Bahrain Government Regulations on Business

Government business regulations have the capacity to affect nearly every aspect of business, from employment practices to advertising, business structure, and beyond. And while some regulations may be necessary to ensure workers’ rights, protect natural resources, and help hold business organisations accountable for their actions, there comes a time when unnecessarily strict regulations can end up doing more harm than good. 

Government regulations on business — including taxes, labour and employment laws, antitrust measures, environmental mandates, and permits and licences — may place unnecessary additional strain on corporations, forcing them to reallocate resources to ensure compliance and meet changing standards. Perhaps even more than that, the excessive complexity of many of these regulations often leave businesses baffled, forcing them to employ specialised legal counsel to navigate convoluted laws and avoid the penalties that come from noncompliance.
To protect assets and ensure essential operational freedoms, businesses will sometimes relocate their operations to less-autocratic regions. And today, possibly the most business-friendly region in the world is the Kingdom of Bahrain.

Bahrain’s Regulations Make It Easier to Do Business

Bahrain’s past has contributed largely to its progressive business environment. The Kingdom was the first in the Middle East to discover oil, educate women and develop a banking industry. They also were among the first in the region to transition to open banking and deregulate the telecoms industry. The forward-thinking of the nation has allowed Bahrain to create an environment where businesses can operate seamlessly. Bahrain’s government is dedicated to creating and maintaining this business-positive environment, and in helping foreign investors achieve success.

As such, Bahrain’s laws and regulations are designed to empower business, not restrict it. Here, we take a close look at Bahrain government regulations on business, and the positive impact they have on those organisations that call Bahrain their home.

Although applying for construction permits is often one of the most complicated aspects of doing business, Bahrain has created a simplified process designed to make permit requests easy. By accessing Benayat, the official Building Permit Portal of the Kingdom of Bahrain, businesses can apply for new permits, track ongoing applications, and even access an interactive map of the Kingdom to view regional property requirements.

Often, establishing a new business, or moving a business to a new location, requires taking out a loan. In Bahrain, getting credit is a simple process, supported by multiple recent business reforms. These reforms are aimed at improving the availability of credit information and increasing access to credit by prioritizing secured creditors during insolvency proceedings.

Strong legal protections give minority investors confidence in their investments, improving corporate governance while reducing the high risk of self-dealing that comes from concentrated ownership. Bahrain supports minority investors, clarifying control structures, increasing shareholders’ rights, giving them a larger voice in major decisions, and requiring increased corporate transparency.

As previously addressed, businesses depend on the government to provide essential infrastructure and protection. Taxes supply the revenue that governments use to pay for these services. However, by decreasing taxes on businesses, governments may create economic growth. With fewer taxes, organisations can invest more money in innovation, hiring, and wages. Bahrain’s business tax reform solutions have created a positive economic environment, with 0% corporate tax rates, and no personal income taxes, wealth gain taxes, or capital gains taxes.

Unnecessarily-cumbersome border laws and standards governing international trade hamper the global economy, prevent certain developing nations from participating, and impose barriers against foreign goods and investment. The Kingdom of Bahrain is committed to supporting trade across borders; government and business reforms within the last ten years have modernised essential border processes, allowing for faster access, reduced time needed to import, and increased data accuracy. And, because Bahrain is in an ideal location for trading across the Middle East and North Africa (MENA), increasing trade across borders gives businesses easy access to lucrative markets unavailable in other parts of the world.

Laws and contracts offer protection to businesses and are essential components, not only in economic development but also in business growth. Nations capable of enforcing business contracts are generally capable of offering better credit and an improved business climate overall. Bahrain enjoys a capable and fair court system, enforcing contracts and managing essential case data with the help of a specialised commercial court and advanced electronic management systems.

Occasionally, even successful businesses will run into the issue of insolvency. When this happens, insolvency systems are responsible for helping profitable organisations restructure and reorganise their debt, avoiding liquidation in the process. At the same time, insolvency laws help protect business leaders from taking high-risk loans that could lead to bankruptcy. The ability to effectively resolve insolvency is a mark of a powerful economy, one in which lenders and borrowers can rely on fairness and support in protecting their valuable assets. Bahrain recently overhauled its insolvency framework, improving the balance between borrower and creditor. These new reforms give debtors the right to initiate reorganization procedures, while also including provisions on post-commencement financing and improving voting arrangements.

The number of increased reforms and reduced regulations all attests to Bahrain’s commitment to supporting business. And this support goes beyond laws — new IT initiatives, advancements and services are revolutionizing business in the Kingdom.

For example, Bahrain has adopted a cloud-first policy, wherein information and communication technologies are modernised for increased security, efficiency and productivity while reducing associated costs. Additionally, the Kingdom is supporting FinTech advancement, by creating FinTech Bay, the leading FinTech hub in the Middle East and Africa. Finally, the National Bank of Bahrain is the first financial institution in MENA to provide open banking, allowing individuals and businesses to link information between bank accounts and authorised third parties, and access financial assets and liabilities from a single mobile app or online banking service. In short, Bahrain is investing in businesses. And in return, businesses from around the world are investing in Bahrain.

Setting up in Bahrain

Taken all together, these regulations, laws, policies, and advancements create an environment of business-friendliness in one of the most lucrative markets in the world. Organisations both foreign and domestic can operate securely with the knowledge that the government is dedicated to supporting them in their success. 

Various government-sponsored businesses tools and resources offer increased usability and accessibility in dealing with sometimes complex licensing and compliance issues. Credit is simple to secure, and insolvency procedures are fair and aboveboard. Business contracts receive close attention and are defended by an effective legal system. And through it all, businesses enjoy decreased taxation, increased operational freedom, and ongoing IT innovation sponsored and supported by Bahrain’s forward-thinking leadership.
If you’re interested in setting up a business in Bahrain, there’s no better time than now. The Kingdom of Bahrain welcomes outside businesses, with government regulations designed to ensure optimal support while cutting away unnecessary hurdles that might block your success. Click here to learn more, and get ready to experience the advantages of operating in the world’s most business-friendly nation.

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