* Sheikh Mohammed announced changes to SME and mortgage laws
* Decree (31) will help developers and owners obtain financing from trusted financial institutions
* Law No. 16 lays ground for the promotion of entrepreneurial projects and SMEs
Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, has announced changes to laws related to small and medium-sized enterprises (SMEs) and mortgage in this week.
Mortgaging granted lands
Decree No (31) of 2016, issued by Sheikh Mohammed, defines the granted lands as the lands owned by the government and granted to the beneficiary for residential, commercial or industrial purposes.
The Decree states that the beneficiary may mortgage the land to any bank or financial institution registered duly in Dubai. The mortgage is legally binding for all concerned parties if the monies arising from the pledge of the commercial and industrial land will be invested to achieve the purposes of the original grant; if the monies arising from the pledge of the residential land will be invested in maintaining, expanding or replacing the building and the pledge is registered duly as per Law No (14) of 2008 Concerning Mortgages in the Emirate of Dubai.
The Decree also permits mortgaging against the commercial or industrial property’s income, and the mortgagee may manage the property and receive its income until the mortgage is satisfied.
Sultan Butti bin Mejren, Director General of the Dubai Land Department, says the law is a key legislative initiative that will have a positive impact on the real estate market.
Bin Mejren adds that the law will help developers and owners obtain financing from trusted financial institutions and it also gives the Dubai Land Department further mechanisms to regulate the real estate market.
Sheikh Mohammed has issued Law No. 16 to amend some provisions of Law No. 23 of 2009 on Dubai SME establishment, according to state news agency WAM.
With the amendments, the new law lays ground for the promotion of entrepreneurial projects and SMEs in the emirate. It also stipulates providing the appropriate environment for public and private sector investment projects.
The law also enables Dubai SMEs to issue licences to their members. The member must pay an annual fee of AED1,000 for the first three years of the licence and AED2,000 a year for the fourth and fifth years, and shall be liable to pay any other fee during the first five years.
The law states that citizens of other GCC States will be treated in the same way as the UAE citizens in matters relating to membership, provided they comply with requirements laid down by Dubai SME.
It also states that all entities owned by the Government of Dubai, or in which it has ownership of more than 25 per cent, are committed to exempting Emirati entrepreneurs from any registration fees for being a preferred supplier and allocates ten per cent purchases to the UAE nationals.
Also, five per cent of the rental spaces will be allotted for outlets owned by Dubai SME members and priority will be given to bids submitted by Dubai SME members if the bid value does not exceed five per cent than the best bid submitted.
It also states that a minimum of 20 per cent reduction on rentals to Dubai SME members during the first three years of the lease.