UAE’s insolvency laws delay business closure up to five years

It takes an average of five years to close a business in the UAE because of inadequate insolvency laws, according to a senior adviser for the World Bank.

The Government needs to create an insolvency regime to make the legal process easier for companies unable to continue trading, said Dahlia Khalifa, the senior strategy adviser for the Doing Business 2010 report, which analyses the process of operating businesses across the globe on behalf of the World Bank’s International Finance Corporation. The report reveals it also costs UAE company owners an average of 30 per cent of the value of their estate to close their business.

“In the UAE, because there is not a very strong insolvency regime, there are actually very few companies that go through the insolvency process,” Ms Khalifa said at an event in Dubai to discuss the results of the Doing Business 2010 report.