UAE adopts largest legislative reform in its history

Eudore R. Chand

Factoring and Transfer of Civil Accounts Receivables: The law is the first federal regulation in the United Arab Emirates dealing specifically with factoring and the assignment of receivables, it provides a new regulatory framework which sets out the legal requirements for assignments and transfers of receivables, validity and perfection requirements, as well as the rules for determining priority amongst competing claims over assigned receivables.

Factoring, a financing arrangement that enables a business to sell its receivables, aims at further supporting the business environment and SME’s. Factoring is a type of financial transaction in which a business sells its invoices to a factoring company.

The law organizes factoring legal requirements including the assignment of receivables and perfection. The new law applies broadly to any assignment of receivables made as part of commercial or civil transactions.

Commercial Companies Law [next page]