It’s also part of the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to raise Dubai’s status as “a global hub for innovation and entrepreneurship”, said Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of The Executive Council.
“The extension is part of Dubai’s efforts to support businesses in expanding their growth and operations, and enabling SMEs to maintain their growth momentum,” the crown prince said on Twitter.
Under Article No. (10) of Law No. (23) 2009, the licensing fee applicable on SMEs was 1,000 UAE dirhams ($272) for the first three years from the issuance of the license and 2,000 UAE dirhams for the fourth and fifth year.
SMEs account for almost 95 percent of all companies in Dubai. They employ 42 percent of the emirate’s workforce and contribute around 40 percent of the gross domestic product (GDP).
Revitalising the SME sector
Several initiatives have been rolled out in Dubai to help the SME sector, including the allocation of 20 percent of government purchases for Dubai SME members.
The extension will help revitalise small businesses in Dubai, according to Abdulrahman Al Saleh, Director General of the Department of Finance, Government of Dubai.
“In light of our leadership’s directives, Dubai has already announced five stimulus packages worth 7.1 billion UAE dirhams in the aftermath of COVID-19 and the outcomes have been phenomenal in terms of the emirate resuming full-scale economic activity while also enhancing its business competitiveness and investment attractiveness,” he said.
“Further easing the financial burden on SMEs is no less important as it will support this critical majority of local businesses in avoiding accumulation of financial obligations, and at the same time using their cash reserves to move forward and contributing to Dubai’s strategic growth plans,” Al Saleh said.
According to Helal Saeed Al Marri, Director General of Dubai’s Department of Economy and Tourism, small businesses owned by UAE nationals should get some support, as they play an important role in the employment sector.
“Emirati entrepreneurs should be particularly supported and motivated since they are critical to ensuring the sustainability of the labour market and building a competitive national cadre, a key target emphasised once again by the leadership in the ‘Projects of the 50’. The fee exemption will help SMEs in Dubai focus on asserting their demonstrated role in pioneering innovations across sectors, especially in advance technology, healthcare and vital services,” Al Marri said.
Across the UAE, small businesses account for more than 94 percent of all companies in the country. SMEs employ more than 86 percent of the total workforce in the private sector as of 2019, according to the Ministry of Economy.
Dubai SME was established by the Department of Economic Development (DED) in 2002 in recognition of the sector’s contribution to the local economy.
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2021