UAE President Sheikh Khalifa bin Zayed al-Nahyan has issued the country’s new federal bankruptcy law.

The president issued the Law Decree No. 9 for 2016 for the new bankruptcy law on 24 October, it was reported by state news agency Wam.

The long-awaited bankruptcy law sets out a legal framework for companies to avoid bankruptcy and liquidation.

MEED reported in early September that the UAE cabinet had approved the final draft of the bankruptcy law.

According to local news agency the National, the new law will come into effect in late December or early January. Under the federal constitution, new laws come into effect from when it is published in the legal gazette. According to the National, the law was approved by the president on 20 September.

The new law will protect the rights of creditors and debtors in insolvency cases and will apply to companies established under the Commercial Companies Law, companies owned partly or fully by federal or local governments and companies created in free zones that are not governed by bankruptcy provisions.