The final Law Update of 2022 is here, and it’s packed full of articles. The double edition features two focus areas, first is a spotlight on Energy and Resources and second we feature a collection of articles on Transport and Logistics. The developments occurring in these sectors in the MENA region are unprecedented and our lawyers cover vast themes for you.
The Energy and Resources focus features topics such as diversifying energy resources, solar PV, mining in the Middle East, renewable energy and green hydrogen. From a transport perspective, we draw attention to the Bahrain metro project, discuss the challenges and remedies associated with the repossession of an aircraft, and there is advice on what to consider should a party vary the terms of a shipping contract.
This edition navigates you through updates from across jurisdictions such as, Oman, Jordan, Saudi Arabia, Egypt, Iraq, Qatar, and the UAE. Each article is timely and provides insights into legal issues and cases that are affecting these sectors across the region.Read the full edition
This news update follows Al Tamimi’s previous articles confirming the issuance by the Ministry of Industry, Commerce and Tourism (“MOICT”) of Resolution No. (106) of 2018 regarding the requirements of validating the actual economic substance of entities’ activities in the Kingdom of Bahrain (“Resolution”), and the publication of the detailed guidance notes with the aim of serving as a preliminary guide to relevant entities on the scope and application of the Rules (the “Guidance Notes”).
Al Tamimi’s previous articles can be located at the following links:
The Bahrain ESR Regime places certain obligations on various types of entities incorporated or registered in Bahrain, requiring that such entities have an actual economic presence in Bahrain. The Rules currently only applies to companies that undertake certain distribution activities, service centres, activities of head offices, activities of holding companies, shipping activities, intellectual property activities, and leasing activities (“Relevant Entities”). Such obligations include the imposition of requirements with respect to the holding of management/shareholder meetings; the taking of strategic decisions; record keeping; number of employees; outsourcing; and the seeking of the MOICT approval for certain designated actions
All Relevant Entities are required to file an annual return (“ESR Annual Return”) with the MOICT within three (3) months of a Relevant Entity’s financial year end. The form of the return has also been published by the MOICT.
This meant that for Relevant Entities with a financial year that ended as of 31 December 2019, the ESR Annual Return should have been submitted to the MOICT by 31 March 2020.
In light of the spread of COVID-19, and as a means to providing more flexibility to the Relevant Entities, the MOICT however extended the deadline for Relevant Entities to submit the ESR Annual Return to 30 June 2020.
Failure to adhere to the requirements of the ESR (including failure to submit the completed ESR Annual Return to the MOICT by the deadline) may result in a variety of sanctions being imposed by the MOICT.
These potentially include:
It is important for your Bahrain based businesses to:
As the largest law firm in the Middle East and with strong corporate structuring experience across all industry sectors in the region, Al Tamimi & Company is well placed to assess the impact of the recently introduced Resolution on your organisation and assist you in complying with the Resolution.
We are currently offering clients a fixed fee arrangement with respect to advising on what the ESR mean for your business; carrying out a ‘health-check’ on your existing level of economic substance in Bahrain; and (if required) assistance in completing and submitting the ESR Annual Return to the MOICT.
If you would like to further discuss the contents of this update, please contact Al Tamimi & Company in Bahrain.
Trainee Lawyer, Corporate Structuring