DUBAI (Reuters) - 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, Saudi-owned broadcaster Al Arabiya reported citing the kingdom’s commerce minister.
Under current legislation there is no easy way to wind up the activities of indebted companies in Saudi Arabia and the new law could help with government plans to restructure the economy and make it more attractive to outside investors.
“(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.
Saudi Arabia is also working on new laws regarding commercial mortgages and commercial franchising, Qusaibi said in New York on the sidelines of a business forum.
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, he said. The Shura Council is an appointed body that advises on new laws and functions in place of an elected parliament.
The International Monetary Fund cited the planned laws in May when it praised Saudi Arabia for making progress towards identifying and reducing obstacles to private sector growth.
Reporting by Sylvia Westall