Law on Bankruptcy
Business bankruptcy in the UAE is governed by Federal Decree-Law No. (51) of 2023 Promulgating the Financial and Bankruptcy Law. The law provides a legal framework to help distressed companies in the UAE to avoid bankruptcy and liquidation through different mechanisms which include:
- consensual out-of-court financial restructuring
- composition procedures
- financial restructuring
- the potential to secure new loans under terms set by the law
- conversion to declaration of bankruptcy and liquidation of the debtor’s assets.
The law does not apply to natural individuals. It applies to:
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companies governed by the Commercial Companies Law
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any natural person having the capacity of a trader
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licensed civil companies carrying out professional activities.
The law aims to increase business stability in the UAE and investors’ confidence in the UAE market.
Updated On :
29 Oct 2024
