UAE adopts landmark bankruptcy law: How it will benefit you

The UAE has adopted a new Federal Law on Bankruptcy following a Cabinet meeting in Abu Dhabi on Sunday.

The issuance of this new law ‘aims to strengthen the legal sustainability and attractiveness of the investment environment in the UAE, and to increase the ease of doing business.’

Following the meeting, chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai, he posted on his official Twitter account: “We also passed the final version of the new Federal Law on bankruptcy, which aims to promote both investment and ease of doing business.”

He said that the passing of the new law will have a positive impact on the national economy, enabling it to adapt to changes, and support businesses to achieve optimum performance, thus driving economic growth.

The UAE’s Ministry of Finance is scheduled to share further details of the new Financial Restructuring and Bankruptcy Law in a media round table tomorrow (September 6).

The round table aims to introduce the law, its function, its effect on companies and individuals as well as the law’s role in protecting investments and investors in the UAE, the Ministry said, adding that the round table will be attended by Obaid Humaid Al Tayer, Minister of State for Financial Affairs, MoF.

The landmark law spells relief for businesses in times of financial difficulties.

In a statement, Rashid Al Balushi, CEO of Abu Dhabi Securities Exchange, called its implementation “timely and would make the national economy more competitive and investment environment more attractive.”

He said that the move follows the directives of the wise leadership to build an advanced national economy capable of sustainable growth.

Al Balushi stressed that the adoption of the law by the Council of Ministers will enhance the economic and investment legislative system in the UAE, thus contributing to better ranking of the state in the global indicators in terms of ease of doing business, competitiveness and entrepreneurship.

He added that the law would also ensure the continuity of companies and give them the flexibility needed to manage their finances.

These factors, Al Balushi continued, will also help provide an ideal environment for investment.

Al Balushi stressed many positive points of the law that has been promulgated, including ensuring the continuation of the company's business, provision of protection to investors and preserving their rights in general.

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