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:

• companies governed by the Commercial Companies Law

• any natural person having the capacity of a trader

• licensed civil companies carrying out professional activities.

The law aims to increase business stability in the UAE and investors’ confidence in the UAE market.