Impact of COVID 19 on UAE businesses

by commitbizadmin 22, May 2020

Impact of COVID 19 on UAE businesses

Even the world's most flourishing economies were unprepared to face the COVID 19 pandemic that shook the systematic routine of the general world. And during desperate times of an epidemic, the primary goal of every nation to reduce casualties by acting quickly and effectively to protect its citizens. Very few countries in the world were first to move makers against this dangerous pandemic, and UAE happens to be a frontrunner even in the field of professional crisis management. Probably this is why most new business owners opt to set up business in the UAE, knowing that the government is always there to save the day for the citizens and the businesses.

Steps Taken by the UAE Government

Even before the World Health Organization (WHO) had officially announced COVID 19 as a Global Pandemic, the government of UAE had started acting on precautionary methods to stop the dangerous spread of the disease. The official school holidays that were scheduled by the beginning of April were preponed by the government, allowing all the educational institutions to let the students on leave from 8th March onwards. Along with this, the government rolled out a public advisory to maintain safety precautions and measures as well as adopting the method of social distancing.

The opening timings in public areas such as shopping malls, offices, and tourist attractions were reduced, and public transport was soon halted in the coming days, encouraging more and more citizens to stay at home. Within the following week, the government implemented strict regulations and impost a nationwide lockdown until 18th April to stop the spread of the disease. The government implemented a strict legal system for nationals that violated the lockdown by charging hefty fines as well as legal consequences. On the alternative, for expatriates living and working in UAE, the government announced that any violation of the lockdown regulation would lead to direct deportation from the country.

Impact of the COVID 19 Pandemic on UAE businesses

By this time, the government had made its intentions clear with its initial action plan. It shifted its attention towards helping businesses, especially SME companies, to stabilize during the crisis period. Many companies advised their employees to work from home either on full salary or on a 50% reduced package until the financial status of the company went back to normal. Unfortunately, some SME businesses could not take the strain and had to lay off many employees. The SME sector in UAE contributes to 52% of the non-oil GDP of UAE, but because of an imminent cash crunch and lack of finances to maintain a stable workforce, the businesses were on the verge of being shut down.

At this juncture, the government felt an immediate need to intervene and support the ever-thriving ecosystem that was feeling giddy due to the adverse impacts of the COVID 19 pandemic. The Dubai Multi Commodities Centre (DMCC) issued a business support package for Free zone companies in the UAE consisting of various support policies and incentives to business during the challenging times. The government reduced taxes and cost of doing business in UAE from 25% to an unbelievable 98% to influence investors to continue to pump funds into UAE based companies. Because of the growing unemployment rates during the pandemic that were affecting the economy and many businesses, the UAE government offered access to its Virtual Labour Market Portal, where employers could post vacancies in their companies and provide jobs to UAE residence visa holders.

A Minor Setback but a Promising Future

With the postponement of the much-awaited global phenomenon, The Dubai Expo 2020 and proportionally the cancellation or delay or rescheduling of many such events and campaigns that the UAE's public and private entities had planned out, the economy is sure to take a hit. Businesses must focus on sustaining their operations and controlling costs to avoid shutdowns, and the government will continue to support them. In these difficult times, the citizens, businesses, and national leaders have indeed shown the power of co-operation and co-existence solving problems cohesively. This indicates that even though the world has slowed down from a fast-paced life, the United Arab Emirates has put its firm foot on the brakes for a temporary period and is prepared to accelerate to a promising future ridding itself of the burden threatening the global population.

How can Commitbiz Help?

In these challenging times, we only wish for the best, hoping you are staying home and safe. But this minor setback shouldn't stop the ardent entrepreneur inside you from doing what you do best. With a well-established network in the Arab market and tailor-made business setup services in UAE, we assure you that we will support along the way. Now register your business from the convenience of your home, incorporating your company in a matter of ten working days and also avail of our services to register for an Offshore bank account. Contact us to know more.