In a bid to save and revive the economy, UAE Federal Government introduced “Targeted Economic Support Scheme”, on 15th March 2020. This scheme will provide temporary relief in respect of outstanding loans for all private sector companies affected by COVID-19, and includes an AED 50 billion funds distributed through 0% interest collateralized loans for banks operating in the UAE. In addition, AED 50 billion has been released from banks’ capital buffers to encourage further lending to private sector businesses in need of credit during this time.
The scheme was directed at retail, SMEs in particular, and the most impacted sectors within the corporate world as well. And whether you are a personal loan or a mortgage loan owner or an SME or a corporate, you are benefiting from these schemes. This was a move to protect the economy, and buffering banks and businesses with an economic support scheme. This took the form of collateralized loans to banks at zero cost in order to encourage lending.
In addition, Abu Dhabi has also allocated AED 3 billion to the SME credit guarantee scheme managed by the Abu Dhabi Investment Office in order to stimulate financing by local banks and enable SMEs to navigate the current market environment. Bid bonds have been suspended and an exemption introduced for start-ups from performance guarantees for projects up to AED 50 million. Finally, Abu Dhabi has allocated AED 1 billion to establish a market maker fund. The fund is charged with enhancing liquidity and maintaining the balance between supply and demand for stocks.
Other Federal Government Measures taken by government Rate reductions and exemptions in various business activities for companies which also includes Property costs where tenants struggling to pay their rent during the COVID-19 pandemic are exempt from eviction.
In Dubai
In Abu Dhabi
- In which market fees of 2.5% will be freeze for all facilities operating in Dubai for three months
- Cancellation of the AED 50,000 bank guarantee or cash requirement in order to undertake customs clearance activities
- Reduced “municipality fees” imposed on sales at hotels from 7% to 3.5%
- A reduction of fees on submission of customs documents
- Reduction in water and electricity bills, including residential and commercial bills, for 3 months
In Abu Dhabi
- Reduced industrial land leasing fees on new contracts
- Rebate on rental values for restaurants, tourism and entertainment sectors of up to 20%
- Exemption on commercial vehicles from annual registration fees, road toll tariffs & Tawtheeq fees on all commercial and industrial activities till end of 2020
- 100% waiver on Commercial License renewal fees, Business Activity renewal fees, Data Protection renewal fees, new Temporary Work Permit issuances, renewal and late application fees till 25 March 2021
- FSRA-regulated entities will have 100% refund on fees already paid and 50% refund on supervision fees