Law No.1 for 2020 on small and medium-sized enterprises, SMEs, in Ajman.

Updated: Jan 23

H.H. Sheikh Humaid Bin Rashid Al Nuaimi, issued Law No.1 for 2020 on 30th March 2020 on small and medium-sized enterprises, SMEs, in Ajman.


  • The law aims to promote economic growth, support local SMEs, and encourage the country’s citizens to engage in economic activity and create more job opportunities.


  • The law stipulates several definitions related to establishments and projects considered SMEs, including those noted in Cabinet Resolution No.22 for 2016 or any other relevant federal legislation.


  • The law also identified projects, establishments and programmes categorised as an "SME Programme" by the Department of Economic Development, while the department’s chairman will determine the required controls and regulations related to the coordination between the programme and other relevant national initiatives and institutions. Establishments wishing to join the programme must submit an application, according to procedures established by the department.


  • The law stipulates that projects registered under the programme must follow a set of conditions. They must be fully owned and supervised by UAE nationals, registered and based in the emirate, and their licences must be valid for three years.


  • Owners must also not have more than five commercial licences, and their establishments must not benefit from exemptions granted by the Khalifa Fund for Enterprise Development or any other similar local funds.


  • The law also stipulates that the Department of Economic Development, in exchange for the programme’s registration, will collect a registration fee for the first five years only of AED1,000 for the first three years and AED2,000 in the fourth and fifth years, provided that members are exempt from all local fees charged by government authorities and the Ajman Chamber of Industry and Commerce, with the exception of public cleaning services fees included in Emiri Resolution No.5 for 2017.


  • The law specifies a set of facilitations and incentives for the programme’s members, including allocating 10 percent of contract tenders and auctions undertaken by government authorities annually to meet their purchasing, services, consulting and priority needs, in the event that the increase or decrease in the value of financial offers does not exceed 5 percent of the best acceptable offers, and those renting real estate owned by government agencies will be given discounts of no less than 10 percent of estimated rental values decided by leasing agencies during the first three years of their registration in the programme.




Training programmes


  • They will also have access to free training programmes organised by government authorities, be given priority when participating in exhibitions organised by the same authorities, and have access to relevant federal programmes, institutions, funds, facilitations, incentives and benefits provided by the department, in coordination with relevant bodies.


  • The law obliges the programme’s members to be owned by UAE nationals who must notify the department within 30 days of any changes to their work and projects, if their ownership is transferred to other parties, or if any of the department’s conditions are no longer met.




Penalties


  • Members will be fined AED10,000 if they violate any of the law’s provisions, and this value will be doubled in the event of a repeat violation within one year.


  • Members may submit a grievance in writing to the department regarding penalties, decisions and measures issued against them within a period of 30 days from the date of notification.


  • The law assigned the department’s chairman to make the required decisions related to implementing the law’s provisions provided the department continues to collect fees and implement penalties, which will be passed on to UAE Government’s treasury.



The law cancels any articles or provisions in any other local legislation that contradicts its provisions. It shall be in force 30 days after its issuance and will be published in the official gazette.




Source: Wam News

Composed by: Sheher Bano

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