Bahrain

Bahrain's Blueprint for Change: The New Era of Legislative Reform

Bahrain has in recent years sought to shift away from an economic dependency on oil through policy and legislative changes in line with their overall ambition of realising their Economic Vision 2030. The Kingdom’s Vision 2030 is an ambitious long-term plan that aims to foster increased private sector involvement, encourage a more competitive business environment, improve the well-being of its citizens and residents, and promote the efficiency and quality of its government services. A number of the policy and legislative reforms will manifest during the course of 2024, which will contribute to Bahrain's goals of increasing non-oil GDP, creating more jobs, enhancing productivity, and strengthening social protection.

Some examples of these reforms include the following:

Mandatory insurance scheme under the Health Insurance Law: Bahrain introduced a new Health Insurance Law in 2019 which is being implemented in stages. Plans are in place to soft launch the mandatory scheme for the expatriate community in Bahrain in 2024.
Amendment to the Social Insurance Law: Bahrain issued amendments to its Social Insurance Law providing that End of Service Gratuity payable to expatriates shall be payable through Bahrain’s Social Insurance Organisation. This means that the contributions will be payable by Employers to the Social Insurance Organisation, which will in turn be using such contributions to make payment to expatriate employees upon the termination of their employment. This Law aims to further secure pension rights by providing the SIO with additional liquidity and to stem the practice of underreporting expatriate’s salary.

Bahrain’s comprehensive agenda of legal and regulatory reforms will enhance its fiscal sustainability, attract private investment in key sectors, and foster human capital development. The overall vision will transform Bahrain into a diversified and competitive economy that provides opportunities for all.

Rad El Treki
Partner, Head of Office - Bahrain

Noor Al Rayes
Partner, Head of Dispute Resolution – Bahrain

Amendments to Real Estate Regulations Law: Bahrain’s Real Estate Regulatory Authority (“RERA”) has recently issued its proposed amendments to Bahrain’s Real Estate regulatory Law. This amendment provides further clarity as to the management of owners’ associations and regulates the profession of real estate management. This comes as part of the trend of initiatives undertaken by RERA to secure and elevate the profile of Bahrain’s Real Estate Sector.
Building regulations Law: The law is still in the draft stage. However, it has been gaining momentum lately with the Ministry of Municipality Affairs releasing the law for public consultation. The Law aims to provide greater oversight and investigative authority to the Ministry, to further safeguard and regulate the process of Building in Bahrain. This law is expected to be promulgated in late 2024.
Movable Transactions Law: In line with recent emerging trends, Bahrain has taken initial steps towards legislating the mortgage of movable assets. The law intends to create an independent registrar where such mortgages are executed and documented. This law further provides creditors with the right to seize mortgaged movable assets and auction them without the need to obtain a Court order. While passing such law has been problematic in the past, it seems that it has finally garnered the required governmental support and is expected to be passed in late 2024.

Tax on foreign investments: One of the latest laws currently being discussed within Parliament is the creation of a tax applicable to foreign investments. This law intends to limit the amount of profits that a foreign investor/company can take outside Bahrain. It remains in early stages and is unlikely to be issued in 2024, however we anticipate that it is nevertheless expected to create a buzz once further details of the law are made public.

Bahrain’s comprehensive agenda of legal and regulatory reforms will enhance its fiscal sustainability, attract private investment in key sectors, and foster human capital development. The overall vision will transform Bahrain into a diversified and competitive economy that provides opportunities for all. By implementing these reforms, Bahrain will be better prepared to face the challenges and opportunities of the post-pandemic world and lay a solid foundation for its ambitious goals for 2024 and beyond.

Contact Partners:
Rad El Treki
Noor Al Rayes

Contributing Authors:
Hassan Malik
Ehsan Ahmed