Dubai launches second economic ‘stimulus’ package

By Eudore R. Chand

Five new initiatives to support SMEs and public-private partnerships

DUBAI 6 March 2019: The Government of Dubai’s Department of Finance (DOF) has launched a second package of economic growth initiatives aimed at enriching the emirate’s economic incentive package.

The leadership directives to the government focused on simplifying the procedures of conducting business and reduce the costs for companies by harnessing all the possible resources, in order to facilitate economic growth.

“The new initiatives package includes five initiatives to support small and medium-sized enterprises (SMEs) and public-private partnerships (PPP),” said DOF’s Director General, Abdulrahman Saleh Al Saleh.

“We are keen to… implement a range of economic and financial incentives and facilities aimed at reducing the cost of conducting business, supporting the registered companies in the emirate and attracting new investments.”

Abdulrahman Saleh Al Saleh

Payments: The first incentive initiative is to pay the dues of SMEs that supply services and goods to government agencies within 30 days instead of 90 days, provided that the payment period is only within 10 days for the members of Dubai SME. According to the initiative, the government will set a classification of the SMEs entitled to receive their dues within 30 days. The initiative is expected to provide SMEs with additional liquidity of Dh1.6 billion per annum.

Primary Insurance: The second initiative involves reducing the value of primary insurance for SMEs to the range of 1-3 percent instead of 2-5 percent, in order to encourage them to continue supplying to government agencies. Under this initiative, the minimum primary insurance was reduced from Dh40 million to Dh20 million, which involves 80 percent of SMEs, while the maximum primary insurance was reduced from Dh100 million to Dh60 million, which involves 20 percent of the establishments.

This initiative too aims to provide greater liquidity for SMEs, while ensuring greater opportunities for them to participate in procurement to government agencies.

Performance Insurance: The third economic incentive initiative is on final insurance for SMEs’ performance at government projects. This initiative involves the reduction of the final insurance rate, known as “performance insurance”, from 10 percent to five percent on all supplies. Under this initiative, the Government of Dubai intends to prepare a classification of SMEs entitled to the performance insurance reduction.

This initiative is expected to increase the value of the retrieved final insurance from classified enterprises, which account for 70 percent of the total SMEs, up to Dh100 million over a shorter period of time.

SME Projects: The fourth initiative of economic incentive initiatives focuses on allocating five percent of government capital projects to SMEs. Aimed at members of Dubai SME, the initiative will encourage enterprises to develop their business, enter into major projects contracts with government agencies and form alliances to compete for government projects.

The allocation of five percent of government capital projects to SMEs allows them to get projects worth of up to Dh400 million.

PPP Projects: The fifth initiative is the allocation of projects worth Dh1 billion to the PPP, in order to attract the private sector investments, raise the government service quality and reduce the burden on the budget.

This initiative will ensure the optimal utilisation of Law No. 22 of the year 2015 on Public-Private Partnership, as well as the implementation of projects planned by government agencies on time, in line with the Dubai 2021 Plan.

ALSO READ:

Stimulus: Dubai Chamber waives late membership fees

Stimulus: No ‘delay’ fines for chamber businesses

Stimulus: No ‘delay’ fines for chamber businesses

Chamber exempts outstanding fees, tourism tax cut

Fees reduced for government contractors, suppliers

Up to 70% discount on DWTC Free Zone licence

UAE Stimulus: Visas eased; Dh60 pa insurance

Stimulus: Abu Dhabi halves tourism, municipal fees

Dubai slashes 21 fees, freezes school fee hike

Abu Dhabi too exempts firms from fines, fees

Abu Dhabi gets Dh50 billion economic stimulus package

Biz Boost: Dubai businesses exempted from fines

Dubai launches 4-step economic stimulus package

3-year freeze on Dubai government fees: Hamdan

No increase in UAE federal fees for 3 years: Mohammed

Free Zone reduces late licensing penalty by 40%

Your lease contract registration fees reduced here

Dubai Gazette