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Tue 29 Mar 2011 02:01 PM

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UAE needs new bankruptcy law, says Dubai Chamber chief

Bankruptcy provisions may be within new companies law, to be approved this year, says DG

UAE needs new bankruptcy law, says Dubai Chamber chief
Dubai Chamber head Hamad Buamim said he is optimistic bankruptcy changes will be seen this year (ITP Images)

A new bankruptcy law for the UAE is required to help troubled businesses in the country, the man charged with overseeing the interests of Dubai’s private sector has said.

New legislation to deal with company bankruptcy has been expected for some time, with reports suggesting that it is now in its early draft stages.

Hamad Buamim, the director general of the Dubai Chamber of Commerce and Industry, said that some bankruptcy articles may be present in the new companies law, which is currently awaiting approval.

“The new companies law is very advanced compared to the earlier one, and has a lot of very positive steps to cover a lot of the gaps, whether it’s with regard to investor protection or the structure of businesses,” Buamim told Arabian Business.

“Still, as the Dubai Chamber and as the private sector, we are looking some regulations with regard to insolvency, bankruptcy, and even protections to do with financing. We’d like to see a bankruptcy law that supports businesses in the challenging times like the ones we have just faced

“The companies law itself has some articles [that cover bankruptcy], however, we believe that an insolvency law or bankruptcy law will give more details for businesses to support things like Chapter 11 or closing businesses.”

The Dubai Chamber head added that he was optimistic that the new companies legislation would be approved this year, possibly as early as the second quarter.

The UAE’s Minister of Economy, Sultan Bin Saeed Al Mansouri, had previously stated that the companies law would be finalised by the end of the 2010.

When complete, the law will touch on issues such as competition, foreign direct investment and auditing.