The UAE has announced further changes in its support programme for the small and medium enterprises (SMEs) sector, with change in classifications and periods for eligibility to get incentives.
Under the new classification structure, announced by the Ministry of Human Resources and Emiratisation, up to five enterprises will now be included under Tier 1 category per owner, instead of two enterprises earlier.
Besides, enterprises with a date of license issuance not exceeding five years may enjoy the incentives of Tier 1 category, instead of the existing three year limit.
The categorisation of companies into three tiers is based on the Cabinet decision No. 18 of 2022.
Enterprises are defined as ‘small’ they are owned and managed by an Emirati national, a member of a government-accredited fund or programme for supporting SMEs and does not employ more than 15 people.
Enterprises which employ16 to 50 persons are defined as ‘medium’ ones.
The enterprises that will benefit from the new incentives have to be members of accredited funds or programmes that support SMEs in the UAE.
The ministerial resolution also outlined certain conditions for SMEs to be classified under Tier 1 for five years, such as the business owner or all the partners should be Emirati and the owner may not own or be a partner in more than five companies.
The resolution also stipulates conditions such as if enterprises hire more than 50 employees or fail to pay the employees’ wages under which the SME classification under Tier 1 would be revoked and reclassified to Tier 2 or 3.
The UAE ranked first globally in the Global Entrepreneurship Index 2022, and fifth globally in the Growth of Innovative Companies Index, according to the Global Competitiveness Report issued by the World Economic Forum.
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