Investors face bank hurdle

Manama : Certain banking policies are making it impossible for foreign investors to start a business here, according to investment consultants.

Despite all the recent encouragements for foreign investment from the government side, some investors are still finding it difficult in Bahrain because of nettlesome bank policies, it was claimed. According to businessmen and consultants, foreign investors are not able to create bank accounts in Bahrain because banks do not allow it. 

“Foreign investors need  a bank account in Bahrain in-order to proceed with the investment process. But banks refuse to give an account as they do not have a residence visa in Bahrain,” said Fahad H Gauri, a consultant for investors and Managing Director of Brackets Corporate Communications.

Explaining the case of an investor, Fahad H Gauri said,“Even after signing the MOU for his under-formation company in notary office, banks do not entertain him saying he should get visa and a CPR card in order to
open bank account. The investor is coming to Bahrain to invest, how should he get the visa first before opening the company?”

“From the government side all the procedures have been completed. The client received a commercial registration(CR) from the government but it is ‘active without license’ since the investment process has not been completed,” he said.

“In some cases we were even forced to give our clients our company visa so that they can proceed with the investment process. But this is not feasible, we may have 15 clients in a month and we cannot give visas from our side to all of them,” he added.

The consultant further said that Bahrain is a very attractive location for investors, but investors look elsewhere because of this hindrance. “In Dubai for example, all the procedures can be completed in three days. The banks over there does not have such policies,” he said.

“Whenever a larger investment is made they grant the bank account and everything goes smoothly. But when the investment are comparatively smaller, they ask for about the visa and do not grant the account. The banks are blocking the investment process by doing this and driving investors away,” he added.

According to him, the issue only started since the past few months. “This was not the case before, all investors were able to create bank account and were able to complete the investment process without any issues. But since the past few months, many investors are forced to look elsewhere for opportunities,” he said.

Sharing similar experiences, General Manager of Transform International Consultancy Shaiju Damodaran said, “We have had many cases where the investor comes to Bahrain and follows all the procedures but are not able to start the business because of the bank issue.” 

Sameer, an investor said that he visited almost all the banks in Bahrain and received the same response. “I have a company in Saudi Arabia and want to shift my business here. I am not able to proceed because of the bank issue. I hope that the authorities come up with a solution to this problem,” he said.