JEDDAH — The implementation of the long-awaited insolvency law in the UAE will strengthen business confidence and boost inward investment, The Links Group, a provider of commercial facilitation and advisory services which helps foreign companies set up in the region, said. The UAE Cabinet approved the draft law which aims to regulate accumulated debts, ease restructuring of companies and support troubled businesses. Sheikh Mohammed bin Rashid Al Maktoum, UAE Prime Minister and Vice President and Ruler of Dubai, said the draft law presents flexible strategies to bailout businesses faced with financial troubles that might lead to bankruptcy. The law is also expected to include measures that will decriminalize the issuing of bounced checks. The draft law will now go to the Federal National Council for approval, and if passed there, it will be referred on to the rulers of the seven emirates, before it gets final approval from UAE President, Sheikh Khalifa bin Zayed bin Sultan Al Nahyan. John Martin St Valery, founding partner of The Links Group, said: “Approval by the Federal National Council of the proposed insolvency law would strengthen business confidence in the region and attract more inward investment into the UAE. “In our dealings with foreign companies the harsh penalties applied to defaulting businesses registered in the UAE has often been identified as a barrier to market entry.” He added: “With the draft insolvency law having been approved by the Cabinet, we are optimistic the FNC will also rule in its favor.” “Decriminalizing bankruptcy and simplifying the process to help struggling businesses would make the UAE an even more attractive investment destination. It would also help to foster more entrepreneurship and innovation as the risk burden associated with potential failure would be significantly lessened.” The Links Group is a preferred partner of the Government of Dubai through a strategic alliance with the Foreign Investment Office of the Dubai Economic Department. It works closely with foreign trade bodies and companies to help attract investment into the UAE. In a report last January, Deloitte Corporate Finance Limited urged authorities in Dubai to relax the criminal implications of bankruptcy and bounced checks as part of a strategy to enable the emirate, as a financial and trading hub, to reach the next level in terms of sustainability and competitiveness. — SG/Agencies
