Bahrain Market Entry

Bahrain Market Entry

Basic conditions for the use of Czech goods on the market

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

The Investment Center is a one-stop shop for setting up a company in Bahrain. More information on forms, registration options and licensing requirements for new companies can be found on the website of the Ministry of Industry, Trade and Tourism.. A carefully selected local partner can help you with advertising, promotion and pricing. Personal relationships can increase your company’s business prospects. Maintaining business relationships with regular communication and personal contact is also important.

According to cheeroutdoor.com, Bahrain is considered one of the most open economies in the Middle East and North Africa (MENA) region. With several free trade agreements, excellent infrastructure and strong financial institutions, Bahrain is also a good location for subsequent expansion into other regional and international markets. Bahrain allows 100% foreign ownership of a company or branch, with no restrictions on repatriation of capital, profits or dividends. The Heritage Foundation ranked Bahrain as the 40th freest economy (Index of Economic Freedom 2021). Bahrain is ranked 43 out of 190 countries in the World Bank’s “Doing Business 2020” index.

Although foreign companies are not required to have local partners, local businessmen with strong government connections can sometimes influence government decisions. The interpretation and application of the law sometimes varies by ministry and may depend on the position and ties of the investor’s local partner. The “Bahrainiisation” of the workforce – a quota system that requires a minimum percentage of Bahraini nationals – can sometimes lead to delays and confusion regarding the issuance and renewal of work permits. Many of Bahrain’s largest infrastructure projects are financed by Bahrain’s wealthier GCC neighbors through the so-called GCC Stabilization Fund. Although these projects are tendered in Bahrain, final decisions are made by the country that finances the project. Electricity prices have been rising since 2019.

Bahrain applies a Common Customs Tariff (CET) of 5% to almost all imported goods (except goods manufactured in the GCC region and FTA countries), paper and aluminum are subject to a 20% duty when imported into Bahrain, alcohol 125% and tobacco products 100% customs. A No Objection Certificate from the relevant authority is required for a number of imported items. This applies to, for example, animals, fertilizers, insecticides and fungicides, meat products, fish and seafood, fruits and vegetables, plants, radioactive substances, food, drugs, ethyl alcohol, isopropanol, four-wheeled mini cars, iron and steel shackles, weapons, ammunition, explosives and military equipment, magazines, printed publications, films, video, optical and magnetic audio-visual media, goods infringing intellectual property rights, telecommunications, radio and television reception and transmission equipment.

Importers or their local agents must complete a customs declaration using the eCAS customs clearance system ( https://www.bahraincustoms.gov.bh/en/commercial-import ) before importing goods into Bahrain. Importers should consider using a registered and licensed clearing agent to ensure import procedures are completed quickly. After filling out the declaration in eCAS, the duty is paid, the following import documents are presented to the officer at the customs point:

  • Declaration form
  • Documentation from the carrier for the importer (with valid business registration)
  • Three copies of invoices from the exporter addressed to the importer
  • Two copies of the packing list (with data on weight, packaging and classification of goods for each individual item in the shipment)
  • Original certificate of origin from the chamber of commerce of the country of origin
  • A copy of the insurance policy
  • Bill of Lading (B/L, Bill of Lading)
  • Import permit of the competent authority for the import of controlled goods
  • Bank guarantee (if any)
  • Statistical declaration if the final destination of the goods is in the GCC countries.

Then the relevant cargo handling fees are paid and cargo transfer is arranged at the port operator’s counter. The port operator will move the container to the appropriate inspection point, the customs authorities will inspect the goods (at their discretion). The goods will be cleared and allowed to leave the customs office. Regarding food, Bahrain customs regulations require importers to present a manufacturer’s certificate that the goods are free of cyclamates. All products of Arab origin that are imported under the Convention on Trade Facilitation and Exchange between Arab countries are reciprocally exempt from customs duties on presentation of a recognized certificate of origin.

Forms and conditions of operation on the market

The Investment Center is a one-stop shop for setting up a company in Bahrain. For more information on forms, registration options and licensing requirements for new companies, visit the Ministry of Industry, Trade and Tourism page.

A carefully selected local partner can help you with advertising, promotion and pricing. Personal relationships can increase your company’s business prospects. Although foreign companies are not required to have local partners, local businessmen with strong government connections can sometimes influence government decisions. The interpretation and application of the law sometimes varies by ministry and may depend on the position and ties of the investor’s local partner. The law governing the relationship between a Bahraini commercial agent and a foreign agent is the Commercial Agencies Act promulgated by Legislative Decree No. 10 of 1992 and its implementing regulations, i.e. Ministerial Regulation No. 2 of 1993. This regulation was amended by Legislative Decree No. 8 of of 1998 and Legislative Order No. 49 of 2002 (ie the “Agencies Act”).

The possibility of establishing a joint venture, e.g. “sro”, is also considered. The joint venture agreement must specify the rights and obligations of the parties and determine the distribution of profits and losses. The relations of the parties are governed by the founding documents, but they must not conflict with the laws of Bahrain. Any local partner must be checked in advance, including, for example, checking the company’s ID number through the local equivalent of the commercial register.

Marketing and communication

Bahrain ranks fourth globally in the number of internet users with a penetration rate of 99.7% and easy access to social media and online platforms. It is thus possible and usual to use the services of well-known influencers. However, traditional advertising methods remain in use in Bahrain, such as print advertisements in local newspapers and magazines, fairs and exhibitions, display banners and billboards.

Advertising is also possible on Bahraini television and radio. Many businesses distribute flyers in residential areas. It is also possible to advertise via text messages on mobile networks. Major mobile phone service providers include Batelco, STC and Zain.

Bahrain regularly hosts trade fairs that provide good marketing opportunities for importers and distributors. Advertising in Bahrain is not allowed: nudity and pornography, political and religious content, or anything that might conflict with the views or interests of the royal family.

Issues of intellectual property protection

Bahrain has been a member of the WTO since 1995. The Bahraini government has signed the Berne Convention (Protection of Literary and Artistic Works), the Paris Convention for the Protection of Industrial Property, ratified the revised WTO / TRIPS legislation. The country is a member of WIPO (World Intellectual Property Organization), having joined its “Copyright Treaty” and “Performances and Phonograms Treaty”.

Intellectual property rights in Bahrain are protected by the following national laws:

  • Trade Marks Act No. 11 of 2006
  • Patents and Utility Designs Act No. 1 of 2004, as amended by Act 14 of 2006
  • Designs Act No. 6 of 2006
  • Integrated Circuit Design Act No. 5 of 2006
  • Copyright and Other Rights Act No. 22 of 2006
  • Trade Secrets Act No. 7 of 2003, as amended by Act No. 35 of 2005

In order to protect intellectual property, the relevant Bahraini institutions conduct inspections, close down establishments and improve public awareness.

Every business should have an overall strategy for protecting intellectual property rights. Your rights must be registered and enforced in Bahrain in accordance with local law. There is no such thing as “international copyright” to protect its owners worldwide. Therefore, companies should consider how to obtain a patent and trademark before introducing products. Intellectual property is primarily a private right and the Czech Republic cannot enforce rights on behalf of private individuals in Bahrain. Rights holders themselves are responsible for registering and protecting their rights. Companies can use local lawyers or consultants in the field of intellectual property. There are no specialized intellectual property courts in Bahrain. Holders of intellectual property rights can file a motion in court to stop or prevent infringement of their rights. The penalty is a fine or imprisonment,

Registration of all the above-mentioned intellectual property protection instruments can be done directly through the web services of the Ministry of Industry, Trade and Tourism of Bahrain.

Public procurement market

Bahrain has a Public Procurement Law of 2002. All major projects and government acquisitions above BHD 10,000 ($26,667) are published on the BTB website respectively ” https://etendering.tenderboard.gov.bh/Tenders/publicDash “, registration required. The regulations are published in English and Arabic. Contracts are generally, but not necessarily, awarded to the lowest bidder. A local representative can provide valuable advice on price, timing and key contacts. A special category is contracts in the interest of the national security of Bahrain, where it seems impossible to do without a local representative. Bahrain is not a signatory to the OECD Anti-Bribery Convention.

In the case of public tenders, an automatic tender advertisement is published on the BTB website, and in the case of closed tenders, automatic e-mail invitations are sent to selected suppliers. Registered suppliers can purchase and download procurement documents electronically. Bidders then submit their bids at the specified time from Sunday to Wednesday. bids received after the closing date will not be accepted. Bids are opened in the presence of BTB members or the given commission. Once the offer is open, the prices will be displayed online on the BTB website. Offers are accepted if they meet the requirements of the tender documentation and contain all the required documents and annexes. The reason for rejecting the offer is

  • non-purchase of procurement documentation, or different buyer name
  • form No. (TB 02) is not attached
  • the original initial bond is not attached
  • the initial bond is not in the correct form according to BTB decision No. (3) of 2004 and tender documentation
  • the initial bond contains incorrect information or does not meet the requirements

All valid bids are then submitted to a purchasing authority or other committee, which makes a recommendation. The final decision will be made by BTB members or the original commission designated for this purpose. The result is published in the official gazette.

Projects funded by the GCC Development Plan may be subject to the rules of the GCC country funding the project. In addition to several key oil and gas projects, the Bahraini government offers a number of business opportunities, particularly in real estate and housing, energy and renewables, transportation and public works, and manufacturing.

Bahraini offshore banks have extensive experience in providing syndicated loans for larger projects, including major infrastructure investments. The Development Bank of Bahrain (BDB) supports industrial development in Bahrain. BDB also lends funds to local projects it considers to be a priority. BDB funds are allocated under market conditions and are available to foreign investors. Loan terms are variable, but usually limited to ten years with a maximum grace period of two years.

Payment terms, payment ethics and resolution of commercial disputes

The most common payment methods for importing goods to Bahrain from the US (ie, according to a recent survey) are reportedly open account (55%) and letter of credit (32%). However, it is necessary to proceed very carefully, check the partner well, use legal services and ensure against mistakes. It is therefore always best to pay in advance or a letter of credit.

Due to the different legal system in the country and the cost of court and arbitration processes, it is recommended to settle any disputes by agreement of the parties. If this is not possible (there is no will), it is necessary to resolve the dispute using a court or arbitration. If the parties choose to resolve the dispute through a Bahraini court, the case will be resolved under local commercial and civil law, which is based on British law and incorporates elements of Egyptian law. Local companies are used to including an arbitration clause with jurisdiction over international arbitration in contracts. In addition to international arbitration, disputes can also be resolved through local arbitrations, which, in the case of an international dispute, apply UNCITRAL international arbitration law. e.g. Bahrain Chamber for Dispute Resolution (BCDR), or GCC Commercial Arbitration Center..

Bahrain is a member of the International Center for Settlement of Investment Disputes, which resolves disputes between an investor and a state or between states. The Czech Republic has signed an Agreement on the Promotion and Protection of Investments with Bahrain, the arbitration clause of which deals with possible disputes between the two states, or between private entities of one state and the state of the other party. However, it does not resolve disputes between investors. The dispute can be resolved using a Czech court or Czech or foreign arbitration.

Visas, fees, specific conditions for traveling to the territory

Visas are issued by the Embassy of Bahrain or passport control at Bahraini border crossings. There are several types of entry visas. Details about Bahraini visas can be found on the website of the Ministry of Foreign Affairs of the Czech Republic. In order to enter and stay in the territory of a foreign country, citizens of the Czech Republic must meet the conditions set by its laws. The embassy of the given country is responsible for communicating the current conditions of entry and stay in the territory of a foreign country. Citizens of the Czech Republic can process most visas online on the evisa portal. A fee of BHD 25 has been set for the business visa, which can be paid by card.

Bahrain does not have an embassy in the Czech Republic. In the matter of visas and any other information, it is necessary to contact the nearest embassy of Bahrain, namely in Germany at Klingelhöfer Strasse 7, D-10785 Berlin, Bundesrepublik Deutschland, tel.: 0049 30 86877777, fax: 0049 30 86877788.

In Bahrain, it is possible to rent a car right at the airport, there is a public transport network, hotel accommodation is commonly available, and it is possible to pay by credit card. From late autumn to spring, the climate in Bahrain is mild with occasional showers and gales. In summer, there is sultry heat without precipitation, but with very high air humidity. The risk of infectious diseases and crime are low.

To travel around Bahrain, it is possible to choose either bus transport, taxi, or one of the shared services such as Uber / Careem.

British-style electrical outlets are common in Bahrain. Many hotels have universal sockets.

Employment of citizens from the Czech Republic

There is quite a lot of interest in the employment of citizens from the Czech Republic in Bahrain, especially in the healthcare sector, but the possibilities are limited by the number of relevant capacities. A good command of English is a necessary condition for working in the Kingdom of Bahrain.

The basic condition of employment in Bahrain is the patronage of an employer, the so-called sponsor. Employment contracts are usually one to two years, with a further one-year extension usually offered if the employer is satisfied. The employer is obliged to provide health insurance for the employee. The vacation period is usually between 40 and 49 days, including weekends (Fri, Sat) and holidays (Eid). It is usual for the sponsor to provide the employee with accommodation (including energy consumption costs) and transport to the workplace. If the sponsor is unable to provide their own accommodation, they provide the employee with a lump sum for accommodation. In the case of middle and higher management functions, the sponsor usually also gives a one-time contribution for the purchase of a car.

As a rule, the sponsor does not check whether the employee used any contribution provided by him in full or only in part. The sponsor also provides the employee with at least one return ticket per year for the trip home (in some cases also a financial sum, the direct use of which it does not control). The sponsor will provide the employee with a long-term work visa and a local identity card. More details on employment of foreigners on the portal of the Bahraini State Administration.

Local health care is of a high standard. Many foreign personnel are employed, hospitals are equipped with modern technology. In principle, care for foreigners is paid care and the costs must be reimbursed by your health insurance company. In general, there are no cooperation agreements between health insurance companies. For a short-term stay in Bahrain, it is advisable to take out travel health insurance.

Fairs and events

Trade fairs in Bahrain are more of a regional importance, for more important events people go to the KSA and the UAE. Most Bahrain trade fairs are held at the “Bahrain International Exhibition Convention Center (BIECC)” in the capital, Manama.

Major events include (at BIECC, unless otherwise noted):

  • MEOS – Middle East Oil Show Conference, every two years fortnight in March
  • AUTUMN FAIR BAHRAIN Bahrain, an annual consumer goods fair for nine days in May
  • MIDDLE EAST PROCESS ENGINEERING CONFERENCE (MEPEC) trade fair with conference every two years in October
  • GEO geological technology fair with conference every two years usually 4 days in April
  • JEWELERY ARABIA annual fair five days in November
  • TRANS MIDDLE EAST annual exhibition of ports and logistics services three days in January (at a selected hotel)
  • MERTC Annual Petrochemical Industry Show in February (at selected hotel)
  • BAHRAIN INTERNATIONAL GARDEN SHOW annual fair in March

Calendar of events at BIECC

 

Practical telephone numbers (emergency services, police, firemen, information lines, etc.)

international area code of Bahrain from the Czech Republic – 00973

  • police – 999
  • traffic accidents – 688888
  • coast guard – 700000
  • information on local telephone numbers – 181
  • information on international telephone numbers – 191
  • international phone calls – 151
  • electricity failures – 241111
  • water supply failures – 727500
  • information about air connections – 325555
  • weather information – 268700
  • general information – 881111

Important web links and contacts

Websites and contacts for all ministries, the government, the president, local chambers of commerce and further for consideration by country (e.g. major media, central bank, economic analysis, tax administration…)

Statistical overviews

  • https://www.cbb.gov.bh/ – Central Bank of Bahrain
  • www.mofne.gov.bh – Bahrain Ministry of Finance
  • www.bahrain.bh – Bahrain State Administration

Important addresses

  • www.bahrainedb.com – Bahrain Investment Promotion Agency (Economic Development Board / EDB)
  • www.bahrainchamber.bh – Bahrain Chamber of Commerce & Industry (BCCI)
  • www.btea.bh – Tourism and Exhibitions Office
  • www.customs.gov.bh – Bahrain Customs
  • https://www.bahrainbourse.com / – Bahrain Stock Exchange / BSE
  • https://www.npra.gov.bh/en/ – Ministry of Home Affairs Department of Visas, Travel Documents and Immigration (NPRA)

The most important Internet sources of information

  • www.customs.gov.bh – Bahrain Customs
  • www.bahrainembassy.org – Embassy of Bahrain in the US
  • www.bna.bh/en/ – Bahrain News Agency

Different

  • www.gcc-sg.org – Organization of the Arab States of the Persian Gulf
  • www.isdb.org – development bank of Islamic countries
  • www.meed.com – economic weekly for the Middle East
  • www.mzv.cz/riyadh – Embassy of the Czech Republic in Riyadh (accredited for Bahrain)

Bahrain Market Entry