Bahrain introduced a new bankruptcy law, among other legislative reforms intended to encourage greater inward investment and is a significant boost for the economy. It stimulates the growing community of small businesses in the kingdom.
This law will bolster Bahrain’s “drive for diversification, and in particular, nurturing the start-up and SME market and increasing its footprint in the fintech space,” said Rad El Treki, head of corporate structuring, Bahrain, at law firm Al Tamimi & Company.
Bahrain’s bankruptcy law provides companies in financial difficulty with an opportunity to restructure under court supervision, Bahrain Economic Development Board, the country’s inward investment agency, said in a statement.
One of the intended outcomes of Bahrain’s bankruptcy law is the promotion of good governance and investor confidence, said Buthaina Amin, director of legal affairs at Bahrain EDB.
Bahrain has seen its foreign investment levels increase dramatically over the last year and wants to continue ramping up inward investment by refreshing corporate legislation and strengthening its business environment.
Bahrain EDB reported a record $810 million of foreign direct investment during the first nine months of the year, compared to $733m in the whole of 2017. However, the smallest economy in the GCC remains fiscally weak after it was hit hard by the slowdown in the regional economy since 2014 and external borrowings soared.
Bahrain signed this week a financial support package from its neighbours the UAE, Saudi Arabia and Kuwait, which is expected to ensure the fiscal stability of the country’s financial institutions. In 2011, the GCC agreed a $20 billion aid package for Bahrain and Oman to support their economies over a 10-year period following the global financial crisis.
The country’s new bankruptcy law was part of a package of legal reforms announced on Wednesday intended to strengthen the regulatory climate for current and prospective investors in Bahrain and shore up the economy as a result.
Bahrain is introducing a personal data protection law intended to govern the processing of data for commercial use, a competition law to prevent the formation of monopolies, and new health insurance legislation.
Source Credit: The National