Awareness of business laws
The UAE has several regulations in place for smooth and fair conducting of businesses. As a responsible entrepreneur, you are obliged to comply with laws that
- govern your business
- protect labour rights, consumer rights and intellectual property rights
- protect health and environment and ensure safety
- govern the free zone in which your business is set up in.
This page provides an overview of commercial regulations that govern the business enterprises and activities in the UAE, in terms of formation, practice and application.
Law on Bankruptcy
Business bankruptcy in the UAE is governed by Federal Law by Decree No. 9 of 2016 on Bankruptcy which came into force on December 2016. 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:
- companies governed by the Commercial Companies Law
- companies which are not established under the Commercial Companies Law and which are wholly or partly owned by the federal or local government, stipulating that Federal Law by Decree No. 9 of 2016 on Bankruptcy applies
- companies and establishments in the free zones that are subject to the provisions of Federal Law No. 8 of 2004 on Financial Free Zones and which are not governed by particular provisions regulating protective composition procedures, financial restructuring and/or bankruptcy
- any individual who is a trader as defined in the Commercial Transactions Law (Available in Arabic only).
- licensed civil companies carrying out professional activities.
The law aims to increase business stability in the UAE and investors’ confidence in the UAE market.