Bankruptcy Law Reform May Boost Economy

Government officials are working on a proposed bankruptcy law designed to lower costs for businesses seeking to raise capital for start-ups or for expanding in the UAE, legal experts say, The National reported. Observers following developments generally agree the country's economy would benefit from more entrepreneurial risk-taking and a boost to the number of new businesses. But some also say it would help to lower the cost of funds needed to launch or grow a company. "International markets do not perceive UAE law as providing a viable reorganisation procedure and, as a result, companies in the UAE pay a premium when raising capital," said Adam Goldberg, an associate with Latham & Watkins, a law firm in Dubai. "Reforming the insolvency law to provide a clear, predicable and transparent means for a company to reorganise would benefit the national economy and all UAE companies by reducing the costs of capital for UAE companies over the medium to long term." A bankruptcy law already exists. But it has not been tested by any company, which means there is much uncertainty in legal circles about how it could be applied in reality, said Jody Waugh, a partner in the banking and finance division of the law firm Al Tamimi & Company. Read more.