New UAE Bankruptcy Law

Federal Decree-Law No. 9/2016 (the New UAE Bankruptcy Law or the Law) was promulgated by decree by UAE President His Highness Sheikh Khalifia bin Zayed Al Nahyan on 20 September 2016 and published in the Official Gazette on 29 September 2016. The Law will come into effect at the start of 2017 and introduces widespread changes to the previous insolvency regime, which provided very few options to creditors and insolvent companies beyond liquidation and was rarely relied on in practice.

Applicability

The New UAE Bankruptcy Law shall apply to (Article 2):

• companies established under Federal Law No. 2/2015 (the Commercial Companies Law) - including limited liability companies and both public and private joint stock companies;

• corporations that are partially or solely owned by federal or local government in the UAE (to the extent that the byelaws or the legislation of their establishment state that the Law is applicable to such corporations);