Top officials split over BD350,000 minimum capital for foreign companies

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

A proposal to impose a minimum capital requirement of BD350,000 for foreign companies who wish to open businesses here has put the parliament into a dissent with both the Industry, Commerce and Tourism Ministry and the Central Bank of Bahrain (CBB) objecting to it.

The Bahrain Chamber of Commerce and Industry (BCCI)’s Financial and Economic Affairs Committee put forward the proposal arguing that it would discourage investors without adequate capital from opening business here thus protecting the economy and investors.

The proposal also seeks to curb the power of the minister to exempt companies from the legally determined minimum capital.

However the ministry and CBB warned against approving the proposal saying that it “would negatively impact Bahrain’s investment climate.”

The proposal aims at amending Article 345 of the Commercial Companies Law promulgated by Decree-Law No. 21 of 2001.

“Laws are meant for attracting foreign investment, not restricting it,” said the ministry, also objecting to the intention to restrict the minister’s powers responsible for enhancing trade.

The CBB reviewed that the law would limit the legislative policy, thus reducing the volume of financial transactions of foreign companies in comparison with other financial institutions and Bahraini companies.

The top bank added that the proposal, if passed, would restrict investment in Bahrain as well as “cause confusion and disturbance to companies.”

Whereas the BCCI said the current law allow foreign investors to transfer capital outside Bahrain with the domestic market having no significant benefit.

“The law currently in force has caused negative effects on the national economy, and severe damages to small and medium enterprises owned by Bahrainis, as it promotes unfair competition.”