Dubai is exempting companies from administrative fines in a fresh effort to stimulate business, which has been dampened by new taxes and slumping asset markets.
A decree by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum cancels fines imposed by the Department of Economic Development through the end of 2018, the DED said on Tuesday. It levies over 60 different fines for commercial violations, some worth thousands of dollars.
“This decree is a positive step in promoting economic growth and consolidating Dubai’s position as one of the important commercial and economic centres internationally,” said Omar Bushahab, head of the DED’s business registration section.
Overall, Dubai appears to be growing solidly, partly because of government spending on preparations for the emirate to host the 2020 World Expo; the International Monetary Fund expects gross domestic product to expand over 3.0 percent this year.
In March, Dubai’s government pledged not to raise official fees for three years to keep the economy internationally competitive.
Last week the UAE cabinet, chaired by Sheikh Mohammed, said it would permit 100 percent foreign ownership of some UAE-based businesses, up from the current 49 percent limit, and grant long-term residency visas of up to 10 years to foreign investors and some professionals.
This triggered a brief rally in Dubai’s stock market but it has since given up almost all its gains, because details of the reforms have not been revealed and it is not clear they will have a long-term effect in luring investment.
“New expatriate visa and ownership rules announced on 20 May are small positives for the long-term, non-oil, economic outlook of the UAE,” investment bank Exotix said.
“But these non-oil sectors, outside the luxury segment, remain constrained by high costs and regional geopolitics. Population growth has decelerated substantially since 2012.”
It added, “The increase in oil prices probably matters much more than these new rules in the foreseeable future, in terms of both the funding for government-related spending and the inbound investment flows from regional wealth tied to oil.”
Dubai cancels corporate fines in fresh effort to boost business