Dubai is gearing up to host the first ever World Expo to be held in the Middle East, Africa and South Asia – Expo 2020. The six month long Expo, expected to attract approximately 25 million visitors from 192 countries, will create endless opportunities for the SME sector.
Expo 2020 has committed to awarding 20% of the value of all contracts to SMEs, worth approximately AED4.7 billion during the pre-Expo 2020 phase and has already invested AED 2.4 billion in the SME sector. Furthermore, it is set to issue a new set of tenders that will depend mainly on SMEs for delivery. Sectors such as leisure and hospitality, real estate and construction, transportation are crucial in the pre-Expo 2020 phase and will witness significant inbound investment.
In order to support the growth of the SME sector, in line with the Dubai Plan 2021, the government has introduced new initiatives and policies.
– With regards to payment terms, SME suppliers to government agencies will be paid within 30 days instead of 90 days. The initiative is expected to provide SMEs with additional liquidity of AED1. 6 billion per annum.
– The value of primary insurance for SMEs has been reduced to 1-3 per cent instead of 2-5 per cent. Furthermore, the minimum primary insurance has been cut from AED 40 million to AED 20 million covering 80 per cent of SMEs, while the maximum primary insurance has been cut from AED100 million to AED60 million.
– The final insurance rate, known as “performance insurance,” has been cut from 10 per cent to 5 per cent on all supplies.
– 5 per cent of government capital projects to be allocated to SMEs, which will allow them to receive approximately AED400 million worth of projects.
– The government must allocate up to AED1 billion to public-private projects.
The opportunities for business at the Expo 2020 are not limited to SMEs based in the UAE. To allow businesses from around the world to apply for Expo 2020 related projects, in November 2018, it launched an Online MarketPlace (OMP). The OMP allows businesses from all over the world to register and is designed to increase the reach and visibility of the SMEs and provides them with a platform to advertise their products and services, interact with their peers and access business opportunities from local and regional suppliers, Expo 2020 and its partners, as well as international participants. Additionally, SMEs who are supplying products and services to Expo 2020 will not be required to provide bank guarantees to conduct business.
UAE based trade finance banks have also introduced new packages to support more small-to-medium businesses. Emirates NBD recently introduced a new banking package specifically for local SMEs and start-ups who are working with Expo 2020. The package includes preferential pricing and privileges on transactions, working capital, trade finance, foreign exchange and commercial loans.
If you are an entrepreneur looking to explore business opportunities ahead of Expo2020, talk to CREATIVE ZONE’s business setup advisors to learn more about Mainland, Free Zone and Offshore company formations in the UAE.
We offer free zone licenses across the UAE in:
Fujairah Creative City Free Zone;
Sharjah Media City Free Zone (SHAMS);
Ras Al Khaimah Free Zone (RAK);
Rak International Corporate Centre (RAKICC);
Ajman Free Zone (AMC);
Khalifa Industrial Zone Abu Dhabi (KIZAD);
Dubai Multi Commodities Centre (DMCC);
Dubai World Trade Centre (DWTC);
Dubai Design District (D3);
and Abu Dhabi Global Markets (ADGM)
For further information and impartial advice on the benefits related to license options for the growth of your business, call 800-LICENSE or email [email protected]