Parliament Preliminarily Approves Egypt’s First Ever Bankruptcy Law
The new law aims to protect investors facing financial woes as well as bumping up Egypt’s ranking in the World Banks’s Doing Business Report.
For the first time in the country’s legislative history, the parliament’s General Assembly have given preliminary approval to the country’s first law governing bankruptcy, debt restructuring, and preventive composition.
The law, which offers investors and debtors the option to officially file for bankruptcy, is expected to boost Egypt’s fledgling ranking in the World Bank’s Doing Business Report; a benchmark study by the World Bank with the intention of measuring regulations that directly affect a country’s business. In addition, the law aims to encourage investment and international cooperation.
As it stands, cases of insolvency, i.e. business not being able to pay debts, are usually referred to criminal courts, making businessmen and debtors directly at risk of prison time. With this new law, a mediating system would be put in place to avoid immediate criminal proceedings as well as simplifying business procedures, in addition to guaranteeing safe exit for bankrupt companies, not to mention creditor protection by making sure they get their dues paid.
The law was previously approved in January of 2017 under Dalia Khorshid, Egypt’s former Investment Minister, and it currently awaits approval by MPs prior to being ratified by the president.
Photo from AP.