The new law on bankruptcy in Bahrain intends to updates rules that regulate insolvency proceedings and that strengthen the country's business community. Some of the changes involve the development of a system concerning which the rehabilitation of institutions or individuals that file for bankruptcy can take place whenever possible. Officials hope that the legislation will remedy the shortcoming of the existing bankruptcy law.

The new legislation also contains provisions to guarantee "equitable distribution among creditors under the rule of preferential, preferred and ordinary rights" in the event of a default and ensures equal treatment of creditor claims. The aim of the government in implementing this new legislation is to improve impartiality and transparency as well as to improve the time frames in which the bankruptcy process operates. Another inclusion in this new law is the regulation of cross-border restructuring and bankruptcy procedures which were lacking in the previous legislation.

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