The Government of Dubai’s Department of Finance (DOF) has launched a second package of economic growth initiatives aimed at enriching the emirate’s economic incentive package as part of the government’s response to the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
The leadership directives to the government focused on simplifying the procedures of conducting business and reduce the costs for companies by harnessing all the possible resources, in order to facilitate the economic accomplishments.
“The new initiatives package includes five initiatives to support small and medium-sized enterprises (SMEs) and public-private partnership (PPP),” said DOF’s Director General, Abdulrahman Saleh Al Saleh.
“We are keen to work in accordance with the directives of Sheikh Mohammed, and implement a range of economic and financial incentives and facilities aimed at reducing the cost of conducting business, supporting the registered companies in the emirate and attracting new investments.”
Also Read: 10 reasons to reject your life insurance claim
According to the initiative, the government will set a classification of the SMEs entitled to receive their dues within 30 days. The initiative is expected to provide SMEs with additional liquidity of Dh1.6 billion per annum.
– The second initiative involves reducing the value of primary insurance for SMEs to the range of 1-3 per cent instead of 2-5 per cent, in order to encourage them to continue supplying to government agencies. Under this initiative, the minimum primary insurance was reduced from Dh40 million to Dh20 million, which involves 80 per cent of SMEs, while the maximum primary insurance was reduced from Dh100 million to Dh60 million, which involves 20 per cent of the establishments.
This initiative too aims to provide greater liquidity for SMEs, while ensuring greater opportunities for them to participate in procurement to government agencies.
– The third economic incentive initiative is on final insurance for SMEs’ performance at government projects. This initiative involves the reduction of the final insurance rate, known as “performance insurance”, from 10 per cent to five per cent on all supplies. Under this initiative, the Government of Dubai intends to prepare a classification of SMEs entitled to the performance insurance reduction.
This initiative is expected to increase the value of the retrieved final insurance from classified enterprises, which account for 70 per cent of the total SMEs, up to Dh100 million over a shorter period of time.
The fourth initiative of economic incentive initiatives focuses on allocating five percent of government capital projects to SMEs. Aimed at members of Dubai SME, the initiative will encourage enterprises to develop their business, enter into major projects contracts with government agencies and form alliances to compete for government projects.
The allocation of five percent of government capital projects to SMEs allows them to get projects worth of up to Dh400 million.
The fifth initiative is the allocation of projects worth Dh1 billion to the PPP, in order to attract the private sector investments, raise the government service quality and reduce the burden on the budget.
This initiative will ensure the optimal utilisation of Law No. 22 of the year 2015 on Public-Private Partnership, as well as the implementation of projects planned by government agencies on time, in line with the Dubai 2021 Plan.
