Saudi Arabia is changing its bankruptcy laws in a move that should help the country diversify its economy away from oil.
The change, which came from King Salman in February, will undoubtedly help boost much-needed foreign investment in the kingdom. Thats because, up until now, there has not been a satisfactory way to deal with an insolvent corporation. Thats a significant disincentive to foreign and domestic business people to set up shop in the country.
The lack of bankruptcy legislation has acted as a key deterrent to entrepreneurs in Saudi Arabia as well as to the willingness of local banks to provide financing to business start-ups, states a recent report from Capital Economics
In the US, we used to lock people up when they went bankrup…
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