The UAE’s new law on financial regulation and bankruptcy, which is expected to decriminalise the bouncing of cheques, moved a step closer to being enacted after a draft proposal was approved by the country’s cabinet.
In a statement on news agency WAM, Sheikh Mohammed, UAE Prime Minister and Ruler of Dubai, said the proposed draft law presents flexible strategies to bailout businesses faced with financial troubles that might lead to bankruptcy.
“The draft law aims to regulate accumulated debts, eases restructuring of companies as well as support troubled businesses,” he said.
“The draft law aims to mitigate risk of bankruptcy and ensure a safe and attractive business environment in the UAE that nurtures and supports investments.”
The new law was drawn up following detailed studies locally and with international experts in the field of bankruptcy, and financial restructure.
“In light of its global investment position, the UAE government seeks to provide incentives to investors to invest in the country by ensuring a supporting environment and benefits to develop businesses in the UAE,” he said.
The law is also expected to include measures that will decriminalise the issuing of bounced cheques.
Deloitte Corporate Finance Limited, in a report issued in January this year, urged authorities in Dubai to relax the criminal implications of bankruptcy and bounced cheques as part of a strategy to enable the emirate, as a financial and trading hub, to reach the next level in terms of sustainability and competitiveness.
The draft law will now go to the Federal National Council for approval, and if passed there, it will be referred on to the rulers of the seven emirates, before it gets final approval from UAE President, Sheikh Khalifa bin Zayed bin Sultan Al Nahyan.For all the latest banking and finance 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.
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