The Abu Dhabi Department of Economic Development is implementing seven of the 10 strategic initiatives linked to a three-year Dh50 billion stimulus package for the emirate unveiled in June, its head told The National on Sunday.
The package, announced by Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, is aimed at supporting entrepreneurs, small to medium sized businesses and the private sector by bolstering growth, attracting more foreign direct investment and creating jobs.
When Abu Dhabi's Dh50 billion stimulus package was first announced, officials were given just 90 days to create a detailed execution plan for the package.
The department's initiatives include allowing non-Emiratis to establish car rental companies with Emirati partners for the first time, permitting entrepreneurs to work from home for the first time and granting dual licenses for companies to operate in and outside free zones.
Saif Al Hajeri, chairman of the department, said the seven initiatives it is responsible for will improve the ease of doing business in Abu Dhabi and “make the emirate a destination of choice for businesses across all sectors”.
The UAE is introducing a series of reforms aimed at boosting economic growth, creating jobs and diversifying the economy away from oil income. The measures announced over the last few months include waiving of corporate fines in Dubai and Abu Dhabi and allowing 100 per cent foreign ownership in companies in selected sectors from the end of this year.
Some of the department's seven initiatives will focus on simplifying the process of receiving commercial licenses. This includes Tamm, an online portal which launched earlier this year and allows investors anywhere in the world to instantly obtain commercial licenses for 91 per cent of all economic activities.
Golden Package of Tajer Abu Dhabi, which previously only supported Emiratis, will soon be rolled out to all entrepreneurs in the UAE, allowing new companies to obtain commercial licenses without an office or physical presence for two years. This allows entrepreneurs to officially work from home for the first time.
“We want Abu Dhabi to become the business-friendly cost-effective destination for early stage start-ups and entrepreneurs and at home businesses, and we see Tajer Abu Dhabi as one of the foundations of realising this goal,” said Mr Al Hajeri.
The department head added that commercial activities that were restricted to Emiratis, such as car rental companies, will also now be open to all nationalities, as Emiratis will be allowed to partner with non-UAE nationals to establish these entities.
It will also issue dual licenses allowing free zone companies in certain industries to also establish a branch onshore - a move that will help to attract more foreign direct investment to Abu Dhabi. While this initiative will be launched later this year, Mr Al Hajeri did not reveal which sectors it relates to.
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Other initiatives being put in force by the department aim to support private sector development as well as public-private partnerships and SMEs. These include a platform, to be launched soon, to register applications related to late receivables from government entities that ensure faster payments. The platform will also accept applications to review imposed fines and counter-productive penalties.
Mr Al Hajeri said the focus on developing a framework of policies on public and private sector partnerships (PPP) will help boost economic growth in the emirate by creating investment opportunities and lowering government expenditure. He added that the department was addressing regulatory and legal requirements.
“We also plan to incorporate a dedicated PPP office, whose responsibilities will include identifying PPP opportunities that are in line with His Highness’s directives,” he said, adding that the first step of this initiative will be ready by the end of the year.
The new rules will be particularly helpful to small and medium-sized companies, which have struggled during the three-year oil price slump to stay afloat, with little access to bank financing.
In a survey released by Dubai Chamber on Sunday, 65 per cent entrepreneurs said they consider banking their first challenge when setting up a business with funding the second biggest obstacle.
Mr Al Hajeri said the department wanted to help the more than 350,000 SMEs in the UAE - which make up more than 94 per cent of the total number of companies operating in the country - address some of the current challenges for growth, such as funding and access to market opportunities. SMEs contribute to more than 60 per cent of gross domestic product and the UAE aims to expand this figure to 70 per cent by 2021.
While Mr Al Hajeri did not confirm if this support will include financial backing, he said a special committee has been created to review outstanding payments due to the private sector.
“The information collected will remain confidential and allow the special committee to review reasons for non-payment and revamp the payment process across government sectors to accelerate payout to private sector suppliers in the future,” said Mr Al Hajeri.