Dubai has unveiled a AED 1.5 billion economic stimulus package for the next three months to support companies and the business sector.
The initiative aims to enhance liquidity and reduce the impact of the current global economic situation following the outbreak of COVID-19.
The package has been launched by Dubai's Crown Prince and Chairman of The Executive Council, His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, following the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
It will help reduce the cost of doing business and simplify business procedures, especially in the sectors of tourism, retail, external trade and logistics services.
The measures are expected to have a positive impact on all other sectors as well over the next three months.
Here is the breakdown of the stimulus package:
The tourism sector will benefit from four initiatives over the next three months, the first of which is the reduction of municipality fees imposed on sales at hotels from 7 per cent to 3.5 per cent. The second initiative exempts companies from fees charged for postponement and cancellation of tourism and sports events scheduled for the year 2020.
The third initiative freezes fees for the rating of hotels. The fourth initiative freezes the fees charged for the sale of tickets, issuance of permits and other government fees related to entertainment and business events.
A 50% reduction of the Municipality fee on hotel sales, exempting companies from postponement fees for tourism & sports activities in 2020. Also, freezing classification fees to hotels, freezing ticket fees, permit issuance & government fees on recreational & business activities.— Hamdan bin Mohammed (@HamdanMohammed) March 12, 2020
The stimulus package also features initiatives that seek to reduce the cost of living and doing business for citizens, expatriate residents and the business community through 10 per cent reduction in water and electricity bills, including those charged in the residential, commercial and industrial sector, for a period of three months. Also, the deposit paid for water and electricity connections has been reduced by 50 per cent.
Easing the cost of living by reducing water and electricity bills by 10% for all Dubai customers, including residential, commercial and industrial for a period of 3 months, while reducing the deposit paid by 50%.— Hamdan bin Mohammed (@HamdanMohammed) March 12, 2020
For the commercial and business sector, Dubai Government has introduced a freeze on the 2.5 per cent market fees levied on all facilities operating in Dubai. The second initiative extends a refund of 20 per cent on the customs fees imposed on imported products sold locally in Dubai markets.
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. Also, fees imposed on submitting customs documents of companies will be reduced by 90 per cent.
Suspension of 2.5% market fees, recovery of 20% of custom fees on imported products sold locally, cancellation of the AED50,000 bank guarantee or cash required to exercise customs clearance activity, 90% reduction on the fees imposed on submitting customs documents.— Hamdan bin Mohammed (@HamdanMohammed) March 12, 2020
With regards to measures for boosting external trade, the requirement for providing a banking instrument while submitting customs-related grievances has been cancelled. In addition, traditional wooden commercial vessels registered in the country will be exempted from mooring service fees for arrival and departure, as well as direct and indirect loading fees at Dubai Harbour and Hamriyah Port.
Local commerce will benefit from the cancellation of the 25 per cent down payment required for requesting installment-based payment of government fees for obtaining and renewing licenses. The move seeks to reduce the financial burden on SMEs.
In addition, commercial licenses can be renewed without mandatory renewal of lease contracts in a move aimed at stimulating business activity and easing government-related procedures. Companies will also be exempted from permits for new sales and offers.
Local commerce will benefit from the cancellation of the 25% down payment for requesting the installment of government fees for licensing and renewing licenses, in a move that seeks to reduce financial burden on SMEs.— Hamdan bin Mohammed (@HamdanMohammed) March 12, 2020
"We are extending this stimulus package to ensure we can realise our ambitious development objectives by defusing any obstacle that can hinder our progress.
"Through such initiatives, we are keen to ensure that Dubai maintains its leadership and its profile as the world’s best city to live and work," said Sheikh Hamdan.
The stimulus measures that will be introduced with immediate effect will be valid for the next three months. Following this period, the impact of the measures on the economic situation will be reviewed.