Almost a year after the UAE came out with its bankruptcy law, a senior Saudi Arabian government official has revealed that the country will also begin implementing a new bankruptcy law as early as next year.
In an interview with Saudi-owned broadcaster Al Arabiya, Commerce and Investment Minister Majid al-Qusaibi said that such a law would be introduced as part of the efforts to revive the economy.
Saudi Arabia’s current regulatory framework does not allow any legal way to wind up the activities of indebted companies.
With the recent slowdown following the drop in oil prices, Saudi Arabia has been looking at plans and measures to restructure the economy and make it more attractive to outside investors.
“(The) bankruptcy law has been passed to the Shura Council, and we expect it to be implemented by the end of the first quarter of 2018,” the minister said in an interview with Al Arabiya.
The minister also revealed that Saudi Arabia is also working on new laws regarding commercial mortgages and commercial franchising, which will be passed to the Shura Council soon.
Saudi Arabia’s Shura Council is an appointed body that advises on new laws and functions in place of an elected parliament.
The law promises lower risks for those who want to run businesses in the country as it allows entrepreneurs to skip a jail term if their firms default on debt payment.