Introduction
Bankruptcy is never a good thing when it comes to business. It is a time of hardship and can test the patience and steadfastness of many businesspeople. However, with the assistance of business-friendly laws and procedures designed to aid, the steps to recovery or any other path that chosen may be far more bearable than they would otherwise usually be.
Bahrain is the smallest of the GCC nations when looking at its economy and GDP. However, it does still offer an excellent business environment along with world-class infrastructure and has, therefore, become a popular business destination.
To differentiate and make itself an attractive prospect to foreigners, Bahrain has been working on ensuring its regulatory and legislative structures are as friendly to foreign investors as possible. Most recently, it has introduced a new Bankruptcy law, and the hope is that it will assist with the growth of the country’s international image and grow the foreign business market.
New Bankruptcy Law
Bahrain has introduced its new Bankruptcy Law to draw in more significant numbers of foreign investors. With a more considerable amount of security offered to these foreign companies, there will likely be a more substantial number of potentials who will then choose the country to set up and invest therein.
The UAE and Saudi Arabia have also implemented Bankruptcy laws into their systems. The system introduced into Bahrain follows the US Chapter 11 Insolvency Legislation.
Under this legislation, upon becoming bankrupt, a company will be given the opportunity to reorganize. The management will have to consider their options, and this provides them with the time they need to make any tough decisions they may come face to face with, and attempt to fix the issue if possible. The hope has been that this push will instill a sense of confidence in the nation, and would show that they are business friendly and continuously looking to improve.
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