Effort comes as part of a range of new initiatives by the UAE Government to stimulate growth
Dubai's DED to allow businesses to pay fines in instalments, renew licences
Dubai's Department of Economic Development (DED) has launched a package to help businesses clear fines and renew licences in monthly instalments, as part of efforts to stimulate business growth and economic development in the UAE.
"Eliminating all obstacles faced by companies is important to developing the economy and creating a competitive environment conducive to investment in Dubai," said Mohammed Al Shehhi, DED's deputy chief executive, corporate support services.
In May, Dubai and Abu Dhabi granted companies exemption from administrative fines for the rest of year to help boost business and economic growth. A decree by Sheikh Mohammed bin Rashid, the Ruler of Dubai, said the DED would cancel fines imposed on businesses whose licences have expired until the end of 2018. Abu Dhabi said it will exempt businesses whose licences have not been valid for more than 24 months.
Under the new package, apart from paying fees and fines in easy instalments, businesses can freeze their trade licence for a year as well as seek amicable settlements with the DED for commercial violations.
The service package would enable businesses to maintain competitiveness by overcoming obstacles and benefiting from a credit facility, the DED added. Companies now have the option of paying licence renewal fees and accumulated fines in 12-month instalments. The facility has been extended in co-operation with a number of local banks including aafaq Islamic Finance. The licensee benefits from instalment payments if fines and fees have accumulated for more than a year. Investors also have the option to entirely avoid payment, by temporarily freezing their business, while retaining their licence. The waiver applies to fines issued before April 14, 2018 and for those issued after that, firms can take advantage of the amicable settlement and instalment payment options. Those who opt for amicable settlements should not have been beneficiaries of any other exemption following the first fine incurred after April 14, 2018. These licensees are entitled to a 50 per cent reduction in the basic value of penalties issued for the first violation.
The move follows a recent trend towards relaxing rules to incentivise investment at a time of slowing FDI activity across the region. The UAE Government announced last month that it would allow foreign investors 100 per cent ownership in businesses besides granting 10-year visas to some expatriates.
The UAE’s economy is recovering from muted growth in the past two years due to sustained low oil prices. GDP growth is expected to gather speed in 2018 and 2019, rising to 2.7 per cent and 3.1 per cent, respectively, from 1.5 per cent in 2017, according to the Central Bank of the UAE.