DUBAI: Dubai has announced a second economic incentives package worth AED 1.5 billion, just over $408 million as businesses across the UAE continue absorbing the financial damage from the Middle East war and Iran’s blockade of the Strait of Hormuz.
The Dubai government‘s media office confirmed the package Thursday in a post on X, detailing a range of relief measures targeted at sectors that took the hardest hits. Hotels and restaurants get exemptions from municipal fees. Businesses facing customs violations get reduced fines. Operators dealing with civil aviation permits get lower fees. Taken together, the measures address the cash flow problems that have pushed many businesses to the edge since the conflict escalated.
Massive Boost in Less Than Two Months
The second package brings the overall cost of the stimulus package that Dubai is implementing for the last two months up to AED 2.5 billion ($680 million). The first stimulus package was rolled out in March and cost over $270 million, being targeted at businesses and people affected by the outbreak of war.
The speed and scale of both packages tells a story. Dubai does not typically move this fast or this generously with public money. The fact that authorities pushed out nearly $700 million in relief within two months reflects the severity of damage the war has inflicted on an economy built on openness, trade, and the free movement of goods and people.
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Iran’s response to US and Israeli strikes drove much of that damage. Tehran unleashed drones and missiles across the Gulf, targeting American assets but hitting far more in the process. Energy facilities took strikes. Regional tensions disrupted ports. Airports suspended operations at critical moments. Residential areas in parts of the UAE suffered damage that rattled public confidence and drove away short-term visitors and investors.
The UAE suffered the most from the punishment than any other Gulf state. This was due to its strategic location, its involvement with the international trading channels, and having many Western properties and facilities, which meant that it suffered from Iran’s attacks more than other neighboring states.
Comprehensive Relief Across Key Sectors
As far as Dubai is concerned, the closure of the Strait of Hormuz brought all problems together. Approximately 20% of the world’s oil transportation takes place through this strait. Disruption there does not just affect energy shipments it slows everything, raises freight costs, delays supply chains, and creates uncertainty that businesses price into every decision they make. Hotels emptied. Restaurants lost covers. The airlines diverted or canceled their flights. Processing at the customs office took longer. The packages that were offered are aimed at solving these problems, but the question now is how soon this relief will arrive and whether another incentive package will be offered if the situation worsens.
Dubai’s strength lies in its stability. Right now, neither is fully available. What the government can offer instead is financial breathing room and $680 million worth of it suggests authorities understand exactly how serious the situation has become.
