Government measures in key jurisdictions 3rd edition final - Flipbook - Page 132
Dipali Maldonado | d.maldonado@tamimi.com | +971 (0) 43641641
Loans and
financial
support
Has the
government put in
place any new
bank funding
schemes?
The UAE Central Bank issued standards for its Targeted Economic Support Scheme (TESS) with a focus
on private sector companies, SMEs and individuals. In summary TESS targets three principal aspects:
• Firstly, funding relief to banks where such banks can avail zero rated facility from the Central Bank as
part of the AED 50 billion stimulus package for UAE banks;
• Relaxation in capital buffers prescribed for banks thereby allowing banks to tap into a capital
conservation buffer up to 60% and in some instances up to 100%. TESS also imposes a temporary
suspension on banks on maximum distributable amount;
• Offers payment deferral of interest and principal of up to 6 months to private sector companies,
SMEs and individuals. Also a restriction on banks to charge fees and penalties.
ADFD is a multilateral agency which has pledged a COVID 19 soft loan program of AED 1 billion for
industrial, healthcare and sectors completely disrupted by COVID 19. Eligibility criterion for availing the
soft loans include:
• (a) Annual revenue not less than AED 150 million;
• (b) Asset valuation no less than AED 10 million;
• (c) Audited financials for the last 3 years
• (d) Details of the financial stress on the company proposing to avail the soft loan;
• (e) Operational plan for the utilization of the soft loan and impact on its business; and
• (f) Details of Strategic growth for the next 3 years
Employment
What financial
support is the
government
providing to
businesses and to
individuals on
employment
issues?
•
: No state aid, state wage subsidy and/or state payroll co-funding
scheme has been introduced or launched in order to assist employers adversely financially
affected by the Covid-19 pandemic and unable to (or facing difficulty in) paying staff wages.
Businesses therefore remain solely and exclusively liable for discharging staff wages and other
labour-related benefits or entitlements.
•
: No state aid and/or unemployment benefit scheme has been
introduced in order to assist employees who have lost employment due to the effects of the
Covid-19 pandemic.
However, the Ministry of Human Resources and Emiratisation (the “
”) enacted interim
legislation on 26 March 2020 mandating the continuation by employers of contractual allowances
and (if applicable) staff accommodation for its terminated staff until the earlier of them being able
to exit the country, secure alternative UAE employment or the revocation of such interim
legislation. The rationale behind such measures is to ensure a sufficient financial safety net is in
place for such staff pending repatriation to their home countries (particularly in the light of travel
restrictions and travel embargoes still being in place in certain countries). Whilst this interim
legislation applies only to those companies falling under the direct remit of the MOHRE (and so
technically excludes the free-zones), a number of free zone authorities have nonetheless adopted
its terms either wholesale or in varied form.
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Government measures in key jurisdictions