The short answer
A UAE company in financial difficulty has more options than liquidation. Federal Decree-Law No. 51 of 2023, in force since May 2024, offers out-of-court restructuring, composition, court-supervised restructuring and, as a last resort, bankruptcy and liquidation. It covers companies, licensed civil companies and individual traders, not private individuals.
What procedures does the law offer?
Out-of-court consensual restructuring, composition procedures, financial restructuring under court supervision, new financing on statutory terms, and conversion to bankruptcy and liquidation of the debtor's assets, with Cabinet Resolution No. 94 of 2024 as the executive regulations (UAE Government portal).
Who does the bankruptcy law cover?
Companies under the Commercial Companies Law, natural persons who are traders and licensed civil companies (UAE Government portal). Private individuals with personal debts fall under a separate insolvency regime.
“The law does not apply to natural individuals.”
What changed with the 2023 law?
Restructuring stays now last until a plan is ratified, a rejected plan no longer leads automatically to bankruptcy, court decisions can be appealed within 30 days, and managers and board members can be held liable for actions in the two years before payments stopped (Gulf Business on Federal Decree-Law No. 51 of 2023).
How do accountants help in a restructuring?
By producing what creditors and the court will rely on: a reliable statement of assets and liabilities, a cash-flow forecast, a viability review and a plan that shows creditors a better outcome than liquidation. Where the business cannot be saved, we support the liquidation and the liquidation audit.
Frequently asked questions
Is bankruptcy the same as liquidation?
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No. Liquidation can be voluntary for a solvent company; bankruptcy is a court process for a company that cannot pay its debts.
Can directors be liable?
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Yes. Managers and board members can be held liable for actions in the two years before cessation of payments.
Does the law apply in DIFC and ADGM?
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Those centres have their own insolvency regulations; we advise on which regime applies.
Sources
- UAE law on bankruptcy (Federal Decree-Law No. 51 of 2023 and Cabinet Resolution No. 94 of 2024) — The official portal of the UAE Government (u.ae). Checked 17 October 2026.
- 7 key provisions of the UAE's new bankruptcy law (Federal Decree-Law No. 51 of 2023) — Gulf Business. Checked 17 October 2026.
- Liquidation of companies in the UAE (Federal Decree-Law No. 32 of 2021) — LY Lawyers. Checked 17 October 2026.