BAHRAIN Law and Practice Contributed by: Rad El Treki, Noor Al Rayes, Aayush Kainya and Mohamed Al Sari, Al Tamimi & Co.
5.3 Triggers and Thresholds There is no minimum de minimis threshold for FDI/ national security screening; instead, the trigger is any event that modifies the ownership structure or com - mercial licence of a Bahraini entity involving a foreign (non-Bahraini) person or an entity owned by non-Bah - raini nationals. Under the Commercial Companies Law and the Sijilat electronic system protocols, a security review may be automatically triggered by any acquisition of shares (even a single share), the appointment of new direc - tors or the amendment of a commercial licence by a foreign investor. While the 10% threshold is a key regulatory marker for mandatory UBO disclosure, the MOI’s security clearance is required for the underlying corporate change to be legally effective, regardless of the percentage. 5.4 Mandatory v Voluntary Filings Please refer to the responses in the foregoing. 5.5 Procedure and Timelines Typical timelines for straightforward clearances range from a few days to two weeks, but complex cases involving critical infrastructure or UBOs from non-trea - ty jurisdictions may take longer. This process runs in parallel with merger control, but they are legally dis - tinct. 5.6 Substantive Criteria and Risk Factors Please refer to the responses in the foregoing. 5.7 Mitigation Measures, Conditions and Prohibitions The MOI and the CPA utilise a range of mitigation measures to balance foreign investment with national interests. Behavioural conditions are the most fre - quent, often requiring “information firewalls” to pre - vent foreign parent companies from accessing sen - sitive local data or local data storage mandates to ensure compliance with the Personal Data Protec - tion Law (PDPL). In strategic sectors like telecom - munications or energy, governance limitations may be imposed, such as requiring a certain percentage of the board to be Bahraini nationals or appointing a government-approved security officer to oversee sensitive operations.
required MOI security clearance has been obtained. This requirement applies irrespective of the size of the shareholding and forms an integral part of the regula - tory approval process. The primary policy objective is to safeguard public order and national security, particularly in strategic sectors like telecommunications, energy and the digi - tal economy, while also ensuring transparency regard - ing the UBO to prevent money laundering. This screening serves as a “gatekeeper” function that complements merger control, focusing not on market competition but on the suitability of the investor and the protection of the Kingdom’s critical infrastructure and sovereign interests. 5.2 Scope of Transactions and Investors The screening regime covers transactions in critical national infrastructure (CNI) sectors, including oil and gas, electricity, water, financial services and transport. Significant scrutiny is applied to acquisitions in the ICT and defence technology sectors (such as active protection and radar systems), where the state main - tains a keen interest in protecting national digital infra - structure and sovereign military capabilities. While 100% foreign ownership is permitted in over 95% of commercial activities, “strategic” sectors – namely oil exploration, media and defence – often require special ministerial approval or a minimum level of Bahraini or GCC direct ownership. Additionally, wherever a company is to be owned by a natural rather than legal person, that person will undergo a level of security screening. The screen - ing also extends to real estate transactions involving foreign nationals, which are restricted to designated zones and subject to security checks by the MOI to prevent sensitive land acquisition. While GCC and US investors (via the US-Bahrain Free Trade Agree - ment) receive preferential “national treatment”, the 2026 practice requires all foreign investors to disclose UBOs with more than 10% ownership, ensuring that capital from any country of origin aligns with Bahrain’s anti-money laundering and public order standards.
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