Legislation on insolvency in the United Arab Emirates.
The long-awaited federal bankruptcy law came into effect on December 29, three months after its publication. The 2008 financial crisis highlighted the need to adopt comprehensive insolvency legislation, after many debtors fled the country to avoid penal consequences -- including time in prison -- when their businesses crashed. However, despite low oil prices it was not until 2016 that steps to formalise the bankruptcy law were expedited, with the aim of promoting foreign investment and business development.
Foreign direct investment in the non-oil sector will increase.
Some financial institutions could be slow to take account of the new legislation.
Other Gulf Arab countries may look to the UAE bankruptcy law as a model.
