The UAE Ministry of Finance has announced that local Small and Medium-sized Enterprises (SMEs) can now register in the Federal Register of Suppliers free-of-charge in an effort to support Emirati startups. According to the terms, the SMEs must be owned by UAE citizens and must register with the Federal Register during the first two years of their establishment. The Ministry’s offer follows the establishment of the UAE’s Council of Small and Medium-Sized Enterprises and Projects and the UAE Cabinet decision to allocate 10 percent of government spending towards supporting SMEs.
The Federal Register of Suppliers allows registered SMEs to deal with all Federal Ministries within the UAE by being able to review the latest tenders and practices issued by them. It permits suppliers to purchase tenders directly via the internet, obtain pricing requests and entering prices in accordance with each item.
The UAE Cabinet’s decision allocates purchase and tender requests as well as direct contracting for SME owners for the first two years from the date of the company’s establishment.
The decision also specifies that funding will also be allocated for purchases and tenders including publications, stationery, gifts and electronics for up to AED 200,000 (US$ 54,500) per contract or transaction, as well as direct transactions up to AED 15,000 (US$4,100) for SMEs within the first two years of establishment.
SMEs have been identified as critical for the economic and social development of emerging markets, playing a major role in creating jobs, developing economic growth, and fostering social stability. The UAE’s new SME law grants local startups exemptions from customs tax for equipment, raw materials and goods for production purposes, plus the payment of bank guarantees that companies must pay when hiring new employees.
The latest statistics show that the UAE has around 300,000 SMEs, which represent 86 percent of jobs in the UAE market. These SMEs contribute to 60 percent of the UAE’s GDP. The National Agenda, established to help the country achieve its UAE Vision 2021, aims to ensure that SMEs’ contribution to non-oil GDP reaches 70 percent by 2021.
Source: WAM, Ministry of Finance