Motei & Associates

Motei & Associates - Law Firm in Dubai

Motei & Associates – the go-to legal consultants in Dubai that cuts through legal complexities and delivers effective advocacies.

Damac Executive Heights - Office 801
Dubai
United Arab Emirates

Tel:+971 4 435 5959

Email:contact@motei.com

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Halfway Through: Snapshot of Reforms in 2018 | UAE News
Halfway Through: Snapshot of Reforms in 2018
July 5, 2018

As UAE continues to focus on an all-out diversification drive, following is a summary of stimulus and structural reform measures initiated so far in 2018 in the UAE by the federal government and individual emirates to help accelerate non-oil economic growth in the country:

 

  1. Freezing Government Fees for Three Years

In February 2018, during the course of a UAE Cabinet meeting, it was decided that federal government fees in the UAE will not be increased for a period of three years. The move is intended to attract more foreign investments and promote economic and social stability, as well as support the industrial and commercial sectors.

 

  1. Announcement of New Economic Stimulus Plans by Dubai Government

In April 2018, Dubai announced new economic initiatives, including setting up a consultative council that will include international companies, to boost the emirates’ economy. The stimulus plans also include proposals to allocate 20 per cent of government tenders to small and medium-sized businesses, developing low-cost family tourism systems through a “time sharing” system, and enacting a mortgage law.

 

  1. Removal of VAT on Precious Metals at Wholesale Level

In May 2018, the UAE Cabinet adopted a law to roll back the application of a 5 per cent value added tax on the gold, diamond and precious metals market. The step was intended to maintain UAE’s ranking on ease of doing business indicators and stimulate transactions in the three categories. The VAT reversed mechanism will apply to precious metals such as gold, silver and platinum, used in trade in accordance with internationally accepted standards with a purity of 99 per cent or more” at the wholesale level but not at the retail level.

 

  1. Approval of 10-year Residency Visas and 100% Foreign Ownership

In May 2018, the UAE Cabinet approved steps to allow for 100 percent ownership of UAE-based businesses by foreign investors by year-end. The decision is part of a wider change to the system that would grant residency visas of up to 10 years to investors and specialists in scientific, technical, medical and research fields.

 

  1. Long-Term Visas for International Students studying in UAE

In May 2018, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai announced that students that are performing exceptionally well will be eligible for a 10-year residency, while other students can get a five-year visa and dependents will receive a visa extension to help them get started on their career after graduating. Specialists, such as doctors and engineers, will also be eligible for a 10-year residency visa.

 

  1. Announcement of AED 50bn Economic Stimulus by Abu Dhabi Government

Following announcement of new economic initiatives by Dubai earlier in the year, an economic package of Dh50 billion was launched in June 2018, by His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces and Chairman of Abu Dhabi Executive Council, to accelerate the pace of its development and economic growth over the next three years. He tasked the Abu Dhabi Executive Council to develop an action plan within 90 days to determine the aspects of spending and further ordered the exemption of all new licences in the emirate from the pre-requisite of a two-year office, the permission of home licences, and allowing most commercial licences and all services provided by the Abu Dhabi government to implement the online licensing system. The initiatives also aims to stimulate tourism and local economic development, create new job opportunities and provide unique and complementary investment environment to strengthen Abu Dhabi’s competitiveness.

 

  1. No Increase in Dubai Private School Fees for Academic Year 2018-19

In June 2018, the Dubai Executive Council issued a decision directing Knowledge and Human Development Authority (KHDA) not to increase school fees for all private schools in the emirate for the coming academic year 2018-19 to reduce the financial burden on parents. KHDA was further instructed to put the decision into effect immediately by informing private schools and parents.

 

  1. Waiver of Registration Penalty by Dubai Land Department

In June 2018, the Dubai Land Department announced that it will not be imposing penalties of 4 per cent of the value on developers and buyers who have failed to register their units to date. Only the 4 per cent Land Department fee will be applicable on these transactions, and, in future, would be applied as soon as a purchaser booked a unit. The move is aimed to encourage relatively older projects and properties where developers and buyers did not register them even after the handover.

 

  1. Major Changes in UAE Visa Rules

In June 2018, the UAE Cabinet, chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, adopted a number of visa facilitations for visitors, residents, families and people overstaying their visa including (i) replacement of previous mandatory deposit of Dh3,000 per worker by a new insurance scheme; (ii) allowing a two-year extension of the residency period for the dependents of their parents after finishing their university studies; (iii) exempting transit passengers from all entry fees for the first 48 hours; (iv) extension of transit visa for up to 96 hours for a fee of only Dh50; (v) obtaining transit visa will be facilitated by a number of express counters at the passport-control hall across UAE airports; (vi) introducing a new 6 month visa for job seekers who overstayed their visa but wish to work in the country; (vii) granting people overstaying their visa a chance to leave the country voluntarily without a “no entry” passport stamp; (viii) allowing individuals who entered the UAE illegally, a chance to leave voluntarily with a “no entry” stamp for two years given that they provide a valid return ticket; and (ix) allowing individuals wishing to adjust or renew their visa, to do so for a fee without having to leave and re-enter the country.

 

  1. Reduction in Municipality Fees

As part of Dubai’s effort to reduce the cost of doing business and enhance the emirate’s attractiveness as a preferred investment destination, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, on 11 June 2018, ordered to reduce the municipality fees on sales at restaurants and hotels from 10 to 7 per cent. The step is aimed at enhancing Dubai’s competitiveness and status as a major international tourist destination.

 

  1. One-year visa for widows and divorcees residing in UAE

In June 2018, the UAE Cabinet has issued a decision to extend the visa of the widowed or divorced women residing in the UAE and their children for one year from the date of the divorce or the death of the spouse. It grants widows and divorced women and their children a one-year residence without the need for a sponsor and gives women the opportunity to adjust their social and economic status. The resolution will be effective as of the fourth quarter of this year and is part of the continuous efforts to develop government decisions and legislations that cater for larger segments of UAE’s residents and visitors and meets their main needs.

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