The Covid-19 pandemic and the resulting economic slowdown have had a major impact on small and medium enterprises (SMEs) globally. SMEs are the backbone of the UAE economy, contributing about 52 percent of the country’s non-oil gross domestic product, according to an estimate by the Ministry of Economy in December 2019. Even the world’s most flourishing economies were unprepared to face the COVID 19 pandemic that shook the systematic routine of the general world. And during desperate times of an epidemic, the primary goal of every nation to reduce casualties by acting quickly and effectively to protect its citizens. Very few countries in the world were the first to move makers against this dangerous pandemic, and UAE happens to be a frontrunner even in the field of professional crisis management.
Adapting to New Ways of Operation
Working from home and virtual meetings are the new normal now. Businesses are all adapting to new ways of operating, whether it be with staff working from home; having meetings via video conferencing rather than in person; or, needing to redesign their commercial premises to ensure their employees are protected sufficiently. Many business owners and entrepreneurs are racking their brains to think of products and services which will be in demand post Covid-19. They are trying to anticipate what the future working world will look like and come up with that golden nugget of an idea that will take the world by storm.
It’s not just retail that is moving online either, business meetings have been moved online, which just didn’t happen in the UAE prior to Covid-19 as the free video call platforms, such as Zoom and Skype, were not permitted as the UAE’s telecoms providers provided their own paid-for versions. However, during Covid-19, these services have been offered to businesses for free. It is yet to be seen whether this gesture will be continued post Covid-19 or not. If free video calling remains available after Covid-19, then surely this has to be a huge benefit for entrepreneurs and businesses in the UAE as it will reduce telecoms costs whilst leveling the playing field as such services are free in many countries globally. It will reduce the cost of doing business.
Help from the UAE’s Government
Keeping the economy alive right now is critical for governments globally. The UAE is no different. It launched stimulus packages and assistance to companies on both federal and Emirate levels early on to assist businesses through the crisis in order to stay in operation rather than go under. Under the leadership of H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, the government released an AED 1.5 Billion economic stimulus package to support business entities in Dubai amidst the COVID-19 pandemic crisis. This package also consists of 15 unique initiatives targeted at various industries such as the travel and tourism industry, retail sector, commercial sector, and trade industry. As an added relief package for businesses in the UAE, the Central Bank of the United Arab Emirates (CBUAE) has announced several incentives and financial aids for companies that would require any monetary funding to mitigate the impact of the pandemic on the business.
Even before the World Health Organization (WHO) had officially announced COVID 19 as a Global Pandemic, the government of UAE had started acting on precautionary methods to stop the dangerous spread of the disease. The opening timings in public areas such as shopping malls, offices, and tourist attractions were reduced, encouraging more and more citizens to stay at home. The government implemented a strict legal system for nationals that violated the lockdown by charging hefty fines as well as legal consequences. On the alternative, for expatriates living and working in UAE, the government announced that any violation of the lockdown regulation would lead to direct deportation from the country.
The Silver Lining
Businesses across different sectors have been forced to readapt their plans in response to the social distancing measures put in place to contain the spread of coronavirus. Business sectors like tourism, aviation, e-commerce, and hospitality are the worst hit. However, some businesses are thriving during the pandemic as they experience a spike in demand for their products and services.
For some sectors and specific lines of business, the effects may, however, be positive. Manufacturers and retailers of medical supplies, such as facemasks and hand sanitizer, benefitted from boosted demand and higher prices as supply tightens. Depending on the scale of the outbreak and its persistence, hard infrastructure in the health sector also observed more investment. While no COVID-19 vaccine yet exists, demand for medicines to treat associated illnesses, such as antibiotics, also boosted local pharmaceutical manufacturers.
Another such market segment is the e-Commerce business. The COVID-19 is boosting the e-Commerce sector in the UAE as consumers are changing their behavior by avoiding going to the stores. The situation in the outside world is rapidly evolving as we struggle to stay safe in our home. The number of people deemed safe to gather in a single place has dwindled from thousands, hundreds, to ten. Restaurants, shopping malls, bars, and public spaces in general in many key cities, including the UAE, are shut down. In the meantime, many office employees are facing new challenges of working remotely full time.
In addition to e-commerce, general trading, project management & building painting are the top business sectors for the issuance of new business licenses in the UAE in May 2020. These are followed by construction and repair & maintenance activities and then the always popular food & beverage related activities.
How can Riz and Mona Consultancy help your Business during the COVID-19 Outbreak?
The sudden outbreak of the pandemic had created panic among many business owners but through our tailor-made services, expert consulting, and finesse, we try to provide our clients with assistance to set up business in Dubai and various locations across UAE. We understand that the Corona Virus outbreak has impacted the economy and led to investors and entrepreneurs deferring their business setup plan by a few weeks. We, at Riz and Mona Consultancy, aim to tackle to issue and help you out in the current global scenario. We have adjusted our business setup procedure so that you can register your business from the convenience of your home. Contact us today to book your appointment with our company formation experts.
