Introduction
The Kingdom of Bahrain is adjusting its position in the global market as a commitment to meet international standards for modernization. Bahrain also regulates its rules for consolidating and simplifying its legislative regime. Also, it reflects market changes and responds to feedback from investors and other stakeholders.
The legislation governing business firms in Bahrain has recently given several significant amendments. Let's get into more depth about the new amendments here.
Considerations of Share Capital with Joint Stock Companies
Experts or auditing firms can value in-kind assets due to an amendment in the Commercial Companies Law. It allows for the possibility of the valuation for in-kind assets. After then, the value would need authorization from the MOICT. In the past, the evaluation would have been out by committee created by MOICT.
In the past, the Commercial Companies Law allowed joint stock companies to issue shares to their shareholders with specific privileged rights. These rights include voting rights, company's revenues, and distribution of rights. Bahrain allows for the issue of preference shares which have the rights and privileges about voting or earnings. Along with other rights and freedoms, the Amendment in the Commercial Companies Law takes such principles one step more. It is crystal clear under the law that the Joint Stock Company is to issue several preference shares. So long as all the shares within a particular type have the same rights set.
Single Person Companies merged with Limited Liability Companies
The Single Person Companies corporate form eliminates due to an amendment in the Commercial Companies Law. With Limited Liability, Companies have assumed their functions. It is one of the more significant changes brought in the new Amendment.
The abolition of greatest number of shareholders is one of the relevant amendments that will be there in the provisions of the legislation regulating WLLs.
Also, there is no longer need for a least amount of capital for WLLs. Instead, in a broader sense, a firm needs to have capital that is enough for it to do the goals that it has set for itself.
No Restrictions on Foreign Ownership for Retail Sale Online
The Ministry of Industry and Information Technology reduced the restrictions on foreign ownership. It is in comparison to the restrictions on foreign ownership that had been in place before. These restrictions applied to the wide variety in industries and activities. They also prohibit commercial activities from taking out by entities owned a100% by the foreign individuals.
E-commerce operations are now there to provide 100% foreign ownership. Also, by the MOICT Decision 6 of 2021, it is if specific least capital criteria are there.
It confirms the continued commitment of the government of Bahrain to open up for foreign investment. Though, with a particular focus on expanding e-commerce sector in Bahrain.
Procedural time is now less in the Commercial Companies Law
According to Article 3 in the New Law, references up to 60 days in Commercial Companies Law are now to be 15 working days. As a result, it is now possible to fall of the processes in one-fourth of time that was before necessary for line in the Commercial Companies Law. Such process that comes to mind is the transformation of businesses, for instance. Thus, the period that must pass after the publication of the resolution for the conversion of the company in Official Gazette and the daily newspaper for the conversion to be now shortened. It is from the previous need of sixty days to the current need of only fifteen working days.
This development might be an acknowledgement on the part of the government that the contemporary business world necessitates activities to take place at a rapid speed. But, the pace is also reliant on the effectiveness of systems maintained by the Ministry of Industry and Commerce. These systems is recently upgrade to an online system. It now requires ongoing maintenance and close oversight.
More Authority
Article 21(bis) is now in the Commercial Corporations Law by the New Law. This article gives the minister of industry and commerce the authority to adopt resolutions that set the least capital requirements in certain companies. Also, a change is there to Article 65 in the Commercial Companies Law to enable the incorporation with the joint stock companies with the foreign capital and expertise. At the same time, the minister of industry and commerce got the authority to impose restrictions on foreign ownership in specific business sectors when engaging in certain activities.
Also, until recently, the trade of stocks and shares represents foreign capital in the public joint-stock company prohibited as per the Article 65 of the Commercial Companies Law. This rule was in place until three years after the firm's creation. But this limitation will no longer exist due to the New Law's Amendment to Article 65. It will boost the level of foreign investment in Bahrain and bolster Bahrain's standing as an open and competitive economy in the region.
Changes in the Labour Law
About the stipulation and control of fundamental health care for employees of institutions, Ministerial Order No. 29 of 2014 issued in 2014. In the past, the stance was that the need to provide workers with at least some basic health care. It only pertained to companies with more than 50 employees.
Such an order extends to the obligation for all employers. In Regardless of institution's size, it gives organizations with more than 50 employees a choice between obtaining private health care by a health insurance company licensed in Bahrain. Instead, they are establishing their medical unit that the National Health Regulatory Authority.
New Ministerial Orders
The Ministry of Labor also issued more ministerial orders that are important to take note of. Such as, Ministerial Order No. 27 of 2013 specifies the type of work along with circumstances requiring continuous work hours without the period of rest. These include jobs that operate on the shift basis and jobs related to the security, sanitation, or health.
Final Words The adjustments are being made to bring the legislation in line with worldwide "best practices. Also, this may compel Bahrain businesses to change their existing organizational structures. The recent changes that have been there to the CCL bring attention to Bahrain's effort to welcome foreign companies. Also, to make it simpler for them to integrate into the economic sector. E-commerce activities have added to the activities that permit 100% foreign ownership. It confirms the continued commitment of the government of Bahrain to open up in Bahrain for the foreign investment. Such amendments focus on the expanding e-commerce sector in Bahrain and the region.