Bahrain launches Golden Licence to attract large-scale investment
Corporate Structuring / Bahrain
Bahrain a destination of choice for FDI - it has recently introduced the golden visa scheme and the Golden License scheme.
Law Update: Issue 359 - Real Estate & Construction and Hotels & Leisure
Rad El TrekiPartner,Head of Office – Bahrain
Yara FrotanAssociate,Corporate Structuring
The Kingdom of Bahrain’s long-standing reputation as a regional pioneer, its sophisticated and forward-thinking legal framework and its strategic location as the gateway to the neighbouring GCC states, perfectly positions it as an ideal port for foreign investment. Commensurate with its targeted aim of continuing to provide incentives and modernised systems - all of which will continue to make Bahrain a destination of choice for FDI - it has recently introduced the golden visa scheme and the Golden License scheme. This article touches on the introduction of the Golden License scheme targeted at companies, the golden visa scheme targeted at individuals and the relevant considerations of each scheme.
Introduced by Bahrain’s Cabinet, which was chaired by His Royal Highness Prince Salman bin Hamad Al Khalifa, Bahrain’s Crown Prince and Prime Minister, the Kingdom has announced the creation of a ‘Golden License’ targeted at encouraging and attracting further foreign investment.
The eligibility criteria include companies with large-scale investment and strategic projects, creating over 500 jobs in Bahrain, or companies with a proposed investment value of over $50M.
Companies availing of the Golden License are provided access to a number of privileges and benefit. These include services aiding in easing the obtaining of required infrastructure and utilities, prioritised allocation of land for investments, business licensing, obtaining permit approval, support from the Bahrain Development Bank, as well as the ability to seek the potential review of existing laws or regulations where necessary and applicable.
In addition, Golden License holders will be permitted streamlined access to services such as Tamkeen, the authority that supports the growth of enterprises in Bahrain, by way of offering programs and financial support in training and wages. Examples include:
Providing support in payment of wages of employees.
Offering a Business Development Program, supporting in covering expenses for approved services or items, based on the grant allocated to the company. Support schemes offered in relation to this program range from ICT to accounting and auditing, amongst other things.
Developing key professional skills through a mentorship program. Mentees are enabled to secure a mentor who can coach, providing honest feedback and helping to guide their growth.
To obtain the Golden License and supporting services, an entity would need to be established in Bahrain. The process of incorporating and entity in Bahrain is largely straightforward, and foreign ownership friendly. Restrictions on a majority of commercial activities have recently been further eased to further facilitate foreign ownership. This includes around 200 commercial activities permitting foreign ownership with a specified percentage of GCC ownership (e.g. potentially permitting up to 99.9% foreign ownership) and over 350 commercial activities open for 100% foreign ownership.
It should also be remembered that the overall costs of establishment and ongoing annual costs in Bahrain are generally noticeably lower in Bahrain than other neighbouring GCC states, with an annual governmental cost of as low as BHD 150 for companies to renew their Commercial Registration (CR). In addition to this, there are generally no income, sales or capital gains taxes in Bahrain except for certain entities that operate in the oil and gas sector. There is however a standard rate of 10% VAT in Bahrain.
The Kingdom’s sophisticated, modern and regional leading legal framework landscape and regime further evidences its ability and readiness to create a secure, business-friendly environment for foreign investors. The golden visa and license schemes are a further significant step forward in confirming Bahrain’s positioning as a business-friendly destination of choice for FDI.
The Golden Licence also complements the recently issued golden visa scheme. This new visa category offers expatriates a long-term residence visa, for up to ten years, enabling them to live or work in Bahrain, with unlimited entry and exit. An individual may be qualified to obtain a golden visa in accordance with the criteria below:
Where an applicant is retired, not residing in Bahrain and earning a basic salary of not less than BHD 4,000.
Where an applicant owns a property or more in Bahrain, provided that the combined value of all properties at the time of purchase must have been at least BHD 200,000.
If an applicant falls under the category of a ‘highly talented individual’.
Where an applicant has been working or retired in Bahrain for at least 5 years, with an average basic salary of at least BHD 2,000 during the past 5 years.
Once obtained, the golden visa can be renewed every 10 years, subject to the holder of the visa continuing to meet the criteria. The holder of the visa would need to spend at least 90 days in Bahrain, annually. Family members, including the applicant’s spouse, children and parents may obtain a ‘dependent’ residency stemming from the applicant’s golden visa.
The introduction of the Bahrain Golden Licence and golden visa schemes further confirms the Government of Bahrain’s long-standing commitment to increase Bahrain’s standing as a leading destination for FDI in the region, attract talent and create job opportunities for both expatriates and locals. This all stands to further contribute to Bahrain’s future economic growth, which in 2022 grew by 4.9%, the fastest pace recorded in Bahrain in a decade, and largely driven by non-hydrocarbon related industry[1].
In conclusion, the Kingdom’s sophisticated, modern and regional leading legal framework and regime further evidences its ability and readiness to create a secure, business-friendly environment for foreign investors. The golden visa and license schemes are a further step forward in confirming Bahrain’s positioning as a business-friendly destination of choice for FDI.
[1] Bahrain Information & eGovernment Authority
For further information,please contact Rad El Treki or Yara Frotan.
Published in June 2023
