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Covid-19: Dubai free zones offer stimulus package with rents postponed, fines cancelled

Covid-19: Dubai free zones offer stimulus package with rents postponed, fines cancelled

Rents will be postponed for six months while temporary contracts will be handed out

Dubai has announced an economic stimulus package for all its free zones to help companies deal with the impact of the Covid-19 pandemic on the economy.

The initiative taken by the Dubai Free Zones Council complements the Dhs1.5bn package announced recently by Dubai to reduce business costs and improve the financial liquidity of companies operating in the free zones, official news agency WAM reported.

The package includes five key elements:

* Postponement of rent payments by a period of six months

* Facilitating installments for payments

* Refunding security deposits and guarantees

* Cancellation of fines for both companies and individuals

* Permitting temporary contracts that allow the free movement of labour between companies operating in the free zones for the rest of the year

The steps announced are also aimed at helping workers who have been asked to take unpaid leave by facilitating their re-employment in jobs in Dubai, a statement said.

Entities involved with the stimulus package include: Dubai Silicon Oasis Authority, Dubai Airport Free Zone Authority, Jebel Ali Free Zone, Dubai World Trade Centre, Dubai International Financial Centre (DIFC), Dubai Development Authority, Dubai South, Meydan City Corporation, and Dubai Multi Commodities Centre.

Specifically, DIFC proposes implementing five initiatives over the next three months, including waiving annual licence fees for new companies during the next three months, and a 10 per cent discount on renewal fees for existing licenses during the same period.

It will also postpone payment plans for all commercial properties owned by DIFC Investments for a period of six months.

DIFC will also reduce its ownership transfer fees from 5 per cent to 4 per cent for any property sale that occurs within the authorised three-month period, if ownership transfers are registered at DIFC within 30 days after the end of the three-month period.

Under the package presented by Dubai Development Authority (DDA) and Tecom Group, companies can postpone payments and new firms can postpone their lease periods and cancel their registration fees for a period of six months.

They can also cancel all fines on expired licences and other financial and administrative fees. The package also offers flexible fee payments, including building licences and services, in addition to refunding security deposits and guarantees.

The package offered by Dubai Aviation City Corporation and Dubai South including waiving fees on residential land and expired licences, facilitating payments through monthly checks and exempting licencing fees for the first year.

Meanwhile DMCC has also offered exemptions on a wide range of fees for its 17,000 registered companies, including:

· Waiver for late licence renewal penalties, the office sharing permit fee and company reinstatement fees
· Waiver of all flexi desk and DMCC business centre penalties until the end of 2020
· 30 per cent discount on licence renewal
· Waiver of outdoor area rents for JLT retailers with existing contracts, where DMCC is the building owner/landlord
· Waiver of rent for two months for commercial establishments requiring a temporary closure, where DMCC is the building owner/landlord
· A three-month suspension of rent for Flexi Desk and DMCC Business Centre tenants renewals or monthly/quarterly instalment with no discount

Incentives for new registrations, and companies already in the process of registering in DMCC include:

· 80 per cent reduction on the total company set up fee if shareholders are residents of JLT
· Up to 50 per cent reduction on the total company set up fee, along with a Flexi Desk for one year
· Flexible payment options for new DMCC Business Centre tenants
· Complete digital process for business set up

These measures will apply from 1 April 2020 until 30 June 2020 (unless stated otherwise).

Dubai free zones contribute up to 33 per cent to the emirate’s GDP, providing a base for 44,985 companies as well as 389,336 jobs.

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