Dubai Free Zones Council announced late yesterday a business stimulus package that complimented the previous packages announced by the UAE Government and the Emirate of Dubai. The package included deferral of rent payments for up to six months, reimbursement of guarantees and security deposits, facilitating financial payments through easy installments on a monthly basis, cancellation of penalties and allowing the transfer of labor between free zones provided necessary arrangements and contracts are in place with the employees.
Various free zones issued subsequent press releases to support the above including:
- DP World which includes also Jebel Ali Free Zone (JAFZA), National Industries Park (NIP) and Dubai Cars & Automotive Zone (DUCAMZ) confirming their support to the above and waiving fines on expired trade licenses for companies operating in the above free zones and waiver of license fees for new registration for the first year.
- DDA and TECOM Group announced a set of initiatives including deferral of payments, postponement of lease and registration fees for up to six months for new registrations, cancellation of fines on expired licenses and other financial and administrative fees, flexible fee payments and refunds of security deposits and guarantees.
- Dubai Aviation City Corporation and Dubai South issued a package of four initiatives including waiving fees on residential land and expired licenses, facilitating payments through monthly checks and exempting licensing fees for the first year. Dubai South further noted their readiness to issue additional offers in due course.
- DMCC joined all other free zones by confirming their commitment to offer a reduction of registration fees by 50% for new companies and 30% discounts for current companies on renewal and amendment fees.
- DIFC Governor issued this morning a press release confirming the center’s commitment to offer support during this time to its clients. The DIFC package included:
- Waiver of annual licensing fees on new registrations during the next three months.
- 10% discount of renewal fees for existing license holders in the DIFC that are due to renew their licenses during the next three months.
- Deferred payments in respect all properties owned by DIFC Investments for a period up to six months.
- Reduction on property transfer fees from 5% to 4% for any sale of property (or any part thereof) that will take place within the three-month period.
- DIFC will facilitate the free movement of labor in and out of the DIFC to other free zones, provided that the employers concerned have the necessary arrangements and contracts in place with their employees.
There is no doubt that this will bring huge comfort to free zones companies in Dubai and will allow them to be ready and able to survive the short-term impact of the COVID-19 outbreak. It is useful at this stage for all companies benefiting from these packages to undergo an internal review of their overall operations to make sure that they are aware of the business risks threating their continuity and future. This includes their overall liabilities, liquidity, relations with employees and relations with clients and suppliers. Maintaining transparency at this stage is key in ensuring that the trust factor between all of these parties is maintained. This in itself is sufficient to create a supportive environment for all businesses to pursue moving forward.
Authored by Partner Rima Mrad