Dubai Free Zones Council, the body tasked with the development of free zones in the emirate, has announced an economic stimulus package to complement the UAE's efforts to soften the impact of the coronavirus on the economy.
The new package that supports Dubai’s Dh1.5bn stimulus announced earlier this month, will help free-zone companies reduce the cost of doing business and relieve financial stress, the Dubai Media Office said on Saturday.
The package – with five key elements – allows companies to postpone rent payments for six months and facilitates instalments. It also allows refund of security deposits and guarantees and cancellation of fines for both companies and individuals.
The authority will permit temporary contracts that will grant free movement of labour between companies operating in the free zones for the rest of this year. The move will benefit workers seeking better job opportunities and those who have been asked to take unpaid leaves to find alternative employment in Dubai, the media office said.
To ensure business continuity of companies and providing them the support they need are critical to the Dubai economy's ability to successfully overcome the crisis, said Sheikh Ahmed bin Saeed, chairman of DFZ Council.
The free-zone stimulus measures provide companies with “the liquidity necessary to tackle the current situation” and maintain competitive advantage and sustainable growth, he said, adding that the package supports a wide range of SMEs to maintain their competitiveness.
The move follows Sheikh Hamdan bin Mohammed, Crown Prince of Dubai's March 13 announcement of an economic stimulus aimed at reducing the effects of the Covid-19 pandemic on the emirate's economy. The relief package includes measures to protect businesses, especially in tourism, retail, external trade and logistics services.
The government introduced nine initiatives over the next three months, including a freeze on the 2.5 per cent market fees for all facilities operating in Dubai.
Dubai free zones form a significant part of economic activity in the emirate, with 44,985 registered companies that support 389,336 jobs. The revenues from these zones make up 33 per cent of the emirate's gross domestic product.
DFZC along with 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 are among the free zones implementing the package.
DIFC has proposed introducing five initiatives over the next three months including waiving annual licence fees for new companies, and a 10 per cent discount on renewal fees for existing licences.
Companies will benefit from deferred payment plans for all commercial properties owned by DIFC Investments for a period of six months.
The financial hub will also reduce its ownership transfer fees from 5 to 4 per cent for any property sale that happens within the three-month period.
"We are committed to supporting our community during these unprecedented times," Essa Kazim, governor of DIFC said. "The new economic stimulus package presented by the Dubai International Financial Centre shows its continued dedication to implementing comprehensive measures to support businesses and enable companies to continue their operations easily and flexibly."
Dubai Development Authority and Tecom Group have also offered deferred payments to companies.
New businesses can postpone their lease periods and have their registration fees cancelled for six months. They will also be exempted from fines on expired licences and other financial and administrative fees.
The package also offers flexible fee payments, including building licences and services, in addition to refunding security deposits and guarantees to help cash flow.
The DMCC is also offering large exemptions on a wide range of fees for the 17,000 registered companies, as it reduces registration fees by 50 per cent for new companies joining the centre, while "current companies now have 30 per cent discounts on renewal and amendment fees", Ahmed bin Sulayem, chief executive of DMCC, said.
"In addition, we have launched many flexible payment options for various sectors. We will continue supporting their needs and announce additional details in due course,” he noted.
