Move is expected to help smaller companies in particular as the economy slows due to oil price slump
The United Arab Emirates may finalise a long-pending bankruptcy law by the end of this year, the economy minister said on Wednesday, a move that could help smaller companies in particular as the economy slows because of low oil prices.
"The need for a bankruptcy law is there, as soon as possible," Sultan Saeed al-Mansouri said reporters.
"It is in the process. It should be finalised by the end of the year, that is my estimate."
The UAE does not have modern bankruptcy regulations, making it difficult for companies to restructure or wind themselves up. Under existing legislation, unpaid debt or the issue of a bounced cheque can lend businessmen in jail.
This has proved problematic for smaller companies in particular as some executives of troubled firms have fled the country, leaving behind bad debts.
The UAE Banks Federation, an industry body, has been lobbying the government to expedite the new insolvency law, chairman Abdul Aziz al-Ghurair said in March.
Mansouri also said the UAE's new investment law might be finalised by the end of 2016 as a draft would soon be presented to the cabinet.
Among other reforms, the investment law is expected to allow majority foreign ownership of companies in some sectors where it is currently limited to 49 percent or less.