The Dubai International Financial Centre (DIFC) today issued a consultation paper to seek comment on new Preferential Creditor Regulations under the DIFC Insolvency Law of 2004.
The Regulations are designed to protect the employees of any company at the DIFC that becomes insolvent by ensuring that they receive a preferential right to payment upon the company’s bankruptcy. The proposed changes, drafted in consultation with an internationally renowned law firm, are aimed at making the Insolvency Law practical and comprehensible to all practitioners.
His Excellency Dr Omar Bin Sulaiman, Governor of the DIFC commented: “As the DIFC continues to be a catalyst for regional economic growth, development and diversification, we are committed to improving and expanding the legal and regulatory infrastructure in order to better serve our clients and their employees.”
The new Regulations apply to only one class of preferential creditors, namely the employees in a DIFC-registered company which goes into liquidation.
The Insolvency Law, issued in September 2004, set out provisions for preferential creditor regulations (Article 67 (2)) to be passed at a subsequent date and it is in this context that these Regulations have been drawn up. The proposed Regulations will apply to all pending and future liquidations in the DIFC.
The proposed DIFC Preferential Creditor Regulation is being posted on the DIFC web-site on March 20th. for a period of 30 days for public consultation.
About the DIFC:
The Dubai International Financial Centre (DIFC) is an onshore hub for global finance. It bridges the time gap between the financial centres of Hong Kong and London and services a region with the largest untapped emerging market for financial services.
In just three years, over 550 firms have registered at the DIFC. They operate in an open environment complemented with world-class regulations and standards. The DIFC offers its member institutions incentives such as 100 per cent foreign ownership, zero tax on income and profits and no restrictions on foreign exchange. In addition their business benefits from modern infrastructure, operational support and business continuity facilities of uncompromisingly high standards.
