The year 2020 has become a surprise stress fest for many businesses around the globe. But during the time of crisis, business owners focus only on the survival of the company rather than making pioneering innovations or record-breaking profits per quarter. Firms often resort to cost-cutting by reducing operational expenditure and in many desperate attempts also resort to laying off employees to reduce costs. This would have been the same case for business in the UAE had the government not stepped in as the knight in shining armour.
When speaking about a significant shift in the Arab economy and the regular practice of business setup in the UAE, we often consider choosing the business hub of the UAE, which is Dubai. Dubai, like many popular business destinations, had hit a sudden roadblock in March 2020 when an immediate lockdown was announced and citizens were forced to stay indoors. Every industrial sector took a hit which is why there was a massive economic decline even before the financial year had officially started. But even when the dust settled after chaos and businesses started reopening, there was an enormous decrease in consumer inflow which made was draining the life out of many small and medium enterprises who did not have enough resources to sustain the firm.
The AED 1.5 Billion Stimulus Package
Under the leadership of H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, the government released an AED 1.5 Billion economic stimulus package to support business entities in Dubai amidst the COVID-19 pandemic crisis. This package also consists of 15 unique initiatives targeted at various industries such as travel and tourism industry, retail sector, commercial sector and trade industry. As an added relief package for businesses in the UAE, the Central Bank of the United Arab Emirates (CBUAE) has announced several incentives and financial aids for companies that would require any monetary funding to mitigate the impact of the pandemic on the business.
Additional Relief Policies
- The government will be providing 20% refund of customs duty fees imposed on imported products sold locally in Dubai markets.
- Fees imposed on submitting customs documents of companies will be reduced by 90%.
- Dubai Multi Commodities Exchange (DMCC) has rolled out a business support package to support its 17,000 members, which will be applicable as of April 1, 2020, until June 30, 2020.
- The government will be decreasing municipality taxes on hospitality services as well as will be freezing all cancellation fees for the sports events and entertainment events that have been postponed or cancelled due to the pandemic. A significant event that was postponed from this year is The Dubai Expo which will now take place in 2021.
- The deposits paid for water and electricity for workspaces, retail outlets, commercial areas will be reduced by 50%, and businesses will receive 10% discounted bills for water and electricity for the next three months.
Dubai Chambers COVID-19 Portal – Business Connect
The Dubai Chamber of Commerce and Industry launched the “Business Connect” online information portal which will aid many in navigating their operations through difficult times. The main aim of the portal is to help companies and institutions in Dubai to overcome the economic repercussions of the spread of coronavirus. The page includes economic and educational resources, news, and various economic viewpoints related to the existing challenges and ways to confront them. The government also uses the portal as a means of analysing the recent developments in the economy and the performance of various industrial sectors.
Apart from the theoretical know-how, the page also includes short promotional videos on different topics related to the business industry, some of them from the representatives of the private sector on the Dubai Chamber's campaign #BeSafe #WorkSmart.
How does Commitbiz Help?
The sudden outbreak of the pandemic had created panic among many business owners but through our tailor-made services, expert consulting and finesse, we try to provide our clients with assistance to set up business in the Dubai and various locations across UAE. Tough times need tough measures; hence, we at Commitbiz have come up with a #STARTFROMHOME initiative to help businesses in the UAE. We have fine-tuned our business setup procedure so that you can register your business from the convenience of your home. Your company can be incorporated in just ten days, and what's more, you can also apply for an offshore bank account from your home. The current time is an opportunity to start a home-based business and grow it virtually and connect with consumers. Contact us to know more.
Why is Dubai considered a diverse economy?
This is because it is a non-oil-dependent country, and the country comprises an eighty percent expatriate population.
How much economic stimulus was announced by the Dubai Government during covid?
1.5 billion dirhams (USD 408 million).
How much deployment was made by the Central Bank of UAE for covid-19?
It deployed a fiscal package of USD 70 billion.
What covid relief policy was introduced for workspace water and electricity for the businesses in Dubai?
The deposits paid for electricity and water in the workspaces, commercial areas, and retail outlets were reduced by 50%. Also, for three consecutive months, there will be a 10% discount on the water and electricity bills of the businesses.
What was the contribution of the Business Connect platform as Dubai’s Covid-19 portal?
The platform aided the private sector in making well-informed & practical decisions based on reliable data. It assisted businesses in overcoming problems and improving their competitiveness by allowing them to stay up with all business-related advancements.