Saudi Arabia will begin implementing a new bankruptcy law early next year as part of efforts to attract foreign investment and encourage private sector activity, Reuters reports, citing Saudi-owned broadcaster Al Arabiya which aired comments from Minister of Commerce and Investment Dr. Majed Al-Qassabi.
“(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,” Commerce and Investment Minister Majid al-Qusaibi said in an interview according to Al Arabiya’s website.
Minister Al-Qassabi is in New York, and said that the Kingdom is also working “on new laws regarding commercial mortgages and commercial franchising…The commercial mortgages measures will be passed to the Shura Council in the next two to three weeks while the commercial franchising regulations should follow soon after,” Al-Qassabi said.
Bankruptcy laws are good for the economy and protect individuals from debts incurred when undertaking enterprise, which removes a deterrent for entrepreneurs from starting a new business. Without bankruptcy laws, individuals are handcuffed by their debt from a failed business venture forever.
In June, law office Al Tamimi and Co. published on the company’s website that the Ministry was in the latter stages of reforming the Kingdom’s bankruptcy laws and regulations, noting the new Law is intended to replace certain sections in the Commercial Court Law and the Bankruptcy Protecting Settlement Law dealing with bankruptcy.