By Staff writer
Law will apply to debt-ridden companies but not private individuals
A government official has said the UAE’s new bankruptcy law will not offer protection from jail for debt-ridden individuals, local media reported.
Sheikh Mohammad bin Rashid Al Maktoum, Vice-President of the UAE and Prime Minister and Ruler of Dubai, on Sunday approved a draft law aimed at helping bankrupt businesses restructure.
The final draft is expected to offer protection for employees, shareholders and directors of companies undergoing court-led insolvencies, according to The National, which quoted an unnamed person familiar with the draft legislation.
However, private individuals facing bankruptcy will still be subject to criminal proceedings if they fail to repay their debts.
Citing an official familiar to the proceedings, the newspaper said the legislation would apply to all onshore and free zone companies in the UAE apart from those in Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), which have their own insolvency laws in place.
The Ministry of Finance is expected to reveal more details about the draft law this week.