Parliamentarians to vote on key investment, tax treaties

TDT | Manama

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Bahrain’s Parliament will vote next Tuesday on two significant agreements aimed at bolstering international trade and investment.

The first is an investment deal with South Korea, following a surge in non-oil trade between the two countries, which reached BD172.5 million in 2024—almost triple the figures from 2022 and 2023. Bahrain exported BD100.7 million worth of goods to South Korea in 2024 and imported BD71.8 million in return. In the previous two years, trade volumes had remained around BD60 million. The treaty, signed in December 2024, establishes key provisions for investor protection, including property rights, money transfers, and dispute resolution, along with compensation for losses caused by war, unrest, or expropriation. Disputes are to be resolved through negotiations, courts, or international arbitration.

The Ministry of Finance supports the agreement, emphasizing its potential to attract foreign investment without placing additional strain on public finances. This is one of 40 such treaties Bahrain has signed globally, aimed at enhancing capital inflows.

The second treaty, targeting the removal of double taxation, covers approximately $400 million in Omani investment. Signed in January 2025, it outlines how income from employment, dividends, royalties, and pensions will be taxed, and includes provisions for resolving disputes and sharing information.

The Ministry of Finance views this treaty as essential for fostering clearer tax rules and further boosting cross-border business. In 2024, Omani investment in Bahrain was valued at $398 million, with non-oil exports to Oman reaching $350.9 million.

Both agreements have received backing from the Financial and Economic Affairs Committee, with support from the Bahrain Chamber of Commerce and Industry. The Legislative and Legal Affairs Committee has confirmed that both treaties comply with Bahrain’s constitution.

If ratified, the agreements are expected to strengthen Bahrain’s economic ties with South Korea and Oman, and attract further foreign investment.