Foreign Investors Offered Residency and Tax Relief Under New Draft Law

TDT | Manama

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Foreign investors may be offered permanent residency, tax relief and full ownership under a draft law due to be debated in Parliament on Tuesday. The proposal, backed by MP Ahmed Sabah Al Salloom and four others, lays out a scheme aimed at drawing money into sectors such as artificial intelligence, robotics, green technology and food security.

‘This proposal is rooted in Article 10 of the Constitution,’ said Mr Al Salloom, ‘which affirms that the national economy is founded on social justice and built on fair cooperation between public and private sectors, with the aim of achieving prosperity for citizens.’ He pointed to Article 92 as the legal footing allowing MPs to put forward draft legislation of this kind.

The law, would make Bahrain one of the few countries in the region to offer full ownership of investment projects to non-citizens, with the added benefit of permanent residence for the investor, their spouse, children and parents. Tax and customs waivers would apply to all machinery and equipment brought in for setting up or expanding projects, so long as they are kept in use for at least two years.

A dedicated desk within the Ministry of Industry and Commerce would handle all procedures related to eligible projects. Investors would have the right to send all net profits abroad, and could pass on ownership or pull out of a project entirely, subject to approval.

‘The heart of the draft lies in Article 3,’ Mr Al Salloom said. ‘It offers proper incentives for serious investors – land, residency, credit facilities through Tamkeen, and a clear path to set up and grow.’

At least 300,000 Dinars in capital would be required to qualify, and the business would have to operate in one of the designated fields. These include education, healthcare, green energy, cyber security, pharmaceuticals, and any other field the Minister may add by order.

Bahrainisation requirements would be brought in after five years, requiring half of the workforce to be Bahraini. Training schemes for locals would also be expected.

‘The idea is to back industries of the future while making sure Bahrainis benefit along the way,’ Mr Al Salloom said. ‘We are targeting a shift towards the Fourth Industrial Revolution.’

The draft law also lays out the investor’s duties: a feasibility study, audited records, written notice of when the project starts and finishes, and insurance covering buildings and equipment. Any breach may lead to the loss of all incentives and, if land was allocated by the government, its immediate return.

The Financial and Economic Affairs Committee, chaired by Mr Al Salloom, has recommended the proposal go ahead. Its report says the draft would encourage projects that add genuine value to the economy and lessen the country’s reliance on oil.

The Economic Development Board, in its reply, said many of the privileges in the draft already exist under current law or through bilateral agreements. It warned that tax breaks on all equipment may hurt state revenues, and said that setting up new offices risks making things slower, not smoother. The Bahrain Investors Centre, it argued, already performs much of what the proposed office would do.

It also pointed out that some rights already on the books – such as opening bank accounts or protecting business data – are not addressed in the proposal. A call was made for a more detailed study to test how well the proposal fits into Bahrain’s plans to broaden investment.

Even so, the Bahrain Businessmen’s Association welcomed the move, describing it as a step likely to draw projects that bring jobs and long-term benefit.