Egypt: Investment Minister: Bankruptcy Law Comes at Critical Time, Encourages Investment
Source: www.export-egypt.com 1/28/2018
Minister of Investment and International Cooperation Sahar Nasr said the bankruptcy law approved by the Egyptian parliament comes at a critical time in Egypt's history and would encourage investment.
Commenting on the parliament's approving the law with a two-third majority vote, the minister said the law would support employees, especially in the small- and micro-scale businesses and would ease the entry and exit of individuals or companies from the business market.
Responding to an inquiry from one of the lawmakers on the impact of such law on the ground, Nasr said the Ministry would swiftly work on activating the law upon its ratification by the president, adding that measures are underway to develop the investors' service centers to operate according to the latest technologies to facilitate the establishment of new companies or modify its activities.
The law regulates the financial and administrative restructuring for failed projects and companies.
The new law abolishes prison sentences in bankruptcy cases and limits punishments to a fine.
It also aims to minimize the need for companies or individuals to resort to courts and simplify post-bankruptcy procedures.
Difficulty in exiting the Egyptian market had been a concern among investors, a reason which lowered the country's ranking on the World Bank's Doing Business Index.
Until now, Egypt has had no specific law on bankruptcy, meaning failed companies have had to go to court on a case-by-case basis, which caused difficulties such as long judicial procedures.
The new law will allow any business that is close to bankruptcy to have the option of conciliation with its creditors or restructuring its financial position.