The UAE Cabinet approved the Federal Decree-Law No. 19 of 2019 on Insolvency to regulate the cases of insolvency of natural persons. This law aims at enhancing the competitiveness of the UAE by ensuring the ease of doing business, creating favourable conditions for individuals facing financial difficulties and protecting those who are unable to pay their debts because of their bankruptcy. The following are the main provisions of the law:
- The law will support individuals who are facing existing or anticipated financial difficulties that make them unable to settle their debts
- The law will help individuals reschedule their debts and give them the opportunity to take new concessional loans
- The new law will protect the debtors from legal prosecution, decriminalize the financial obligations of the insolvent person and give them an opportunity to work, be productive and provide for their families
- One or more experts will be appointed by the court to settle the financial obligations debtor. The expert will coordinate with the debtor and creditor to come up with a plan to settle the financial liabilities within three years.
- The new law will enter into force in January 2020.
The law contributes to enhancing the creditworthiness of the country in the long run and ensures an enabling environment that facilitates entrepreneurship and provides favourable conditions for doing business.
Updated on 31 Mar 2021