Dubai’s stimulus package seeks to reduce the cost of doing business and simplify business procedures/Bloombergby Kudakwashe Muzoriwa
The Crown Prince of Dubai, HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, has announced an AED 1.5 billion economic stimulus package for the next three months to mitigate the impact of the coronavirus on companies and the business sector in the emirate, according to local newswire, WAM.
Sheikh Hamdan, who is also the Chairman of the Executive Council of Dubai said that the stimulus package will provide the highest support for citizens, residents and investors in these exceptional circumstances.
“The world is going through difficult times, but we have the capability to navigate challenges successfully,” said Sheikh Hamdan.
Dubai’s stimulus package seeks to reduce the cost of doing business and simplify business procedures, especially in the sectors of tourism, retail, external trade and logistics services.
The package 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.
Additionally, fees imposed on submitting customs documents of companies will be reduced by 90 per cent.
Local commerce will benefit from the cancellation of the 25 per cent down payment required for requesting instalment-based payment of government fees for obtaining and renewing licences, a move that seeks to reduce the financial burden on SMEs.
In addition, commercial licences can be renewed without mandatory renewal of lease contracts as the emirate moves to stimulate business activity and easing government-related procedures.
Furthermore, the tourism sector will benefit from four initiatives including the reduction of municipality fees imposed on sales at hotels from seven per cent to 3.5 per cent, the exemption of companies from fees charged for postponement and cancellation of tourism and sports events scheduled for the year 2020 and the freezing of fees required for the rating of hotels.
Dubai’s stimulus package also features two 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 and a 50 per cent decrease in deposit paid for water and electricity connections.