UAE slashes more government fees to boost competitiveness and spur economy

Cabinet decision to cancel or reduce almost 1,500 government fees by up to 50 per cent

Abu Dhabi, U.A.E., February 12, 2019. Sunny but chilly weather at the Corniche. -- (Probable Big Picture) Watersports enthusiasts enjoy the beautiful weather. Victor Besa/The National Section: NA RepoShow more

The UAE will reduce or cancel more federal government fees in another round of economic measures to ease the cost of doing business, boost its competitiveness and enhance its appeal to investors.

The cabinet issued a decision to cancel or reduce certain charges by up to 50 per cent on about 1,500 federal services for three ministries starting on July 1, according to a statement by the Ministry of Finance on Thursday. The measure was implemented following a study of fees compared to international best practices.

"The Ministry of Finance proposed immediate measures to reduce fees by setting a fixed ceiling on incoming revenue," said Younis Haji Al Khoori, undersecretary of the Ministry of Finance. "This will enhance business competitiveness and encourage innovation in services."

The move comes as part of a series of reforms aimed at attracting foreign investors, creating jobs and diversifying the economy away from oil. The UAE has allowed 100 per cent foreign ownership of companies in 13 sectors from manufacturing to renewable energy, eased visa restrictions and provided incentives for small and medium enterprises (SMEs).

The latest measure will see 1,200 fees reduced or cancelled at the Ministry of Interior, 80 at the Ministry of Economy, and 200 at the Ministry of Human Resources and Emiratisation, according to the statement.

The Ministry of Finance analysed the findings of the fees study to make recommendations for an initiative that sees "the gradual transformation of the existing government revenue system, based on services charged, into a tax-based system".

The reduced fees at the Ministry of Interior include the issuance or renewal of security licences, security guard licences and surveillance systems licences, the statement said. The list of cancelled fees includes business and industrial licensing services, as a boost for investors and small businesses.

The Ministry of Economy's reduced fees cover renewing registration of foreign subsidiaries, registration and renewal of foreign trademarks, sale or acquisition services for foreign companies and dispute services. The list of cancelled service fees includes those "that will reduce financial burden on companies operating in the country", it said.

The Ministry of Human Resources and Emiratisation includes more than 200 services, such as issuance and renewal of work permits, the amendment of employment contracts, training permits within the country, work permits outside the nation, permits for workers to move from one facility to another, and other services that help support companies' competitiveness and enhance their ability to grow and invest in the market.

"These decisions are expected to further enhance the business environment in the UAE, empower entrepreneurs and encourage them to create new investment opportunities in the UAE." the Ministry of Finance said. "The move will also contribute to the creation of more jobs in the country and strengthen its competitive standing as a global business hub."

The UAE edged up two notches to fifth place in the IMD World Competitiveness Rankings out of 63 countries. In its peer group of countries across Europe, the Middle East and Africa, the country rose to second place from fourth.

The easing of government fees follows the broader drive under Ghadan 21, a three-year project to support the private sector.

Ghadan 21 - which translates as "tomorrow" from Arabic - encompasses a series of sweeping reforms aimed at stimulating investment, creating jobs, encouraging innovation and improving the overall quality of life for Abu Dhabi's citizens. Worth Dh50 billion, the investment project was announced last summer by Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces.