Government To Boost Dubai’s Status As Center For SME Growth; Dubai Will Become Progressive Base For SMEs
The government is coming up with new initiatives so as to simplify the carrying business and to minimize the cost of doing business in Dubai. With these initiatives, Dubai’s economy is entering into a new development stage. Dubai is on its way to becoming a progressive base for all small and medium-sized enterprises (SMEs).
The Expo 2020 project of Dubai focuses on offering new opportunities to SMEs. World Expo first of its kind will be hosted in Africa, the Middle East, and South Asia. The main goal of the Expo 2020 is to give 20 percent of all contracts value to SMEs. As of now, Expo 2020 has invested around AED2.4 billion in the SME sector and is planning to launch a new round of tenders; these tenders will mostly rely on SMEs for delivery.
The important agency that is supporting the growth of SMEs in Dubai is ‘the Dubai SME’- it is the Department of Economic Development agency responsible for developing the SME sector in Dubai.
Dubai SME CEO, Abdulbaset Al Janahi, mentioned,
“Dubai offers a unique model for creating a vibrant SME sector. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has set ambitious development goals in the 50 Year Charter including the establishment of the world’s first virtual trade zone targeting 100,000 companies, as well as the transformation of universities into free zones in order to promote economic growth and innovation. These goals offer exceptional opportunities for promising small and medium enterprises.”
He later mentioned, Dubai SME will continue to provide more opportunities to its members and also boost SME capacity by offering training and consultation and also support collaborations with the private sector and the government. Financial support is one of the important elements of Dubai’s offerings for small-medium sized enterprises.
The objective of the Dubai Plan 2021 is to increase the GDP contribution of SMEs to 45 percent within 2021.
Department of Finance Launches New packages
Back in May 2019, Dubai’s Department of Finance introduced five new incentive packages. These packages were launched to assist SMEs and to promote public-private collaborations.
The first incentive package, within this package, SME suppliers to government departments will receive a payment within a month and need not wait for 90 days for payments as earlier, so as to offer SMEs with more liquidity of AED1.6 billion per year.
Previous, SMEs primary insurance value was between 2 to 5 percent and within the second initiative, the value has been reduced between 1 to 3 percent.
Within the third initiative, ‘performance insurance’ – the final insurance rate has been reduced to 5 percent from 10 percent on every supply.
The fourth initiative allows 5 percent of government capital projects to be provided to SMEs.
The last and fifth initiative consists of providing AED1 billion to public-private based projects.
The first incentive package was launched in 2018 and Dubai had introduced various steps to minimize costs and promote business reliability and it is also building a new specific SME cluster that aims at business innovation.
Recently, Dubai SME, Merras and the Department of the Economic Development collaborated to introduce Al Seef SME District- an innovation center across Al Seef.