Cynthia Trench delves into the UAE’s bankruptcy law and what it means for the country’s businesses
The absence of a legal framework for bankruptcy has long been a hindrance to UAE business.
In the past, financial problems spelled trouble for companies, as local courts could not be persuaded to offer a moratorium on debt, which would have given firms the chance to restructure their business and finance. In the absence of proper bankruptcy laws, even a bounced cheque could land an entrepreneur in jail.
It comes as no surprise, therefore, that the introduction of a new bankruptcy law in the UAE is being lauded as a huge step forward in improving the country’s economic and regulatory environment. But what does this law really mean?
What is the new bankruptcy law?
The Federal Bankruptcy Law (the ‘New Law’) was issued under the Federal Decree No 9 of 2016. It was first published in the Official Gazette on September 29, 2016 and came into force on December 29, 2016. Drafted by the Ministry of Finance, it marks a new step forward in providing a legal framework to help distressed companies in the UAE avoid bankruptcy and liquidation.
To whom does the law apply?
The New Law applies to companies and not individuals. It applies to companies that are partly or fully owned by the federal or the local government and companies and institutions established in Dubai mainland and free zones that are not governed by existing bankruptcy provisions.
It does not apply to companies established and operating within the Dubai International Financial Centre and Abu Dhabi Global Market as these financial free zones have internal legislation in place regarding bankruptcy and insolvency.
How will it help?
Diese Geschichte stammt aus der July 2017-Ausgabe von Gulf Business.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der July 2017-Ausgabe von Gulf Business.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
Green lights
It hasn’t even been a full year that Stellantis, one of the world’s biggest auto companies, has been in existence. Still, its wheels are spinning furiously. Here’s what it has in store for the region
Purpose through corporate responsibility
Every organisation must deeply reflect about whether they are leaving behind a legacy or a liability, says Abdulaziz AlSowailim, EY MENA chairman and CEO
Analysing the layers of a coconut
When we have a sense of clarity as to our purpose in life, then we institute the correct practices and habits around us, and set realistic and achievable results
DUNES TO DOMINION
FOR A COUNTRY RICH IN TRADITION AND DRIVEN BY AMBITION, THE UAE’S JOURNEY DURING THE PAST 50 YEARS HAS BEEN UNPRECEDENTED. WHAT’S IN STORE FOR THE NEXT 50?
Building strong
International investors are boosting Dubai’s residential property market, which has rebounded strongly from the Covid crisis, writes Aarti Nagraj
CHASING THE AMERCIAN DREAM
FOR SHAI ZAMANIAN, THE US IS A LAND OF LIMITLESS POSSIBILITIES, AN AVENUE HE AIMS TO OPEN FOR FAMILIES WORLDWIDE VIA IMMIGRATION. HERE’S HOW HE IS BRINGING HIS GOAL TO FRUITION
OBITUARY: JOCELYN HENDERSON (1921-2021)
THE GRANDE DAME OF ABU DHABI – THE WIFE OF A FORMER DIPLOMAT – PASSED AWAY IN THE UAE CAPITAL AGED 100
THE DIGITAL DISRUPTORS
IN THE COMING YEARS, THE GCC IS EXPECTED TO PLAY A SIGNIFICANT ROLE IN SECTORS SUCH AS HEALTHCARE, MANUFACTURING, EDUCATION AND RETAIL, WHICH WILL HELP BOOST THE GROWTH OF ITS NON-OIL ECONOMY
Signed, sealed, delivered
Nicolas Baretzki, CEO of Montblanc, partnered with one of the world’s most recognisable luxury brands, Ferrari, earlier this year. Here’s where the partnership, and the German company as well, is headed next
UP, UP AND AWAY
AS THE FIRST IN-PERSON AIRSHOW TO TAKE PLACE SINCE THE OUTBREAK OF THE PANDEMIC, THE EVENT SAW SEVERAL DEALS ANNOUNCED