Private nurseries of the Emirate have been exempted from commercial license renewal fees; the clinics in nurseries are also provided with extended licenses. The license of the health professionals working in the nurseries has also been extended for a period of 6 months from the date of expiration. A 50% reduction in rents till the end of the year is given to the nurseries functioning in the premises of the ‘Knowledge Fund Establishment.’
Sheikh Hamdan has also included amendments to calculate the franchise fee for the taxi sector to enhance the liquidity of operating companies.
The new stimulus package has extended the validity of some of the initiatives which were announced during the previous stimulus package for an additional three months. The extension includes the 2.5% freeze on market fee and cancellation of all fines charged due to late payment for government services. The payment of penalties will not require the renewal of commercial licenses also (during this period).
In addition, commercial licenses can be renewed without the mandatory lease contract renewal. 25% of the down payment for paying government fees in installments has been cancelled. The fee for sales and special offers has also been exempted.
The initiative where the bank or cash guarantee AED 500 for the customs clearance activity will continue to be waived. The bank or cash guarantees which were already paid by the customs clearance companies will be refunded. The fees for the customs documents continue to be AED 5 which was AED 50 for each transaction and the customs complaints processing will be hastened.
The relaxations for the tourism, entertainment, and events sectors will be extended till the end of the year. The freeze on fees for hotel rating, ticket sales, issuing permits, and the other government fees will all be extended.
As in the education sector, private schools are being exempted from commercial and educational licenses until the end of the year.
The temporary entry permit of the artworks loaned from institutions outside the Emirate has been extended till the end of 2020; the artworks which came in by the fourth quarter of 2019 which still remains here are also allowed extension till the end of the year.
For the tourism and entertainment sector, the initiative to refund hotel establishments and restaurants 50% of the 7% municipality fees charged on sales has been extended till the end of 2020. The “Tourism Dirham Fees” has also been halved for the rest of the year.
In the international sector, the exemptions of docking fees at Dubai port and Hamriya port for traditional commercial vessels that are registered locally in the UAE have been extended.
The new stimulus package announced by Sheikh Hamdan has included relaxations for numerous sectors. The aim is to help the economy recover faster. The stimulus packages focus on lending a hand to the struggling businesses, especially the small and medium-sized businesses.
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