On 20 September 2016, the new Bankruptcy Law (the Law) for the UAE was enacted. The Law was gazetted on 29 September 2016 and comes into effect on 31 December 2016. The Law will be supplemented by procedural regulations to be issued by the UAE Cabinet based on a proposal to be put forward by the Minister of Finance.

The primary purpose of the Law is to promote the rescue of businesses, either of individuals or companies (the Debtor), facing financial difficulties. This will be done through an insolvency procedure supervised by a competent court (e.g., Dubai courts). The court will have wide powers to oversee the reorganization of the Debtor’s business, including appointing a trustee (at the cost of the Debtor) to oversee the implementation of the insolvency procedure, being either a preventative composition arrangement, a restructuring plan or, as the case may be, a liquidation procedure.