Financial measures taken by UAE during the COVID-19 pandemic
By Joanne Vaz
A series of measures have now been introduced by various businesses and government authorities in the UAE; to assist and protect individuals and businesses impacted during this crisis.
On 2nd April 2020, developer Nakheel announced an AED 230 million economic relief package for its customers. It’s customers include property owners, retail and hospitality tenants and small business operators. Nakheel will be in touch with business partners on how the stimulus package will apply to them. The package includes:
- Waiving administration charges for services;
- Reducing district cooling charges by 10% for commercial and residential customers for 3 months;
- Free rental periods for retail and hospitality partners who operate within it’s Mall portfolio. This will take effect when the malls reopen under the government directives.
- Rental holiday for small retail business owners who lease space at master communities
The Dubai Economy launched, on 1ST April 2020, a dedicated portal – Price.ded.ae – to track daily prices of staple foods and essentials; and to ensure that consumers continue to get their basic needs at fair prices. The portal also enables consumers to raise their complaints and queries faster and easier.
The Dubai Economy has already imposed fines on nine pharmacies and two pharmaceuticals suppliers for tampering with the prices of face masks and sanitizers, following consumer complaints.
The Dubai Free Zones Council announced its initiative on 29th March 2020. Dubai Silicon Oasis Authority, Dubai Airport Free Zone Authority, Jebel Ali Free Zone, Dubai World Trade Centre, Dubai International Financial Centre, Dubai Development Authority, Dubai South, Meydan City Corporation, and Dubai Multi Commodities Centre have all contributed to this initiative.
It includes five key elements:
- Postponement of rent payments by a period of 6 months,
- Facilitating instalments for payments,
- Refunding security deposits and guarantees,
- Cancellation of fines for both companies and individuals,
- Permitting temporary contracts that allow the free movement of labour between companies operating in the free zones for the rest of the year. These advantages also benefit workers seeking better job opportunities, and those who have been granted unpaid leave by facilitating their re-employment in jobs in Dubai.
On 24th March, UAE-based payment solutions provider, Network International has announced an AED 5 million in cash and other relief measures for its merchant partners. It will provide
AED 3.7 million in cash to 1,000 of its most severely impacted customers, 0% merchant service fees over the next three month and waiving the minimum transaction fees for a 3 months.
Dubai Holding, Meraas and Aldar Properties announced on 18th March to provide relief to those impacted customers by making prompt payments, waiving fees and monthly payment of rentals.
On 14th March 2020, the Central Bank of the UAE introduced an AED 100 billion economic support scheme. The purpose of the scheme is to facilitate the provision of temporary relief from payments of principal and interest on outstanding loans, for all affected private-sector companies and retail customers. AED 50 billion will be made available to all UAE lenders through collateralised loans at zero cost funding. Participating banks should use the funding to grant temporary relief to private sector corporate customers and retail clients for a period of up to 6 months.
On 12 March 2020, the Dubai Government announced an AED 1.5 billion economic stimulus package for 3 months, which includes 15 initiatives aimed at reducing the cost of doing business and simplifying business procedures; especially in the commercial, retail, external trade, tourism, and energy sectors.
- A freeze on the 2.5% market fees levied on all facilities operating in Dubai,
- Refund of 20% on the customs fees imposed on imported products sold locally in Dubai markets,
- Cancellation of the AED 50,000 bank guarantee or cash required to undertake customs clearance activity. Bank guarantees that were paid will be refunded,
- Fees imposed on submitting customs documents of companies will be reduced by 90%,
- Cancellation of the requirement for providing a banking instrument while submitting customs-related grievances,
- 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,
- Cancellation of the 25% down payment required for requesting instalment-based payment of government fees for obtaining and renewing licenses,
- Commercial licenses to be renewed without mandatory renewal of lease contracts,
- Companies will be exempted from permits for new sales and offers,
- Reduction of municipality fees imposed on sales at hotels from 7% to 3.5%,
- Exemption for companies from fees charged for postponement and cancellation of tourism and sports events that were scheduled for 2020,
- Suspension of fees for the rating of hotels,
- Suspension of fees charged for the sale of tickets, issuance of permits and other government fees related to entertainment and business events,
- 10% reduction in water and electricity bills for all consumers,
- Reduction of the deposit paid for water and electricity connections by 50%.
The UAE government, like many governments around the world, have introduced emergency economic packages to soften the impact on the economy.
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