Bahrain: Parliament Passes Bill Mandating Advance Notice or Full Compensation

The Daily Tribune, 30 April 2025: Bahrain’s Parliament has approved a bill amending Bahrain Law No. 36/2012 (labour law), which would require employers to provide advance notice or full compensation for economic dismissals

The bill, has now moved to the Shura Council for review, and will set stricter conditions for terminating employment due to economic reasons, such as business closures or changes in production methods.

The proposal would require employer to pay full compensation unless they have notified the Labour Ministry 60 days before informing the workers of dismissal, and have provided recent audited financial statements or financial records covering the last three years, depending on the circumstances. In cases where both a Bahraini and a foreign worker hold the same job with similar experience and skill, the Bahraini must be retained unless the company is closing entirely. Failure to meet these conditions would lead to all payments under Article 111 of Bahrain Law No. 36/2012 being made. If the requirements are met only half the amount would be payable.

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Bahrain: Legislative Committee Begins Deliberations on New Law for Legal Profession

Akhbar Al Khaleej, 8 April 2025: Bahrain’s Legislative Committee has begun discussions on a proposed law to regulate the legal profession.

The proposal, has been prioritised for swift consideration and aims to regulate the profession as mandated by the constitution. The committee aims to finalise its report within a month, before the end of the current legislative session.

The proposed law would allow the Minister of Justice to establish law firms. Comments have been sought by the committees from bodies, including the Ministry of Justice, the Supreme Judicial Council, the Bahrain Bar Association, and the Bahrain Chamber of Commerce and Industry.

The General Secretariat’s Studies Department has also been tasked with conducting a comparative study of legal profession regulations in other countries to identify best practices.

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Bahrain: Court Rulings to be Reviewed for Possible Legal Changes

Daily Tribune, 30 March 2025: The Minister of Legal Affairs has stated judgments from Bahrain’s top courts are being reviewed to see if the country’s laws need to be reformed.

The Minister told the Parliament Court of Cassation judgments were being reviewed to see if there are any gaps or inconsistencies in the legislation. While some jurisdictions allow judges to call for changes to the law, this is not the case in Bahrain. The Ministry of Legal Affairs works closely with the Legislation and Legal Opinions Commission on new laws. The Ministry also reviews international laws and drafts possible legislation. The commission is in charge of the final wording and also draws up regulations and government decisions.

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Bahrain: Parliament Approves Reduction in Housing Loan Deductions and Interest Rates

The Daily Tribune, 19 March 2025: Bahrain’s Parliament has approved a reduction in housing loan deductions and interest rates to ease financial pressures on citizens.

The Parliament has passed a proposal to lower the monthly deduction for housing services from 25% to 20% of salaries. This decision aims to ease the financial burden on Bahraini citizens who are receiving housing loans. Additionally, Members of Parliament urged the Ministry of Housing and Urban Planning to collaborate with Eskan Bank to reduce the overall interest paid on housing loans by 20%.

Currently, citizens pay up to half the loan value in interest alone.

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Bahrain: Updates VAT Guide for Imports and Exports

The Kingdom of Bahrain’s National Bureau of Revenue (NBR) has released an updated version of the Imports and Exports VAT Guide.

This comprehensive document offers essential guidance for businesses involved in international trade in Bahrain, detailing the VAT treatment of imports and exports.

It covers key areas such as VAT liability on imports, conditions for zero-rating exports, and compliance requirements for businesses engaged in cross-border transactions.

A notable update in the guide is the revision of Section 1.2, which provides enhanced details on the VAT treatment of goods exports.

The guide reaffirms that exports of goods from Bahrain are subject to a 0% VAT rate, provided they meet specific conditions.

To qualify as an export and benefit from zero-rating, goods must be shipped from Bahrain to a destination outside the Implementing States within 90 days from the date of supply.

Additionally, the goods must remain unchanged, unused, and unsold before leaving Bahrain.

Suppliers are required to maintain valid export documentation to prove compliance with these conditions, as failure to do so may result in the transaction being treated as a domestic supply subject to a 10% VAT rate.

The most significant update involves a new subsection under Section 1.2 titled “Multiple Supplies Resulting in a Single Export.”

The guide clarifies that when multiple transactions culminate in a single export, only the final supply in the chain will qualify for zero-rating, provided all export conditions are met.

Any preceding transactions in the supply chain will be treated as domestic supplies and will be subject to a 10% VAT rate.

This change directly impacts businesses involved in multi-step transactions where goods are initially sold within Bahrain before being exported.

For instance, if a VAT-registered supplier in Bahrain sells goods to another Bahrain-based entity, which then arranges for the direct export of those goods to a customer outside Bahrain, the initial transaction within Bahrain will be subject to a 10% VAT rate, while the final sale to the overseas customer will be zero-rated.

The supplier responsible for the export must ensure they retain documentation proving the outbound destination of the shipment to apply the 0% VAT rate.

These updates underscore the importance of accurate VAT classification and proper documentation for businesses engaged in imports and exports.

Companies are advised to review their VAT compliance procedures to ensure they correctly apply zero-rating to exports and account for VAT on domestic transactions preceding an export.

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Bahrain: Launches Remote Notarisation Service

The Daily Tribune, 4 March 2025: The Justice, Islamic Affairs, and Endowments Ministry, in partnership with the Information and eGovernment Authority, has launched the Remote Notarisation Service in Bahrain.

This service, provided by private notaries, enables digital document certification, enhancing convenience and efficiency.

The remote notarisation service is accessible through the official website, https://notary.moj.gov.bh, and will initially be optional, gradually expanding to cover specific transaction types in its first phase.

Users are encouraged to register via the Government Notification System (Notices) on the National Portal, bahrain.bh, and keep their contact information updated for service access.

This initiative underscores the Ministry’s dedication to digital transformation, offering flexible solutions to meet the needs of the community, businesses, and investors.

It aims to save time and streamline notarisation and certification processes.

The service eliminates the need for in-person visits and paper-based transactions, utilising Blockchain technology for secure, immutable digital transactions.

It also supports electronic signatures through a One-Time Password (OTP), removing the necessity for handwritten signatures.

Users can inquire about and cancel their notarisation transactions as needed.

The introduction of this service is set to expand the private sector’s role in notarisation services, with the Ministry maintaining oversight and regulation of transactions conducted by licensed private notaries.

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Bahrain: Tightens Advertising Regulations

The Daily Tribune, 26 February 2025: Bahrain is set to impose stricter penalties on misleading advertising, with a new government-drafted bill proposing fines of up to BD20,000 and potential jail time for offenders.

The legislation, currently under review by Parliament’s Public Utilities and Environment Committee, aims to eliminate harmful advertising practices and streamline the licensing process.

The bill seeks to amend Bahrain Law No. 14/1973, introducing tighter controls on advertising, particularly for roadside promotions and commercial displays overseen by the Municipalities Affairs Ministry.

Under the proposed regulations, violations such as advertising without a licence, breaching licence conditions, providing false information, or using unlawful means to secure a permit could result in jail terms or fines ranging from BD1,000 to BD20,000.

Additionally, obstructing ministry inspectors or concealing necessary records and documents would incur penalties.

Each infraction would be treated individually, with courts mandated to order the removal of unauthorised advertisements at the advertiser’s expense.

The bill defines advertising as any medium intended to inform the public or a specific group about a product, service, or offering, encompassing visual, audio, or illuminated adverts, as well as those made from materials like wood, metal, paper, fabric, plastic, or glass.

Advertisers would be required to obtain prior approval from the relevant authority before displaying content.

The ministry would have the authority to inspect advertisements and remove those that violate the rules, providing advertisers with at least 15 days’ notice before removal and requiring them to cover the cost of restoring the site.

The ministry could also revoke an advertising licence permanently or temporarily.

Penalties would apply to each offending advertisement, and anyone who removes, damages, or defaces a licensed advertisement, or any part of it, would face a separate fine of up to BD1,000.

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