Sun 21-11-2021 17:52 PM
DUBAI, 21st November 2021: Under the directives of H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of The Executive Council, the Government of Dubai has extended the five-year exemption given earlier to Emirati members of Dubai SME from paying licence fees as applicable under Article No. (10) of Law No. (23) of 2009, to seven years.
The decision is part of a series of initiatives aimed at supporting entrepreneurs and their startups to fully tide over the challenges brought by the global outbreak of COVID-19 and focus on their growth without cash flow concerns.
H.H. Sheikh Hamdan bin Mohammed lauded the role of small and medium enterprises (SMEs) in continuing to create new opportunities as well as in positioning the UAE as a resilient economy and global hub for entrepreneurial innovations. "Creating an exceptionally competitive and flexible landscape for SMEs is an integral element of the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to raise the city’s status as a global hub for entrepreneurial innovation, while also consolidating our rich entrepreneurial traditions into a catalyst for economic diversification and sustainable economic growth," His Highness added.
Under Article No. (10) of Law No. (23) 2009, the licensing fee applicable on SMEs was AED 1,000 for the first three years from the issuance of the licence, and AED 2,000 for the fourth and fifth years. The five-year exemption granted earlier contributed to reducing financial burdens faced by startups, which in turn enabled them to continue playing an active role in economic development in Dubai and the UAE.
Abdulrahman Al Saleh, Director General of the Department of Finance, Government of Dubai, remarked that the extended exemption granted to SMEs will go a long way in revitalising the overall economic movement in Dubai. "In light of our leadership's directives, Dubai has already announced five stimulus packages worth AED7.1 billion in the aftermath of COVID-19 and the outcomes have been phenomenal in terms of the emirate resuming full-scale economic activity while also enhancing its business competitiveness and investment attractiveness."
"Further easing the financial burden on SMEs is no less important as it will support this critical majority of local businesses in avoiding accumulation of financial obligations, and at the same time using their cash reserves to move forward and contributing to Dubai’s strategic growth plans," Al Saleh said.
"The major factor that set Dubai apart globally in managing the pandemic efficiently was the swift action taken by our strong and decisive leadership and government. As a city aiming to be future-ready and the best place in the world to live, work and visit, strengthening economic resilience and supporting businesses of all sizes to sustain growth will remain a top priority for Dubai," stated Helal Saeed Al Marri, Director General of Dubai’s Department of Economy & Tourism.
"Emirati entrepreneurs should be particularly supported and motivated since they are critical to ensuring the sustainability of the labour market and building a competitive national cadre, a key target emphasised once again by the leadership in the ‘Projects of the 50.’ The fee exemption will help SMEs in Dubai focus on asserting their demonstrated role in pioneering innovations across sectors, especially in advanced technology, healthcare and vital services," added Al Marri.
The Department of Finance, in coordination with the General Secretariat of the Executive Council and Dubai SME, has launched a series initiatives for small and medium-sized companies since 2018, which included allocating 20% ??of government purchases for Dubai SME members and special dealings with regard to primary and final insurance as well as accelerating payment of corporate dues, in addition to other benefits granted by Law No. 12 of 2020 on Contracts and Warehouse management in Dubai Government.
In Dubai, SMEs constitute nearly 95% of all companies, employing 42% of all workforce in the emirate and contributing to around 40% of Dubai's GDP.
Extending the fee exemption follows a series of incentives and assistance offered by Dubai SME under the directive of the government to ensure business continuity during the pandemic phase and the subsequent precautionary measures adopted. The latest exemption will particularly bring relief to SMEs that were not able to take advantage of the incentives and assistance due to the restrictions on business activity during the last two years.
Since 2002, Dubai SME has supported 10,803 member SMEs with incentives and relief measures worth over AED995 million. The extension of fee exemption granted now applies to registered members of Dubai SME who have not completed the five-year period stipulated in Article No. (10) of Law No. (23) 2009. New members are not eligible for the extension.