Sheikh Mohammed approves UAE bankruptcy law

Ruler of Dubai announces on Twitter the cabinet has approved draft legislation
Sheikh Mohammed approves UAE bankruptcy law
Sheikh Mohammed Bin Rashid Al Maktoum. (Getty Images)
By Staff writer
Sun 04 Sep 2016 06:14 PM

The UAE cabinet on Sunday approved the country’s long-awaited draft law on bankruptcy.

In a series of tweets, Sheikh Mohammad bin Rashid Al Maktoum, Vice-President of the UAE and Prime Minister and Ruler of Dubai, said: “Today, we approved the final draft of the Federal law on Bankruptcy.

“The law aims to promote the investment attractiveness of the UAE economy and facilitate business.”

The new law paves the way for ailing companies to restructure – something that is not currently available in the UAE.

Industry bodies including the UAE Banks Federation have been lobbying for such a law for several years. They claim the absence of formal bankruptcy legislation in the country hinders the growth of small-to-medium-sized businesses in particular – a sector the government is keen to develop.

Under existing legislation, unpaid debt or a bounced cheque can wind businesses in jail.

Just last week, economy minister Sultan Saeed al-Mansouri was reported to have said the legislation may be finalised by the end of this year, to help companies weather challenging economic conditions.

For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.