DILI (TOP) - The National Parliament through the ordinary plenary session on 2 June 2025, approved in general the Bill Number 13/VI(2.a) - Insolvency Recovery Code, with 49 votes in favor and 2 abstentions.
The "Insolvency Recovery Code Bill" or Insolvency and Bankruptcy Code (IBC) isย a law that provides a framework for resolving the insolvency of companies, individuals, and partnerships in a time-bound manner.ย The IBC aims to maximize the value of assets, promote entrepreneurship, and balance the interests of all stakeholders.ย
Deputy Prime Minister and Coordinating Minister for Economic Affairs, Minister of Tourism and Environment, Dato' Seri Francisco Kalbuadi Lay explained, the Insolvency Recovery Code Bill is very important to favor and increase investor confidence in the business sector in Timor-Leste.
โBecause until now TL does not have an effective regime on insolvency, and this situation can damage the functioning of the market for entrepreneurs,โ explained Deputy Prime Minister and Minister Coordinator for Economic Affairs, Minister of Tourism and Environment, Dato' Seri Francisco Kalbuadi Lay during the plenary session of the National Parliament, Monday, June 2 2025.
The Vice-PM said that the Bill has implemented international commitments, including the World Trade Organization (WTO) and the ASEAN integration process to provide solutions to the problems faced by entrepreneurs in unstable situations.
The main objective of this Bill is to create a clear legal regime to allow companies to recover in the event of insolvency or if feasible and close companies that are unlikely to recover.
"This advantage is to give priority to companies to recover if it is not feasible to close the liquidation; establish efficient mechanisms such as a counter for recovery and insolvency BRI, and recovery administrator with insolvency or (ARI) as an entity responsible for recovery and insolvency.
The Bill also emphasizes Government-led administrative solutions to ensure effectiveness and supervision and adjust to reality in Timor.
The Bill is also to ensure economic stability, helping companies that have financial problems not to give direct value but, receive time or will give the opportunity to reorganize to continue operating.
It also ensures jobs for Timorese, ensures companies and gives time to recover so that citizens can continue in the companies that have been recovered. This Bill can provide clarity on insolvency, can give confidence to investors and financial institutions to invest in Timor-Leste because, they know that the legal system can solve debt problems fairly.
The result of the vote was 49 in favor and 2 abstentions. The law was passed in general.
After approval, the Chair announced that the specialty discussion was handed over to Committee A and Committee D.
