Dear Friends and Clients,
This time you will find in our newsletter the main incentives offered by individual Emirates and especially the Freezones.
We have also taken up some areas of law that can contribute to your decision making.
A lot is written and reported about restructuring, cost reduction, reduction of wages etc. As an “old insolvency specialist” (over 30 years of experience in insolvency law) I would like to introduce you to the 2 main laws in the UAE on corporate bankruptcy and private insolvency. There is no shame in falling into insolvency, especially not in times like these. And when golf became popular in Continental Europe, it was said that a golf course only becomes lucrative after 2 bankruptcies, when all debts have been paid off.
So – when that time comes – take this opportunity as an advantage. You can “shake off” your debts with a quote freely agreed with the creditors and rebirth from the ashes like Phoenix. And the UAE insolvency law also decriminalizes uncovered checks, so don’t be afraid of the prosecutor!
We will be happy to advise you in detail. I will hold two webinars on this subject, namely on May 12, 11 am in English – register please with the Austrian Business Council office@austrianbc.ae and on May 27 at 8 pm in German – register please with the German Emirates Club sarah.graf@german-emirates-club.com.
As you can read in our newsletter, the Southeast Asian states are also trying to keep their sheep in the dry, i.e. the investors in the country. Residence permits can be obtained quickly and inexpensively in Myanmar and Cambodia, including a bank account.
The banking system in the UAE is still a major obstacle for many companies. We now have good contacts to banks outside the country, ready to open accounts for UAE entities and residents, which we can recommend to clients.
If you look at the current situation from a different perspective, you can learn – and win – a lot from it,
Yours,
Theodor Strohal
Abu Dhabi: Economic stimulus package revealed
The Abu Dhabi Executive Council (ADEC) has announced 16 new initiatives under Ghadan 21 to help small and medium enterprises and local companies. It has already received a good feedback and praises from entrepreneurs and companies based in the emirate. Here are the initiatives under Abu Dhabi’s economic stimulus package:
- No annual registration fees for commercial vehicles until the end of this year.
- No toll gate tariffs for all vehicles until the end of this year.
- No individual or commercial real estate registration fees until the end of this year.
- No Tawtheeq fees this year for commercial and industrial activities.
- AED 5bn to subsidize water and electricity for citizens and commercial and industrial activities.
- Subsidize for electricity connection fees for startups for this year.
- AED 3bn for SME credit guarantee program.
- Performance guarantees for projects up to AED50 million waived for startups.
- New committee to review lending options to support local companies.
- Suspending bid bonds.
- Industrial land leasing fees reduced by 25% for new contracts.
- Industrial and commercial penalties waived.
- Payment of approved government invoices within 15 working days.
- Up to 20% rebate on rentals for the restaurant, tourism and entertainment sectors.
- Tourism and municipality fees for the tourism and entertainment sectors suspended for this year.
- Establish AED1bn market maker fund to enhance and sustain balance between supply and demand for stocks.
Stimulus packages are to be announced soon for SMEs and local companies. The leader of Abu Dhabi declared that all approved capital expenditure and development projects in the emirate will continue as planned. Lending options and easing investment laws and regulations will be provided to support SMEs.
Stimulus packages and offers by free zones in UAE
Free zones all over UAE have initiated several measures to implement as COVID-19 hits the UAE. They aim to be able to help maintain economic stability for their clients.
- Hamriyah Free Zone offers special promotions of office and warehouse packages until 30 June 2020. Establishment and expansion of business can now be done remotely.
- RAKEZ has launched Office Spring Packages with discounts up to 35% guaranteed for life. There is also a limited time offer for startups of up to 25% discount also guaranteed for life. Most transactions can be done through Portal 360. Client Support Booster has been put in place for SMEs and businesses in the Industrial sector with an allocated support fund of up to AED50 million. The list of incentives and discounts can be found below.
SME Client Support Boosters for RAKEZ’s co-working and office clients:
- 15% discount on total renewal package
- 25% discount on new dependent visas
- 100% waiver of late renewal penalties
- 100% waiver of cheque postponement fees
- 100% waiver of package downgrade fees
- 100% waiver of activity change fees
- 100% waiver of security deposit for new visa requests
- Flexible instalment options
Industrial Client Support Boosters for RAKEZ’s industrial clients:
- 50% discount on license fee
- 100% waiver of cheque postponement fees
- 100% waiver of late renewal penalties
- 100% waiver of all RAKEZ gate access fees
- 100% waiver of security deposit for new visa requests
- 25% discount on new labour accommodation requests
- 25% discount on new dependent visas
- Flexible instalment options
- Ajman Free Zone introduced packages as listed below with various options for different office and warehouse spaces.
– Freelance License – From 1645 USD – 6000 AED
– Pioneer License (20-30 years old for investor) – 1370 USD -5000 AED
– Commercial License – Starting package Price 3160 USD -11535 AED
– General Trading – Package Price 4600 USD – 18735 AED
– Professional Service License – Package Price 3900 USD – 16135 AED
– Industrial License – 2500 USD – 9100 AED plus warehouse fees according to the size
Stimulus packages are also in place which includes: 25% less on labor accommodation rent fee, installment payment plans, and e-channel smart service warranty subscription costs to be managed by AFZ.
- Umm Al Quwain Free Trade Zone organized a webinar regarding UAE Labor Law issues which may arise during the COVID-19 pandemic.
- Sharjah Media City Free Zone introduced discounted fees of up to 35% discount for a limited period as listed below.
- 2 Free additional activities with all license packages. This is applicable for zero visa and all visa packages.
- 50% discount on license fees for Media packages starting from AED 5750 for zero visa and one visa package AED 9425.
- During renewals there won’t be any additional charge for these additional activities.
- E-channel deposit waiver of AED 5000 for all visa packages on new licenses.
- Discount of 20% on 2 years’ package, 25% on 3 years’ package and 35% on 5 years’ package.
- Ability to combine General Trading and Service activities under the same license for all packages.
- ShamsZero Visa Package Promotion – up to 3 activities in one license, 100% foreign ownership, shareholders are not required to be physically present and online registration process (no visa included in the package).
- 20% off on license fee for 1-visa package
- 35% off on multi-year packages
- 20% off on Shams fee for Concierge Services
Terms and conditions apply on the above offers and promotions introduced by the mentioned free zones.
JAFZA Companies: up to 70% cut in fees
DP World announced that Jebel Ali Free Zone fees were cut by around 50 to 70 percent. Slashed rates include registration, licensing, and related administrative functions. Other online services will also be offered for free. According to the CEO and Managing Director of DP World, the initiative is designed to create value and opportunities for the companies to channel their resources to support their activities sustainably.
RAKICC Business Stimulus Measures
RAK ICC has introduced Business Stimulus Measures to support clients and businesses during the COVID-19 crisis. Discounts are offered from 20 Apr 2020 until the end of June 2020. The measures are as follows:
– 50% waiver Agent Registration Fee
– 50% waiver New Incorporation
– 25% discount Premium Packages
The Amnesty Program for restoration of companies has been extended up to 31 December 2020. Companies that have not renewed will not be struck off but will instead remain inactive on the register and normal penalties for late renewal will apply.
Far East
Myanmar: Relief measures for businesses and investors
The government of Myanmar has implemented relief measures to help affected businesses and investors by the COVID-19 pandemic:
– The Ministry of Commerce lifted import license fees for all medicines and medicinal raw materials.
– Application license fees for startups will be charged 50% less. The new fee structure will be implemented from April 20 onwards and is subject for review and revisions to be advised by authorities.
– Microfinance and non-bank financial institutions were instructed to delay repayments of SMEs and low-income workers affected by the pandemic.
– Car dealers are granted 2-month import license extension.
– Acceleration of approvals for investments in labor-intensive and infrastructure projects, healthcare and medical equipment businesses, pharmaceutical enterprises, and healthcare service providers.
– Income and commercial tax payments due in the second and third quarters of the fiscal year have been extended and 2% advance income tax exemption up to the end of the fiscal year.
– The Central Bank of Myanmar has cut the policy interest rate by 0.5 percentage points on March 12 and a further 1 percentage point effective from April 1.
– A COVID-19 Fund worth K100 billion has been allocated to be disbursed as soft loans to affected businesses in the garment and tourism sectors, and SMEs. The government has approved more loans for business affected by the current crisis.
Indonesia: Indonesia: Set to give additional tax breaks
Indonesia to issue tax breaks on sectors affected by the pandemic. The sectors include food, trade, electricity, oil and gas, mining and coal, forestry, tourism and the creative economy, telecommunications, logistics, transportation, and construction, in addition to manufacturing companies that was previously announced. The incentives will be in the form of income tax exemptions, import tax deferrals and 30 per cent corporate tax discounts.
Cambodia: Government set to finalize antitrust, competition draft law
The Government of Cambodia is set to finalize a draft law on antitrust and competition to be submitted to the National Assembly for approval. According to a senior official from the Ministry of Commerce, the law will be very useful for businesses to promote fair trade relations and increase economic efficiency. The last chapters of the draft law are being finalized to be taken to the plenary session of the Council of Ministers before submitting to the National Assembly.
Thailand: Because of pandemic, Ministry urges delay of PDPA
The Digital Economy and Society (DES) Ministry in Thailand is seeking for postponement of the implementation of the Personal Data Protection Act (PDPA) which is set to be enforced next month. According to DES, the pandemic and lack of preparedness among state and private organizations should be taken into account to postpone the enactment of the law. Members of the National Cyber Security Committee has also suggested for the suspension of the enforcement of some or all sections of the PDPA.