Relief for businesses with expired licenses is another example of government's efforts to reboot growth
Dubai and Abu Dhabi's holistic approach to economic revival
The decision by Dubai and Abu Dhabi to relieve troubled businesses facing administrative penalties is but another testament to the government's commitment to support budding businesses.
Dubai will cancel fines imposed on businesses whose licences have expired. The grace period for businesses given by Department for Economic Development (DED) in the emirate runs till the end of 2018.
Abu Dhabi in parallel said it will extend similar exemptions to businesses whose licences have not been valid for more than 24 months.
These decisions, along with other steps taken in recent weeks by two of the biggest emirates in the UAE, are examples of how governments in the region can evolve and implement a holistic approach to reboot economic growth, in the wake of challenging market conditions globally and low oil prices that slumped in 2014.
The UAE's economy, the second-biggest in the Arab world, is taking a turn and the time is ripe to support the businesses, especially, small and medium-sized enterprises (SMEs) which undoubtedly are the backbone of the country’s non-oil economic infrastructure.
Oil prices have rebounded during the first quarter of this year, promoting an uptick in the economic activity. The country's economy is now expected to gather speed in 2018 and 2019, rising to around 3 per cent from less than 2 per cent in 2017. The Central Bank of the UAE forecasts non-oil GDP growth to rise to 3.9 per cent this year compared with 3.4 per cent in 2017 and steps such has waiver for businesses are going to help the economy, getting the traction in needs to maintain an upward trajectory.
In terms of policy decision, the last few months have been really good for the UAE businesses, some of which have struggled under the additional burden of VAT, which was introduced at the beginning of this year.
The UAE government earlier this month announced plans to allow foreign investors 100 per cent ownership in businesses and grant 10-year visas to some expatriates, which is going to significantly boost foreign direct investment to the country and boost economic activity.
The proposed residency and ownership changes will help increase local consumption in the economy and may curb remittance outflows which were estimated at $45bn in 2017, according to government data.
These measures will boost the contribution of the non-oil sector to the economy to 80 per cent by 2021, from the current 70 per cent. They will increase the competitive edge of the UAE as a destination of choice -- again, a good example of holistic approach, supporting corporate sector in the country and incentivising others to set up foreign base here.
Dubai, separately, plans to implement new measures to help boost its own economic growth, attract new investments and cut the cost of doing business across sectors ranging from tourism to financial services.
Payment of certain government fees in instalments, allocating 20 per cent of government tenders to SMEs and waiving commercial penalties and fines imposed by the DED on companies’ violations – some of which can run into thousands of dirhams are just a few examples.