Electronic commerce, more than any other facet of the economy, holds the potential to transform the GCC in exciting ways over the next few years. Taking into consideration that mobile phone subscriptions have already outpaced population numbers throughout the region – by 2.1 times in Bahrain and the UAE, for instance – it is a clear signal that consumers and companies are keen to make transactions happen on the fly.
This is why the recent announcement of a series of new legislation and policy reforms focused on Bahraini e-commerce comes at such an opportune time. Businesses operating in Bahrain will experience vast benefits as the government takes steps to maintain the Kingdom’s position at the forefront of enabling a digital economy:
- Electronic Transferable Records Law: Modelled on the United Nations Commission on International Trade Law (UNCITRAL) e-commerce model laws, Bahrain has become the first country to enact an Electronic Transferable Records Law. This new piece of legislation allows for electronic transferable documents including bills of lading, promissory notes among others, equivalent to traditional commercial documentation issued on paper. This fully paperless approach allows the holder of the electronic documents to claim payment of a sum of money or delivery of certain goods, ultimately creating unparalleled efficiency in the logistics supply chain’s financial workflow. This modern new law further facilitates the future potential use of blockchain in FinTech and logistics.
- Electronic Communications and Transactions Law: By updating this existing regulation with provisions to align with the UN Convention on the Use of Electronic Communications in International Contracts, Bahrain further modernises the processes that facilitate e-transactions and reduces red tape in the systems that govern digital payments throughout the Kingdom. Such efficiencies will promote wider use of electronic communications in business and, ultimately, streamline financial workflows for firms in Bahrain.
We expect these enhancements to further fortify Bahrain’s competitiveness on a global scale by promoting confidence in overseas traders and investors. KPMG, for instance, has recognised the country’s low operating costs for ICT firms – one of the lowest in the GCC region – as a key differentiator that can serve to attract further investment into the Kingdom. In addition to sustaining one of the lowest costs in the GCC for cross-border connectivity, IT businesses encounter 25% cheaper commercial utility costs, as compared to the rest of the region. With the introduction of the new Electronic Transferable Records Law and revised Electronic Transactions Law, it is anticipated that the ultimate business benefits will be compounded to heighten efficiencies and revolutionise the manner in which locally based firms operate.
This latest tranche of legislation reflects Team Bahrain’s efforts to align regulations with technological developments, as well as the needs of entrepreneurs who have committed to the long-term growth of the GCC e-commerce landscape. By ensuring that industry and government sync their pace of advancement, the government has equipped our national economy to more closely embrace e-commerce in business-friendly Bahrain.