Bankruptcy, Restructuring & Insolvency

Companies and traders are covered by the federal Financial Restructuring and Bankruptcy Law of 2023, which applies from 2024 and is heard by specialised bankruptcy courts. Personal debts of individuals who are not traders fall under a separate insolvency law.

Three routes. The law provides for preventive settlement, restructuring and bankruptcy. Earlier routes aim to keep a viable business operating under court supervision.

Timing. A debtor that has stopped paying its debts is expected to apply within a set period. Acting early generally preserves more options for both the debtor and its creditors.

Creditors' rights. Creditors can participate in the proceedings, file claims and, where secured, seek enforcement against their security within the bankruptcy process.

Individual insolvency. Individuals unable to pay their debts can apply for a court-supervised settlement plan, which may offer protection from certain proceedings while the plan is in place.

Up-to-date accounts, a list of creditors and a realistic cash-flow forecast are the starting point for any restructuring discussion.

Legal framework
Federal Decree-Law No. 51 of 2023 issuing the Financial Restructuring and Bankruptcy Law
Cabinet Resolution No. 94 of 2024 (Executive Regulations)
Federal Decree-Law No. 19 of 2019 on Insolvency (natural persons)

The law does not apply to companies with their own insolvency regimes, such as those in the DIFC and ADGM, or to banks and insurers licensed by the Central Bank. The current status of the 2019 individual insolvency law should be confirmed.