The House of Representatives’s Financial and Economic Affairs Committee recommended approval of a proposal for a representative law aimed at amending Article 345 of the Commercial Companies Law promulgated by Decree Law No. 21 of 2001, whereby the amendment stipulated a minimum required capital in order to allow the license to establish companies for non-Bahrainis when Exercising activities limited to Bahrainis, which was estimated at 350 thousand Bahraini dinars.
It also canceled the authority of the minister concerned with trade affairs to exempt companies with foreign capital from the legally determined minimum capital.
The law aims - according to what was stated in its explanatory memorandum - to address the negative effects that resulted from opening the way for the foreign investor with little capital, and to preserve the national economy and the strength of the Bahraini investor.
Both the Ministry of Commerce and the Central Bank of Bahrain warned against adopting the law, and considered that it would negatively affect investment in Bahrain, while the Bahrain Chamber of Commerce and Industry expressed its support for the representative law.
The Ministry of Industry and Trade said that it does not agree with the law because it exaggerates in limiting foreign investment, and saw the need for the laws to be attractive to foreign investment, and considered that the law includes a restriction of the powers of the minister responsible for trade.
The Central Bank of Bahrain considered that the representative law limits the legislative policy followed in this regard, and reduces the volume of financial transactions of foreign companies with other financial institutions and Bahraini companies, in addition to restricting investment fields in the Kingdom of Bahrain, warning that its approval will cause confusion and disturbance to companies The same foreign capital as a result of the large number of legislative amendments.
As for the Bahrain Chamber of Commerce and Industry, it expressed its approval of the law, and saw that the law currently in force has caused negative effects on the national economy, and serious damage to small and medium enterprises owned by Bahrainis, due to unfair competition with the foreign investor.