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Bahraini entrepreneurs could be paying reduced commercial registration (CR) fees in a plan MPs believe will encourage the opening of more small and medium-sized companies in the kingdom.
MPs unanimously approved amendments to the 2015 Commercial Registration Law that revises the annual registration fees for businesses and companies owned entirely by Bahrainis, offering financial relief and sparking greater interest in the sector.
The proposal, presented by MP Jalal Kadhim Al Mahfoodh, includes the following changes:
1. An annual registration fee of BD30 for sole proprietorship of a business establishment 100 per cent owned by a Bahraini citizen.
2. An annual registration fee of BD60 for a company 100pc owned in partnership by several Bahrainis.
3. An annual fee of BD10 per future commercial activity for businesses and companies owned entirely by Bahrainis, with an exemption for the first three activities.
4. Fees for foreign-owned businesses or companies with expatriate partners will be determined by the relevant minister after Cabinet approval.
Currently, opening or renewing a CR costs BD50 and for every three commercial activities BD100 is charged annually, regardless of who owns or operates the business or company.
The legislation will be now drafted into a proper law by the government and returned to the National Assembly for review within six months although MPs have been warned the move could face global trade repercussions.
Mr Al Mahfoodh said the changes aim to reduce administrative fees and encourage citizens to engage in self-employment by opening more small and medium enterprises.
“The current law is unfair with the opening of CR costing BD50, in addition to BD100 for the first three commercial activities regardless of the fact that the company may only be involved in a single operation!
“The renewal of the CR on an annual basis also leads to citizens incurring additional financial fees, which may lead to citizens refraining from the choice of self-employment, which should be instead encouraged as it alleviates the spectre of unemployment.”
Mr Al Mahfoodh explained that the amendment he submitted stipulates setting a fee of BD30 to open a CR for an establishment and BD60 for companies owned by Bahrainis, with the first three commercial activities being free, in addition to BD10 for adding each commercial activity after the third activity.
“Legislators have to take into account administrative fees for various activities, so that they are appropriate and reasonable for citizens,” he added.
“The Interior Ministry should be taken as a model to be emulated in the policy of administrative fees for government services, especially with regard to renewing identity cards and passports, the validity period of which extends between five and 10 years with a fixed amount set for renewal, which has helped reduce the financial burdens on citizens.”
The Industry and Commerce Ministry pointed out that the fee should reflect the cost of services provided – without any discrimination based on nationality or other criteria, in line with Bahrain’s constitution and its economic policies.
“Bahrain’s obligations under the World Trade Organisation (WTO) and Free Trade Agreements (FTAs) require adherence to non-discriminatory principles. The government carefully balances these obligations with the interests of local businesses,” it added.
The Bahrain Chamber stated that the current fee structure was determined after extensive studies and aligns with regional standards. It also recommended retaining the existing legal framework, as it provides flexibility for the minister to adjust fees based on the nature and size of the businesses.
Meanwhile, MPs unanimously approved amendments to the 1975 Civil Service Pension Law and the 1976 BDF and Security Personnel Pension Law, presented by financial and economic affairs committee vice-chairman Mohammed Al Marafi. The proposals stipulate that not more than BD150 can be deducted from monthly wages of Bahraini employees who opt for pension loans in advance.
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