The UAE cabinet’s adoption of a draft bankruptcy law will attract investors and make the national economy more competitive, the head of Abu Dhabi’s stock exchange has claimed.
Sheikh Mohammad bin Rashid Al Maktoum, Vice-President of the UAE and Prime Minister and Ruler of Dubai, on Sunday approved the long-awaited draft law intended to help ailing firms restructure.
In a statement carried by news agency WAM, Rashid Al Balushi, CEO of Abu Dhabi Securities Exchange (ADX), said adoption of the new law was “timely” in challenging economic times and would make the UAE’s investment environment more attractive.
Industry bodies such as the UAE Banks Federation have been lobbying for bankruptcy legislation for several years.
They claim the absence of formal insolvency laws in the country hinders the growth of businesses, which, at present, can wind up in jail if they fail to repay outstanding corporate debt or bounce a cheque.
According to WAM, Al Balushi said adoption of the law by the Council of Ministers will “enhance the country’s economic and investment legislative system, helping to improve the UAE’s ranking in global indicators measuring ease of doing business, competitiveness and entrepreneurship.”
The new law would also give companies more flexibility to manage their finances, improving the investment climate.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.