Qatar’s Proposed Bankruptcy Law – A Modern, Pro‑Growth Framework

4 min 52 sec January 16, 2026 (Edited)

Introduction

Qatar is poised to overhaul its bankruptcy framework with a new draft bankruptcy law designed to modernize commercial legislation, enhance creditor confidence, and support sustainable business recovery.

The Ministry of Commerce and Industry recently convened a seminar to review key provisions and solicit private-sector feedback. The proposed law aims to create a fair, stable business environment that protects both companies and creditors while strengthening overall economic competitiveness.

This article will discuss the current bankruptcy landscape and the projected impact a new law will have on Qatari businesses.

The Current Landscape in Qatar

Today, bankruptcy on the Qatari mainland is governed primarily by Articles 606–846 of Law No. 27 of 2006 (“the Commercial Transactions Law”), which regulates declaration of bankruptcy, effects on the debtor and creditors, management of the estate, judicial composition, preventive composition, and bankruptcy-related offenses. The law permits creditors with due and undisputed commercial debts to seek a declaration of bankruptcy upon suspension of payment, and sets procedures for debtor-initiated filings, provisional dates for cessation of payments, asset claw-back, creditor verification, and compositions. While comprehensive, the system has historically seen relatively few bankruptcies, and proceedings are handled by ordinary courts rather than specialist bankruptcy benches, a feature that can affect speed and predictability.

The Qatar Financial Centre (“QFC”) operates its own bankruptcy regime, influenced by common law principles and offering administration tools that aim to rescue viable businesses, including moratoria on enforcement during administration and robust powers for administrators. This dual-track landscape highlights a contrast between a codified civil law regime in the State and a more common law-oriented framework in the QFC, a divergence that has informed investor preferences and expectations. The ministry’s latest consultation indicates an intention to update the mainland framework to be more transparent, efficient, and growth-supportive, integrating lessons from practice and stakeholder feedback.

Reform of the Bankruptcy regime

The draft’s projected direction aligns with international best practices already partially embedded in existing law through preventive composition and structured creditor engagement. Preventive composition presently allows traders whose affairs are disordered to seek court-supervised relief before bankruptcy, with thresholds, disclosure obligations, and voting majorities that aim to ensure fairness, creditor participation, and enforceability.

At a procedural level, the current code establishes intensive documentation standards, early estate protections, an official receiver for oversight, and a bankruptcy manager for administration—mechanisms that enhance order and transparency. A new law is likely to streamline timelines, calibrate thresholds for small-business cases, and fortify supervision, building on existing small-business bankruptcy simplifications that permit shortened deadlines and consolidated distributions. The appointment of a bankruptcy manager and the role of the official receiver are expressly provided, with expedited execution to preserve value.

The framework already empowers the official receiver to expedite execution without bond and to appoint a manager with defined reporting and oversight.

Critically, any reform that clarifies court jurisdiction, harmonizes creditor classifications, and provides tools like moratoria or enhanced administrator powers could materially reduce liquidation bias and support reorganizations. The QFC’s administration model—prioritizing rescue, pausing enforcement, and centralizing control—illustrates how modern tools may be adapted for the state system to drive going-concern outcomes.

The Projected Impact of the Draft Law

First, a clearer, more predictable bankruptcy regime is expected to reduce recovery uncertainty and legal friction, lowering the risk premium on credit. When creditors have confidence that claims will be processed efficiently and fairly, lending costs can decline, and the availability of credit can improve, particularly for SMEs that are most sensitive to pricing. The existing code already prioritizes order by suspending individual actions and centralizing verification; strengthening these features should further stabilize creditor expectations.

Second, early-intervention pathways such as preventive composition—if streamlined and more widely accessible—can salvage viable enterprises, preserve jobs, and protect supplier ecosystems. The code’s current preventive composition procedures impose disciplined disclosures, voting thresholds, and court ratification; refining these mechanics to minimize delay and facilitate post-approval monitoring can increase successful restructurings.

Third, investor sentiment stands to benefit. Seminar participants explicitly linked reforms to increased investor confidence and competitiveness, mirroring global experience where transparent bankruptcy systems underpin deeper capital markets and attract long-term investment. By embedding rescue culture, clarifying cross-creditor bargaining rules, and ensuring equitable treatment, the draft law can align Qatar more closely with international benchmarks while reflecting local legal traditions.

Fourth, institutional capacity and court process improvements can accelerate case timelines and reduce value erosion. The current law equips the official receiver and bankruptcy manager with oversight and management tools; codifying performance standards, time-bound milestones, and digital notifications can materially raise procedural efficiency. The existing small-business track offers a template for proportionality in simpler cases, reducing cost and delay for lower-value estates.

Finally, alignment with the QFC’s best practices in administration can encourage convergence toward a unified business experience across jurisdictions. While the QFC’s common-law influenced framework already supports administration, moratoria, and creditor-centric reorganization, the national draft may adapt compatible tools to the civil-law context, giving investors a coherent and familiar set of options whether operating inside or outside the QFC.

Conclusion

Qatar’s draft bankruptcy law is an important shift toward a more transparent, efficient, and stakeholder-responsive bankruptcy framework—one that aims to balance creditor recoveries with preservation of viable businesses, and to align procedures with market realities. Building on an already comprehensive statutory base in Law No. 27 of 2006 and informed by the coexisting QFC model, the draft law will aim to codify clearer entry triggers, timely moratoria, robust plan mechanics, and calibrated secured-creditor treatment that together reduce uncertainty and encourage negotiated solutions. If implemented as envisioned, the law should support healthier credit formation, promote enterprise resilience, and enhance investor confidence—key pillars of Qatar’s broader competitiveness agenda.

We will monitor publication of the new law and issue a further update promptly after it is promulgated, setting out the law’s final text, key operative provisions, and practical implications for stakeholders.