ABU DHABI: Planned United Arab Emirates legislation aiming to boost the growth of small and medium-sized enterprises will require 10 percent of future federal government contracts to be awarded to small and medium-sized enterprises, the economy minister said yesterday.
“We want to encourage government agencies to support SMEs to meet their purchasing, service and consulting needs,” Sultan bin Saeed Al Mansouri told reporters.
The Minister also said a UAE “development bank”, which he did not name, would assign up to 10 percent of its annual financing to SMEs, because obtaining access to funds was one of their main challenges. In addition, small and medium-sized enterprises will receive tax incentives.
The government is keen to promote small and medium-sized enterprises in order to reduce unemployment among UAE citizens and help them establish their own companies, a step towards diversifying the economy beyond oil.
The law is expected to be enacted within three months or less, Mansouri said, adding that it would boost small and medium-sized enterprises’ contribution to gross domestic product to 70 percent by 2020 from 60 percent in 2011.
Most state spending in the UAE is conducted not by the federal government but by the governments of the country’s seven individual emirates. Mansouri did not say whether the new law would influence that spending.
Reuters
