The Bahraini Advisory Council recently approved an amendment to the companies law, which aims to encourage foreign capital investments as well as to further develop the Bahraini monetary market.
In accordance with this new amendment, the nationality requirement for ownership of Bahraini Public shareholding companies was dropped with regard to nationals of the Gulf Cooperation Council (GCC). Therefore, GCC nationals are allowed to acquire total ownership of a public shareholding company in Bahrain. Critics of this amendment based their objection on the lack of similar legislation in GCC countries, and called for reciprocity in this respect.
It is worth noting that a resolution issued by the Higher Council of GCC states permitted GCC nationals to own up to 25% of public shareholding companies- except for insurance companies- in Gulf countries. Bahrain, however, preferred to delimit the percentage of ownership by GCC nationals in its effort to gradually liberize market policies.
The amendment also gave the Minister of Commerce authority to license public shareholding companies with foriegn capital of more than 49%. In the latter case, however, and for purposes of national economy security it shall not be permitted to dispose of any shares prior to three years from the date of commence of business activity.