Dubai's Second AED 1.5 Billion Economic Package: 33 Fee Initiatives Corporate Services Firms Must Track

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Dubai's second AED 1.5bn package: 33 initiatives cut fees for hotels, customs, aviation and SMEs. What corporate advisors must flag now.

Sheikh Hamdan bin Mohammed approved a second AED 1.5 billion (around USD 408 million) economic incentives package on 21 May 2026, bringing total support to AED 2.5 billion in under two months.
The package comprises 33 initiatives spanning tourism, customs, transport, civil aviation, education, real estate and SME licensing, with rollout windows of three to twelve months.
Dubai Customs offers an 80 per cent reduction in fines and instalment payments on outstanding import declaration amounts.
The Department of Economy and Tourism is exempting Tourism Dirham, hotel and restaurant sales fees, holiday home permit fees and event cancellation fees.
SME membership licences expiring in 2026 are extended by two years under the Mohammed Bin Rashid Establishment for SME Development.
Implementation timelines vary by regulator, requiring corporate services firms to track circulars across DET, KHDA, RTA, Dubai Civil Aviation Authority and Dubai Municipality.

How the Dubai Executive Council Structured the Second Tranche of Relief

The Dubai Executive Council, chaired by Sheikh Hamdan bin Mohammed, approved the AED 1.5 billion package on 21 May 2026 as a follow-on to the AED 1 billion first package implemented from 1 April. According to Dubai Media Office and Khaleej Times, the 33 initiatives are designed to ease fee pressure on businesses navigating regional headwinds and trade disruption, while reinforcing the Dubai Economic Agenda D33.

For corporate services firms, the practical surface area is wider than the first package. Relief now reaches education providers under the Knowledge and Human Development Authority (KHDA), arts and culture venues, and SMEs registered with the Mohammed Bin Rashid Establishment for SME Development. Government supply contractors are also covered. Each measure is administered by a different entity, which means client briefings must map regulatory exposure carefully.

What the AED 1.5 Billion Package Actually Covers

The second package was approved on Thursday 21 May 2026 and announced through Sheikh Hamdan's official channels. It contains 33 initiatives that will roll out over periods ranging from three to twelve months, with each timeline set by the responsible government entity rather than a single unified circular. International coverage by AGBI, Gulf Today and economymiddleeast.com pegs the dollar value at roughly USD 408 million.

The headline sectoral measures are concentrated in a small number of categories. Hospitality benefits from exemptions on the Tourism Dirham, hotel room and restaurant sales fees, and holiday home permit fees. Events and exhibitions get full exemption from event permit fees and all postponement and cancellation charges. Tour guides and desert safari operators see fee reductions, while hotel classification and e-link fees are deferred.

Outside hospitality, the package reaches into supply chains and government procurement. The Department of Finance has cut the final retention security on supply contracts with government entities from 10 per cent to 2 per cent. It has also raised the contract value threshold for final insurance exemption from AED 5 million to AED 10 million. SME membership licences expiring in 2026 are extended by two years.

Customs, Transport and Civil Aviation Measures

Dubai Customs is offering an 80 per cent reduction in fines for customs cases, alongside the option to pay outstanding import declaration amounts in instalments. The Roads and Transport Authority is deferring payments for passenger activity sectors and waiving violations linked to the vehicle availability and arrival time indices.

The Dubai Civil Aviation Authority is reducing renewal fees for civil aviation activity permits and suspending late-renewal penalties. The Executive Council also confirmed one-time full exemptions from certain DET and Dubai Municipality fees for businesses facing temporary continuity challenges. Eligible categories include aviation-related activities, marina operators, drone and fireworks companies, and event management firms.

Sector-by-Sector Breakdown for Advisors

Because the relief is granular and dispersed across multiple regulators, a flat sector view is the fastest way to brief clients. The table below sets out the principal benefit and the implementing entity for each major category covered in the AED 1.5 billion tranche.

Sector	Headline measure	Implementing entity
Hospitality	Exemption of Tourism Dirham and sales fees on hotel rooms and restaurants	Department of Economy and Tourism
Events and exhibitions	Full waiver of event permit, postponement and cancellation fees	Department of Economy and Tourism
Customs and trade	80 per cent reduction in fines; instalments on import declaration arrears	Dubai Customs
Civil aviation	Reduced permit renewal fees and suspension of late-renewal penalties	Dubai Civil Aviation Authority
Transport	Deferred payments for passenger activity sectors	Roads and Transport Authority
Education	Deferral and instalment of licence renewal fees and fines	Knowledge and Human Development Authority
Government contracts	Retention security cut from 10 per cent to 2 per cent	Department of Finance
SME licensing	Two-year extension of memberships expiring in 2026	Mohammed Bin Rashid Establishment for SME Development

This is not the full list. The Knowledge Fund is adding rent exemptions and extended rent-free periods for early childhood centres under construction. The Dubai Culture and Arts Authority is offering rent and fee deferrals plus reductions on temporary event spaces. Real estate measures include extended validity for building permits under Dubai Municipality. Advisors should treat the table as a navigation aid rather than a complete schedule.

How the Package Sits Alongside the First AED 1 Billion Tranche

Together, the two packages now total AED 2.5 billion in support introduced in under two months. The first AED 1 billion tranche was approved in late March 2026 and rolled out from 1 April. It focused on three-month deferrals - hotel sales fees, the Tourism Dirham and a broader set of government fees - alongside an extension of the customs data grace period from 30 to 90 days. It also bundled in streamlining of residency permit issuance and renewal.

The second tranche shifts the policy mix. Where the first leaned on deferrals, the second adds outright exemptions, fine reductions and instalment options across a wider sector list. For corporate services firms, that means a client's earlier deferred fee may now sit alongside a fresh exemption in the same category, and the cash-flow modelling needs to reflect both layers. Dubai Chambers and the wider business community have welcomed the cumulative envelope as a credible response to regional disruption.

Free zone exposure is a separate matter. The Executive Council's measures attach to registration with named Dubai government entities. A free zone tenant licensed only by its zone authority sits outside the framework unless its zone moves in parallel. DIFC has already rolled out its own relief package covering more than 8,800 active firms, illustrating the model.

Mainland and dual-registered businesses generally have wider access. This is a routine check worth making when reviewing a free zone versus mainland structure for a client.

Practical Steps for PRO Services Teams and Corporate Setup Advisors

For PRO services teams, business setup consultants and corporate secretarial firms, the immediate priority is a renewal-calendar review. Identify every client with a licence renewal, permit or fee obligation due between now and Q1 2027. Tourism Dirham exemption, KHDA fee deferral and the SME membership extension are the highest-impact items for typical books of business.

Cash-flow modelling is the second priority. Fee relief is temporary, and any client that absorbs the gain into pricing or margin will face a snap-back when standard fee schedules resume. The Dubai Customs 80 per cent fine reduction is a one-shot opportunity to clean up legacy declaration disputes. Where clients are also juggling UAE VAT and e-invoicing readiness, the fee-relief liquidity is a chance to fund those upgrades without straining working capital.

What Clients are Asking their Advisors

Do free zone companies qualify for the AED 1.5 billion package?

Eligibility is tied to registration with the specific Dubai government entity administering each initiative, not to a free zone or mainland licence. A free zone hotel licensed by DET for tourism activity should access Tourism Dirham relief. A purely free-zone-regulated entity may need to look to its own zone authority - DIFC, for example, has rolled out a parallel relief programme for its firms.

When does the second package take effect and how long does relief last?

The 33 initiatives roll out over three to twelve months from the 21 May 2026 approval, with each implementing entity announcing its own timeline. Some measures, such as customs fine reductions, are likely automatic on application; others, such as KHDA licence fee instalments, will require formal sign-up. Tracking each regulator's circular is essential.

Does the package change VAT or Corporate Tax obligations?

No. The package addresses government fees, municipal charges, customs penalties and retention securities only. UAE VAT filings and federal Corporate Tax returns continue on their usual schedules, and the 30 September 2026 Corporate Tax deadline is unaffected. Advisors should warn clients that fee relief is not tax relief.

What should a company do if it has just renewed a licence and paid fees that are now exempted?

Source material does not confirm retroactive refunds. Companies should contact the relevant regulator - DET, KHDA or Dubai Civil Aviation Authority - and request guidance on whether already-paid fees within the relief window are creditable against future renewals. Document the request in writing and keep a clear audit trail.