Amendment to Decision No. 40 of 2021 – Further Liberalisation of Foreign Ownership in Bahrain

Over the past several years, Bahrain has undertaken significant incremental reforms to open its economy to foreign investment. Decision No. 40 of 2021, Determining Commercial Activities Which Foreign Capital Companies May Be Licensed to Practise, consolidated and expanded upon numerous previous decisions dating back to 2016. These measures have progressively expanded the range of commercial activities open to foreign ownership and clarified the applicable ownership thresholds. This approach has strengthened Bahrain’s position as one of the Gulf region’s most accessible and investor-friendly jurisdictions.

Decision No. 40 of 2021 categorises all commercial activities in Bahrain according to the level of foreign ownership permitted, ranging from full foreign ownership, to partial restrictions, to activities requiring local or GCC participation, or subject to specific conditions.

Most recently, Decision No. 71 of 2025 amends Decision No. 40 of 2021, and introduces additional amendments to this framework, further liberalising foreign ownership requirements for certain existing activities and setting the ownership parameters for new ones. These changes form part of Bahrain’s broader, ongoing sustained effort to promote economic openness and enhance competitiveness.

Key Changes

The key changes of Decision No. 71 of 2025 include:

• One commercial activity has been added to the list of activities requiring that a minimum one (1) share be held by a GCC shareholder: Retail sales outside shops via vending machines and self-service sales (activity code 4799-1).
• Seven (7) commercial activities have been added to the list of activities that can be undertaken by entities owned up to one hundred percent (100%) by foreign nationals, provided certain conditions are met (i.e. capital of BH entity 100,000 BHD, revenues of parent company at least 750 million euros, presence in 10 markets):

1. Renting and leasing of recreational and sports goods (activity code 7721)
2. Passenger rail transport, interurban (activity code 4911)
3. Freight rail transport (activity code 4912)
4. Cutting of glass and mirrors (activity code 231052)
5. Ship Recycling Services (activity code 383003)
6. Renting and operational leasing of machinery and equipment (activity code 77301)
7. Renting and operational leasing of office machinery and equipment (activity code 77307)

• Five (5) commercial activities have been added to the of activities permitted for up to 100% foreign ownership:

1. Consultancy in the field of data monitoring and data protection (activity code 6203)
2. Electric Power Generation (activity code 351001)
3. Electric Power Transmission and Distribution (activity code 351002)
4. Service activities incidental to water transportation – Management and Operation of Ports and Private Jetties (activity code 52220-1)
5. Real estate activities on a fee or contract basis – brokerage in Real estate (activity code 682-2)

Next Steps and How We Can Assist

Al Tamimi & Company’s Bahrain Corporate Team is actively engaging with the Ministry of Industry and Commerce (MOIC) and is well positioned to support you in navigating these regulatory developments. We can assist in:

• Reviewing your commercial registration (CR) to assess the impact of Decision 71 of 2025.
• Verifying compliance with any applicable conditions.
• Restructuring your shareholding to take advantage of the expanded foreign ownership opportunities.

This amendment represents another step in Bahrain’s commitment to economic diversification and attracting foreign investment, particularly in infrastructure, logistics, and professional services sectors. Should you wish to discuss how these changes may benefit your business operations in Bahrain, please do not hesitate to contact us.