Book an appointment with us, or search the directory to find the right lawyer for you directly through the app.Find out more
We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
Rad El Treki - Partner, Head of Office - Bahrain - Corporate Structuring / Corporate / Mergers and Acquisitions / Capital Markets / Commercial / Corporate Services
Hussain Osman - Associate - Innovation & Patents
Photograph by Ali Al Shehabi
As the Kingdom of Bahrain continues its economic diversification away from hydrocarbon reliance, a stimulus boom in the form of state offered grants, subsidies and support schemes seek to foster innovation and entrepreneurship in the GCC’s thriving island Kingdom.
The following article sheds some light on the myriad of key initiatives implemented by the Government of Bahrain aimed to re-confirm Bahrain’s position as a key regional player in the start-up space.
Tamkeen is a public authority seeking to promote a digitised, sustainable, and globally competitive economy. It supports the growth of enterprises and enhances productivity and knowledge of the national labour force. Bahraini Jobseekers who meet the eligibility criteria can apply for programs tailored for individuals. These include Basic Skills training, Professional Certifications, A9eel- an initiative enhancing essential work ethics, and Tamkeen’s Youth Business Competition. Below are details of some Tamkeen programs for enterprises.
One of the programs offered by Tamkeen is financial support in training and wages. Employees may be trained by Tamkeen to improve necessary skills in their industry to maximize productivity. Alternatively, Tamkeen may increase the employee wages of fresh graduates for a period of 18 months. This would ‘pay out’ as 50% of such employees’ salaries for the first twelve months of employment, then 30% for six months (capped at BHD 500 respectively). To apply on behalf of their Bahraini employees, SME’s must have an active Commercial Registration (“CR”) issued in Bahrain and meet certain minimum wage criteria.
Secondly, Tamkeen offers a Business Development Program, covering up to 50% of expenses for approved services or items, based on the grant allocated to the enterprise. Support schemes offered in relation to this program range from ICT to accounting and auditing, amongst other things. Similarly to the above program, this requires SME’s to have an active CR issued in Bahrain.
The Mentorship Program forms part of Tamkeens advisory services to develop key professional skills and enhance the knowledge of Bahraini entrepreneurs. Mentee’s gain skills as planners and learners, to retain sharper focus on requirements for professional growth as well as learning new methods to acquire new skills. Beyond this, mentees are enabled to secure a mentor who can coach , providing honest feedback and helping to guide their growth.
Finally, Tamkeen’s Minimum Viable Product (“MVP”) Scheme allows start-ups to benefit from a grant towards development, design and testing of a first product. Entrepreneurs keen to avail of this initiative should ensure they are familiar with the criteria listed on Tamkeens website. By way of a key example, an SME must be adjudged to have high potential for scalability and growth amongst other factors.
EB is a key initiative on the Kingdom’s SME Development Board, offering national exporters updates on international market conditions and assisting them in identifying, locating and obtaining international trade opportunities based on EB’s performance indicators.
Two key solutions for the exporting industry are presented by EB in the form of Export financing and Export credit insurance. The former provides short term financing for SME’s to capitalise on international opportunities and global growth – Export financing will cover the exporters requirements and provide liquidity for any operational costs of the business activity up to an extent. EB may further support 50% of management fees and 50% of the guarantee capped at BHD 125,000.
The latter scheme introduces the first export credit solution in the Kingdom, protecting local exporters from numerous risks associated with dealing in international transactions. It reduces the financial responsibility on exporters providing them with conditional assurance that payment will take effect should the foreign buyer be unable to pay. Accordingly, the Arab Investment & Export Credit Guarantee Corporation “Dhaman” will reimburse 90% of the payment in case of default, incentivising locals to offer buyers more competitive credit terms on exports. EB will also subsidise 80% of the premium rate.
UNIDO ITPO established two projects to create job opportunities for youth; the Arab International Center for Entrepreneurship & Investment (“AICEI”) and Enterprise Development & Investment Promotion Program (“EDIP”).
The former’s mission entails seven objectives. To contribute to the economic empowerment of women and youth; encourage entrepreneurship through awareness and support programs for women and youth; asisst in developing eco-systems for MSME’s; local support organizations sharing best practices for value added services; business counseling and mentoring programs facilitating growth; developing linkages between financial bodies and entrepreneurship programs and establish business incubator systems helping MSME’s grow.
EDIP assists individuals to hone in on their strengths and entrepreneurial competence. This program is suited to those in the preliminary stage of establishing their own SME, enabling entrepreneurs to transform ideas into profitable businesses by supporting through capacity development, developing business plans, counselling, guidance, and teaching skills in the management of investment or commercial projects. Comprising of a series of teaching methods and exercises in Arabic and English EDIP serves as a strong foundation for any forward-thinker looking to establish their own SME.
Now available is the Virtual Innovation and Entrepreneurship Hub too; an online platform offering support to aspiring, new and established entrepreneurs alike. The Hub will help improve learning for both face to face and virtual training, increasing its reach to those who are unable to attend sessions in person. In doing so, EDIP can continue to foster innovation, boost rates of technology adaption in MENA and continue closing the digital gender divide.
Bahrain Fintech Bay (“BFB”) (a leading FinTech hub in the MENA region) has teamed up with the US State Department’s Middle East Partnership Initiative (“MEPI”) to launch ‘build for Bahrain’. This virtual acceleration programme aims to enable local start-ups to ideate and conceptualise innovative solutions to challenges in the health and business continuity sector(s) in an attempt to incorporate ‘durable’ business models operating through the cloud; thereby forfending such business form logistic interruptions in the wake of COVID-19.
In its inaugural cohort round, 20 tech-enabled businesses were shortlisted amongst a larger pool of applicants submitted by local start-ups and advanced into an incubation programme offering face time with industry experts and renown entrepreneurs from home and abroad whilst developing their minimum viable product (MVP). The finalists will have the opportunity to pitch at a demo day, where only three teams will receive funding to further develop their solutions.
A boon to female entrepreneurs was announced in 2020 in collaboration with Standard Chartered and the Supreme Council for Women. BFB has facilitated the organisation of a tailored program aimed at delivered the required know-how and skill-set to equip 10 shortlisted female-led businesses by taking part in an 8-week program, where they will have access to subject matter experts. Legible candidates must be female business proprietors (whether nationals or residents of Bahrain) above the legal age of 18 years old.
Following a rigorous pitch contest, 5 participants will be offered funding of USD $50,000 each in addition to complementary 3-month residency at Bahrain FinTech Bay. It is worth noting here that all applications, networking, training, and mentoring will take place over the cloud, in a move confirming the initiatives aims to encourage the embracing the benefits of burgeoning technological advances.
The Hope Fund was established pursuant to Decree No. 64 of 2020, with the stated aim of investing and supporting youth projects and initiatives in Bahrain.
As a fairly new fund, the law envisages the achievement of the following objectives:
It is clear that the Government of the Kingdom of Bahrain remain resolutely committed to fostering innovation and entrepreneurship within Bahrain and to seeking to offer every available advantage to start-ups establishing themselves in Bahrain. Such wide ranging initiatives are to be applauded and encouraged, and will enable Bahrain to further cement its position as one of the key start-up centers in the region.
For further information, please contact Rad El Treki.
To learn more about our services and get the latest legal insights from across the Middle East and North Africa region, click on the link below.