Sheikh Khalifa U.A.E President issued federal bankruptcy law by decree

Sheikh Khalifa, the President, on Monday issued the long-awaited new federal bankruptcy law by decree, according to the state news agency Wam.

The law, which contains elements of bankruptcy protection laws from jurisdictions including France, Germany and the Netherlands, provides, for the first time, a comprehensive legal framework to help distressed companies avoid bankruptcy and liquidation.Under the terms of the federal constitution, the new law will come into effect three months from its publication in the country’s official legal gazette.

A senior official at the Ministry of Finance, who asked to remain anonymous, said that the new law had already been published in the gazette, and would come into effect in late December or early January. A copy of the new law seen by The National dates the law’s approval by the president from September 20.

The new law contains provisions to safeguard the rights of both creditors and debtors in insolvency situations, including measures that prioritise secured creditor rights and enable companies to restructure without unanimous creditor approval.

The law applies to companies established under the commercial company’s law, companies that are partly or fully owned by the federal or the local government, and companies and institutions established in free zones that are not governed by existing bankruptcy provisions. It does not apply to companies registered in the DIFC and the Abu Dhabi Global Market, or to private individuals.

The law will establish the Committee of Financial Restructuring (CFR), a new regulatory body which will oversee the procedures of financial restructuring outside the scope of the courts, have responsibility for the appointment of experts in the field of financial restructuring, and establish and maintain a national electronic database of individuals who have had bankruptcy rulings against them.

 

UAE Bankruptcy Law

Creditors will be able to initiate insolvency proceedings against companies or traders in cases where debts of Dh100,000 or more are unpaid for more than 30 days.

Insolvent companies will be able to avoid liquidation via four pathways set out in the new law, namely financial reorganisation, a pre-emptive settlement, financial restructuring and the raising of new funds.

The law also contains provisions blocking creditors from applying criminal charges against executive of insolvent companies for bounced cheques, when the company is undergoing a court-mandated restructuring process.

The approval of the new law drew praise from the country’s legal community.

"The law is a very important step for the creation of a healthy, transparent commercial environment in the UAE," said Essam Al Tamimi, senior partner at Al Tamimi and Company.

"In a nutshell it says that companies and traders have to pay what they owe or face consequences, while also giving them options for rescue and restructure where there is a realistic and constructive plan in place."

Mark Beer, chief executive of the DIFC Dispute Resolution Authority, said the approval of the new law was evidence of the efforts and commitment of the leadership of the UAE in ensuring that the country’s laws reflected the needs of a dynamic business environment.

"Working with the DIFC Courts and the Dubai World Tribunal, which also have the benefit of excellent restructuring regimes, I have seen first hand the benefits of a trusted and effective restructuring law in ensuring creditors are paid, jobs are protected and a business has the protection it needs to thrive," Mr Beer told The National.

"May I applaud all those who have worked so hard to bring the new federal law to this stage."

UAE opens consulate in Kerala

The UAE has opened a Consulate General in Kerala, India, and appointed Jamal Al Zaabi Consul-General to Kerala, to further ties between the two countries.

The opening of the second UAE consulate in India comes within the context of bolstering the growing relations between the two countries, UAE Ministry of Foreign Affairs and International Co-operation said.

"I am delighted to announce the opening of the new UAE consulate in the Indian state of Kerala. It represents an important achievement and a new boost for bilateral relations between the two friendly countries," said Under-Secretary at the UAE Ministry of Foreign Affairs and International Co-operation, Mohammed Mer Al Raisi, in a ceremony in the presence of Kerala Governor P Sathasivam, Kerala Chief Minister Pinarayi Vijayan, Assistant Under-Secretary for Consular Affairs at the UAE Ministry of Foreign Affairs and International Cooperation Ahmed Elham Al Dhaheri, Ambassador of the UAE to India Dr. Ahmed Abdulrahman Al Banna, a delegation from the Ministry of Interior and a group of notable political figures and businessmen from the UAE and India.

The opening of the consulate in Kerala is aimed at furthering co-operation and partnership between the two countries in the business sector and trade and economic cooperation as well as at the level of social and cultural exchange, he added.  

In collaboration with the interior ministry, the consulate will provide visa services for UAE citizens visiting Kerala and southern India, as well as residents of Kerala in particular, Al Dhaheri said, and noted this would further facilitate and speed up the entry of Indian workers to the UAE via e-gates at the country's points of entry.

Kerala, he said, is a global business and trade hub and an integral part of the fast-expanding partnership between the UAE and India. This achievement would enable the two countries to continue to build strong relations in Kerala, an important economic partner of the UAE, he added.

"We have a lot in common, from trade and investment to workforce. A large number of workers, who come to the UAE every year to realise their job ambitions and improve their living standards in our country, hail from Kerala, UAE Consul-General to Kerala Jamal Al Zaabi said.

The new consulate will play an effective role in bolstering ties with India through enhanced trade relations and increased cultural exchange and cooperation between the UAE and Kerala, he added.

The UAE Consulate General in Kerala will support the partnership between the two countries in the government, business and social sectors, consular services, diplomatic documents as well as resources for trade and exchange between them.

Non-Competition Clauses in UAE Labour Law: A 2026 Essential Guide

In the competitive UAE market, protecting intellectual property and client networks is a priority for every business. While the UAE Labour Law permits non-competition clauses to safeguard these interests, they are not a "blanket" protection. To be enforceable, these restrictions must balance the employer’s rights with the employee’s fundamental right to work.

The Legal Basis: Article 10 of Federal Decree-Law No. 33 of 2021

Under the current legal framework, if an employee’s role provides access to "business secrets" or sensitive "client know-how," an employer may include a non-compete provision. However, for this to be valid in a court of law or before the Ministry (MOHRE), it must meet three strict criteria:

1. Duration: The restriction must be limited to a maximum of two years (24 months) from the date of contract termination.
2. Geographical Scope: The ban must be restricted to the specific Emirates or regions where the employer’s business interests are active.
3. Type of Work: The clause must be limited to professional activities that directly compete with the employer’s specific trade.

When is a Non-Compete Unenforceable?

Even with a signed agreement, there are critical "fail-safes" that protect employees. The non-competition conditions will not apply if:

• The employer terminates the contract in violation of legal provisions.
• The employee terminates the contract due to a fault attributable to the employer (e.g., non-payment of wages or breach of contract).
• The employee is still within their probation period.
• The parties reach a written settlement, or a "buy-out" is agreed upon (often capped at three months' salary for certain sectors).

Strategic Advice for Employers and Professionals

For a non-compete to hold weight in 2026, specificity is key. UAE courts frequently strike down "vague" clauses. A clause that simply says "the employee cannot work in the UAE for any competitor" is often deemed too broad. Instead, the agreement should define the specific competitors or niche services that are off-limits.

Furthermore, if an employer discovers a breach, they must act quickly; the law requires legal action to be initiated within one year from the date the breach was discovered.

Quick Compliance Checklist

• Statutory Limit: Max 2 years.
• Execution: Can be signed at the start of or during employment; triggers only upon termination.
• Proof of Damage: The employer must generally prove that they have suffered (or will suffer) a tangible disadvantage from the employee’s new role.
• Exemptions: Certain professional categories identified by the Ministry may be exempt from non-compete restrictions regardless of the contract.

 

Wage protection decree in U.A.E, ensures employees’ full salaries on time

Abu Dhabi: The Ministry of Human Resources and Emiratisation will start implementing the newly launched wages protection decree on 3rd October 2016. The decree, launched by Saqr Ghobash, the Minister for Human Resources and Emiratisation, ensures employees’ full payment of their salaries on time.

Maher Al Obed, Assistant Undersecretary for the Inspections Sector, said: “The decree fairly contributes towards labour market stability as it safeguards employees while keeping business owners interests, salaries paid on time is a major contribution towards labour rights protection which is highly recognised by the UAE.”

“We value such decisions as it promotes labour relations which in turn secures a balanced labour market productivity, and eventually turns out with positive outcomes for both labourers and employers,” he said.

The decree highlights companies employing over 100 workers. Such companies must pay wages within a period not exceeding 10 days from the registered payday in the (WPS) wages protection system, if they fail, the ministry will stop granting them any additional work permits starting from the 16th day of delay.

“Two main scenarios should be considered in this matter, firstly, salary delays occur usually if the company fails to pay wages a month from the due date, the second, which refers to completely refraining wages, starts after entering into the second month, however, the decree shall refer to each case in a different matter,” Al Obed said.

According to the decree, if a company delays wages a month from the due date, which means the company has entered into refrainment period, the ministry shall inform the judicial authorities and other related parties to take all necessary punitive measures against the violating company, additionally, the ministry halts other companies owned by the same employer, plus forbid any upcoming projects foreseen by the same owner.

Furthermore, if a company continues to refrain wages, the ministry shall take necessary measures to use the company’s bank guarantee, then slapped by a downgrade to a third category company, plus enable their workers' mobility options to other companies.

“If the company fails to pay wages for 60 days from the due date, then administrative fines shall follow, in addition to registered fines for failing to pay wages a month from the due date, as stated above in the first scenario,” Al Obed added.

Administrative fines reach Dh5000 per worker’s delayed wage pay, stretching a maximum of Dh50,000 dirhams in events which include multiple workers protesting about deferred wages past 60 days.

Fortunately, the ministry lifts bans on violating companies allowing them to apply for new work permits only if they promptly paid deferred wages during the first late month, while the ban lasts for 60 days if companies fail to fund wages for more than two months.

According to the decree, companies that pay refrained salaries yet record such violations repetitively shall face a doubled duration ban.

On the other hand, if the ministry notes salary delays or refrains by a company that employs less than 100 employees, the current regulations shall apply, which includes work permits ban to fines to court referrals, however, only if the company fails to pay wages within 60 days. If the company repeats such violations over the span of one year, then, in this case, the ministry shall apply penalties declared for companies hiring over 100 workers.

The decree clearly states that the ministry shall not proceed with any transactions with companies that did not register in the (WPS), in addition, owners of these companies would be kept aside until the registration in the (WPS) is completed