An important reason that entrepreneurs and corporations from around the globe are choosing Dubai as their desired business location is the type of facilities they receive here to establish and run their businesses. For this purpose, the government of Dubai and its departments are always ready to assist businesses and try to minimize their problems. For this purpose, announcements are made by the government in order to facilitate businesses from time to time. They are even ready to reduce or cancel different fines and penalties if these are creating problem for businesses and are proving as hindrance for growth of various sectors.
The most important department in Dubai related to company formation in Dubai is the Department of Economic Development (DED). This department is associated with formation of company in Dubai mainland and also plays important role for developing different rules and regulations for better business environment in this emirate. In order to provide relief to companies, DED announced previously to waive 50% fine on businesses as an initiative for ease of doing business. This initiative is proving quite beneficial for companies especially in the situation where companies are feeling pressure amid 5% VAT that they are required to pay since last year.
In order to provide relief to several sectors, Dubai has provided several incentives in last couple of years like reduction in license fee by free zones, increasing number of VAT-fee free zones, decreasing municipality fee, discounting fee for new licenses and freezing educational fee. This step by DED is also a part of this initiative for businesses in order to encourage them while facing VAT. This incentive will also improve business competitiveness in Dubai as most of the violations are committed by startups as they are usually unaware about them. It will assist them in getting experience in one of the world’s best business jurisdictions.
According to statistics, large numbers of companies managed to save AED23.4 million ($6.3 million) last year in 2018 thanks to this 50% reduction in fines in 2017-18. During this period, DED received more than 4,650 fines settlement requests.
Due to positive response of this fee waiver, DED has decided to continue this scheme in 2019 also. According to details, 50% fine waiver scheme will only be available to businesses after violation of any business rule for the first time in a business year.
Previously, the customer was required to request fee waiver if he is eligible for this. But according to the new system, now entrepreneurs will receive a text message of their violation and the 50% fee waiver will automatically be included in the fine. This will further simplified the procedure and make it easier for traders to spend time on their businesses instead of submitting request for fee reduction.
This is a very important step by DED as it will surely boost the morale of businesses and assist them in trying to prevent any violation in future if they commit a single one in a year. We at Riz & Mona can guide you in getting complete information regarding new rules devise by the government at the time you want to setup your business in Dubai.