COVID19 Business Impact

What are COVID19 IMPACT and global challenges?

COVID19 impact and its outbreak have been the biggest challenge faced by the global economy since the Recession of 2008. COVID19 impact on business in the UAE and across the globe in all sectors. This pandemic has broken supply chains, decimated tourism and aviation sectors as well as wiping out at least USD 17 trillion from Stock Markets Worldwide. Throw into this mix, the already plunging oil prices and we have the recipe for a global recession and an economic catastrophe.

To mitigate COVID19 IMPACT, the governments of the world have come together to face this massive challenge. Leading the charge in the United Arab Emirates has put forward measures that will not only control this spiral of the economy but also help not only large corporations struggling with this situation but also the small and medium business owners which form the backbone of every Economy.

COVID19 Business crisis


Recently a poll was held wherein 77 percent of the CFO’s of the UAE Market considered that COVID19 IMPACT would cause a significant restructuring in their business.

The primary concern for them was that the Revenue stream will be considerably hit.

CFOs looking to cut costs are most likely to consider cost containment and deferral or cancelation of investments, particularly on capital expenditure. From those in the region, this is especially true for the UAE (92%)

Investments in digital transformation, customer experience, and cybersecurity are most likely to be protected, and, as a result of COVID-19 IMPACT, 55% of CFOs expect to make changes to their supply chain.

Despite their concerns, a majority of CFOs in the Middle East believe that if COVID-19 IMPACT were to end immediately, their company could get back to ‘business as usual’ within three months.


The measures implemented by the UAE Government in light of COVID19 IMPACT control measures are:

  • Financial Measures to facilitate economy and to control COVID19 IMPACT
    • A stimulus package has been declared by the Central Bank of the United Arab Emirates worth 100 billion AED. This targeted economic support scheme will provide funding to banks and allow them to delay principal and interest payments for up to six months on loans to all private sector and retail borrowers affected by the COVID19 IMPACT. The UAE Central Bank has also:

      • Urged Commercial Banks to consider Loan leniency.
      • AED 50 billion in zero-interest loans for banks to support SME’s.
      • Reduced Bank voluntary Capital Buffers to free up to 50 billion AED in Capital.
      • Lowered Real Estate LTV ratios.
      • Put limits on bank fees and credit cards.
    • A further stimulus package of 16 billion AED by the UAE Government to support the national economy and ensure business continuity. These measures consist of:

      • Renewable suspension of six months of work permit fees.
      • A six-month suspension of the collection of Administrative fines by the Ministry of Human Resources and Emiratization.
      • Reduction in work permit fees for businesses with 1-6 registered workers
    • The Government of Dubai has announced a package of 1.5 billion AED to enhance the liquidity and alleviate the situation created by the outbreak. This package also includes the following initiatives by the Dubai Government:

      • Reduce the Cost of Business and simplify Business Procedures.
      • Freeze of 2.5 percent on market fees levied on all facilities operating in the UAE.
      • The requirement for providing a banking instrument while submitting customs related grievances has been canceled.
      • Cancellation of 25 percent down payment requirement when applying for an installment-based payment of government fee and trade license renewal.
      • The reduction of Municipality Fees imposed on Sales at Hotels has been reduced to 3.5 percent from 7 percent.
      • Reduction of 10 percent in Dubai Electric and Water Authority bills.


  • Taxation Measures to reduce COVID19 IMPACT

    • Refund of 20 percent on the customs fee on imported products sold locally in the Dubai Markets.
    • Fees imposed on submitting customs documents has been reduced by 90 percent.
    • Dubai Customs has also put audits on hold.
    • Removal of Cash and Bank Guarantees to clear goods for clearing companies and refund of the existing bank/cash guarantees for the companies.


  • Administrative Measures to control COVID19 IMPACT

    • Creation of a Committee lead by the Department of Finance with members from the Department of Economic Development and local banks, to review lending options.
    • E-learning has been implemented in all schools across the Emirates.
    • All Commercial Establishments with the exemption of certain vital sectors have been directed to perform tasks electronically.
    • Closure of Public Places to ensure that Social Distancing and Community spread are curbed.
    • Sanitization measures of Public Transports and related amenities regularly.





Global Economic Risks

Emerging Opportunities in the UAE

•      With the increased Health, Political and Social Unrest in the Western World, people in the Western World are looking into it which countries have managed this Global Economic Risks in an organized and smart way with the minimum impact on People Health, Disruption in Businesses and Security of the Society as a Whole.

•      In the Post COVID-19 World, there are significant possibilities that investment and businesses will shift towards secure and safe economies, which will provide:

•      Modernized health facilities

•      Political Stability

•      Public Security and Administration


•      Fortunately, UAE has all the modernized systems which the World is Looking for In the Post COVID-19 pandemic World such as:

•      Modernized Health Facilities

•      Smart Public security administration infrastructure

•      Dubai is one the top of the list in terms of readily transformable to a Digitized Smart City

•      Dubai has the smart and digitized infrastructure and has the surplus capacity to attract hundreds of thousands of investors for new emerging businesses and investments

•      In the post-COVID-19 era, an enormous shift will likely to seen from the Western World to the economies with readily available smart infrastructure facilities.




Pre-COVID19 Business Model

Post-COVID19 Business Model

•      Hierarchical business structure

•      Structural supply chain management systems

•      Structural business processes

•      High fixed overheads

•      Traditional performance analysis measures

•      Least investment in digital infrastructure

•      Smart Business Structures with a blend of

•      Inhouse core staff in core activities

•      Outsourcing of support services

•      Sub-contracting/ Joint Venture arrangements

•      Smart Supply Chain System such as F2C (Factory to consumer)

•      Re-engineering and automation of business processes

•      Least fixed overhead costs

•      Modernized performance analysis measures

•      High investment in digital infrastructure


How to Manage transition towards New Normal and to reduce COVID19 IMPACT


  • SWOT ANALYSIS – An in-depth understanding of your strengths and Emerging Opportunities is very important
  • PESTEL ANALYSIS – Adapt your strategies according to dynamically changing Political, Economic, Social, Technological, Ecological and Legal Situations
  • Cash Flow Forecasting and Continuous Follow Up
  • Share Risk
  • Retain your core resources
  • Find new business partners
  • Transform and diversify digitally
  • Look into economical substitutes and alternatives