Although foreign companies are not required to have local partners, local businessmen with strong government contacts can sometimes influence government decision-making.  Bidding on local, public sector tenders does require holding a local commercial registration.  Interpretation and application of the law sometimes vary by ministry and may depend on the stature and connections of an investor’s local partner.

The “Bahrainization” of the labor force – a quota system requiring employers to employ a minimum percentage of Bahraini nationals – can sometimes lead to delays and confusion over work permit issuance and renewal.  In February 2019, Bahrain launched the National Employment Program which aims to give employment preference to Bahrainis while increasing the fees on foreigners’ work permits in the Kingdom.  The current edition of the plan covers 2021 to 2023.  The government is currently drafting the strategy for the proceeding four years.

Many of the largest infrastructure projects in Bahrain are funded by Bahrain’s wealthier GCC neighbors.  Although those projects are tendered via the Bahrain Tender Board, final award decisions are made by the country that funds the project, which may override the Tender Board’s recommendation and mandate the selection of a GCC registered company.

Since 2019, the dramatic reduction in electricity subsidies and reduced access to financing among local banks have significantly increased the cost of doing business among Bahrain’s small and medium sized enterprises.A number of recently-introduced laws and other changes to Bahrain’s business regulatory environment, including commercial registration requirements, quality standards, and import restrictions, have been reported by U.S. companies as representing a barrier to their export and in-country business operations.