UAE’s Emergency Bankruptcy Protections for Businesses Hit by Iran War

For companies experiencing financial pressure since February 28, 2026, eligibility hinges on a crucial requirement: they must be able to demonstrate that their financial distress was directly caused by the declared emergency.

By Entrepreneur Middle East Staff | Aug 13, 2026

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The UAE has activated emergency bankruptcy protections for businesses financially affected by the Iran war, giving qualifying companies more time and flexibility to restructure their debts while limiting creditors’ ability to force them into insolvency.

The measures apply to businesses that can demonstrate a direct link between their financial difficulties and the conflict, and that seek court protection following the escalation of hostilities on February 28, 2026.

The framework was introduced under Cabinet Decision No. 94/2026, issued on June 1, 2026, which activated Title 5 of Federal Decree-Law No. 51/2023, the UAE’s Financial Reorganization and Bankruptcy Law. The provisions apply from February 28 and will remain in effect until the Cabinet determines an end date.

The move effectively creates an emergency restructuring route for businesses facing financial pressure due to the conflict.

Under the measures, the Bankruptcy Court can approve an application and allow proceedings to move forward without appointing a trustee, provided the debtor can establish that its financial distress was caused by the emergency.

Affected businesses can request up to 40 days to negotiate a settlement with creditors, while an agreed settlement can run for as long as 12 months from the date it receives court approval.

A settlement backed by creditors representing at least two-thirds of the value of debts participating in the negotiations can also become binding on all creditors, including those that did not take part in the process.

The framework provides further protection against creditor action during the emergency period. Courts are required to postpone consideration of creditor applications seeking to open bankruptcy proceedings against qualifying businesses.

Assets considered necessary for a company to continue operating are also protected from precautionary measures, unless the court determines that they are unrelated to the conduct of the business.

Companies that had already entered proceedings before the emergency may receive additional time. Courts have the authority to extend existing procedural deadlines by up to twice their ordinary duration.

The measures also provide specific protection for company leadership. Board members and managers will not be held liable for using company assets to pay regular wages and salaries required to maintain business continuity during the emergency. They must keep company accounts updated, act cautiously and in good faith, and continue protecting the company’s objectives and financial assets.

Businesses may also gain access to fresh capital while restructuring. Courts can authorize new secured or unsecured financing that takes priority over existing ordinary debt. Subject to the conditions of the law, new financing can also be secured against mortgaged or unmortgaged assets.