EghtesadOnline: The United Arab Emirates’ long-awaited bankruptcy law will only cover businesses, a senior official said, while individuals will have to wait for legislation that deals with insolvency.
The law will be published in the official gazette “within weeks” and would go into effect three months later, Obaid Humaid Al Tayer, U.A.E. minister of state for financial affairs, told a news conference on Tuesday, declining to be more specific. The final draft, approved by the cabinet this week, sets up a new regulatory body for financial restructuring. Its members will include government officials and private sector professionals, Al Tayer said.
The absence of legislation that deals with insolvency was widely blamed for the flight of thousands of Dubai residents who lost jobs in the 2008 financial crisis. Faced with the possibility of jail time, many said they had no choice but to leave their cars and belongings after the economic slowdown left them unable to repay debts. Post-dated checks are the most common way to pay residential rent in the U.A.E., reports Bloomberg.
For individuals facing financial hardship, the U.A.E. is working on an insolvency law that will be completed in about 12 months, Al Tayer said.