UAE introduces much-awaited bankruptcy law
The law contributes in strengthening the financial, economic and legislative system in the UAE.
Dubai: The government of the United Arab Emirates has approved a final draft of a much-awaited bankruptcy law that it hopes will strengthen confidence in the regional business hub.
-"The law contributes in strengthening the financial, economic and legislative system in the UAE,-" said finance minister Sheikh Hamdan bin Rashid al-Maktoum in a statement received Monday by AFP.
The move puts in place a -"separate and modern law to avoid bankruptcy cases, including financial restructuring, composition procedures, restructuring debts and liquidation funds,-" he said.
-"Companies and individuals are now able to restructure their debt while avoiding bankruptcy liquidation,-" he added.
The law will end the practice of sending people to jail for bounced cheques until a restructuring plan for business owners has been agreed with creditors, reported The National daily citing an unnamed government official.
It said a number of small business owners have fled the country over the past two years in fear of being jailed for defaulting on debt and other financial obligations.
-"The bankruptcy law helps in attracting foreign investments due to the increase (of) trust in the economic environment and the flexible legislative infrastructure that protect investors' assets and facilitate business,-" said the minister.
The emirate of Dubai, one of seven sheikhdoms that form the UAE, has evolved over in recent years into a regional hub for business and services, attracting foreign companies to set up regional headquarters.