The UAE President His Highness Sheikh Khalifa bin Zayed Al Nahyan has issued federal law decrees pertaining to bankruptcy, the state news agency Wam said.
The new law will come into effect three months from its publication in the country’s official legal gazette.
A report in The National newspaper website quoted a senior official at the Ministry of Finance as saying the new law had already been published in the gazette, and would come into effect in late December or early January.
Earlier, in September, the UAE cabinet had adopted the final draft of the law, which allows companies and individuals to restructure their debt while avoiding bankruptcy liquidation.
The bankruptcy law is one of the most important foundations of the UAE legislative system considering its role in strengthening the investment environment for the UAE economy and increase the security level for creditors through implementing a transparent, fast and flexible rules and procedures, Sheikh Hamdan bin Rashid Al Maktoum, the Deputy Ruler of Dubai and UAE Minister of Finance, had said in September.
According to him, the new draft law was built based on modern legal and economic principles, distinguishing it from other laws in Arab countries and other developed countries.
It will help strengthen the financial, economic and legislative system in the UAE by putting in place a separate and modern law to avoid bankruptcy cases, including financial restructuring, composition procedures, restructuring debts and liquidation funds.
Under the new system, companies and individuals will now be able to restructure their debt while avoiding bankruptcy liquidation.
Sheikh Hamdan said this will support sustainable business development in the state.
"The bankruptcy law helps in attracting foreign investments due to the increase trust in the economic environment and the flexible legislative infrastructure that protect investors’ assets and facilitate business for commercial companies by adopting international legislative and economic practices which results in raising UAE’s competitiveness globally," he noted.
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