Long-awaited bankruptcy law sparks optimism in Egypt
The Egyptian parliament passed a new bankruptcy law to regulate the restructuring of viable but troubled companies, in a move experts say will boost the economy.
CAIRO — Egypt's parliament recently passed a bill designed to recharge the drained economy by streamlining the bankruptcy process, allowing viable companies to return to business more quickly.
On Jan. 29, parliament approved legislation to regulate debt restructuring, preventive composition (out-of-court settlement) and bankruptcy. The move created a wave of optimism in government and economic circles that this will boost the economy and improve the investment environment in Egypt.
The law includes 262 articles and regulates the financial and administrative restructuring of troubled but viable companies. It reduces the steps investors need to go through to enter bankruptcy and includes a mediation system between investors and their creditors designed to reduce litigation, which can damage their reputation.
As declaring bankruptcy can take years in Egyptian economic courts, the new law eliminates some provisions of Egyptian Trade Law on bankruptcy and composition, which caused many problems for investors.
