BAHRAIN Law and Practice Contributed by: Rad El Treki, Noor Al Rayes, Aayush Kainya and Mohamed Al Sari, Al Tamimi & Co.
to eight weeks, provided all facility standards remain met. Overall, the process across these regulators involves submitting a detailed business plan, vetting “approved persons” (directors and senior manage - ment) and proving financial solvency, with the final approval being a mandatory prerequisite for the MOIC to finalise the company’s commercial registration. 6.3 Substantive Standards and Discretion The CBB utilises a fit and proper test for all controllers (ownership of 10% or more), assessing the integrity, solvency and professional competence of the acquirer to ensure the financial stability of the Kingdom’s bank - ing and insurance systems. In the telecommunications sector, the TRA evaluates whether a change of control could undermine the availability of services or com - promise national security and public interest, often requiring commitments to maintain investment in local infrastructure. For healthcare, the NHRA focuses on the technical capability of the new owner to uphold clinical safety and patient care standards. While Bahrain has liberalised many sectors to allow 100% foreign ownership (eg, manufacturing, ICT and healthcare), strategic industries like oil and gas, media and defence remain subject to strict ownership caps or require a minimum Bahraini partnership to pro - tect media plurality and sovereign resources. These assessments often include a review of the investor’s global reputation and the UBO to mitigate risks of money laundering or foreign interference. 6.4 Interaction With Merger Control and FDI/ National Security Reviews In practice, co-ordination of M&A approvals in Bahrain is managed through a “parallel-track” system where the Sijilat 3.0 electronic portal acts as the central hub for procedural synchronisation. While the CPA con - ducts the substantive economic review and the MOI handles national security screening, sector-specific regulators (like the CBB or TRA) operate under their own autonomous mandates; however, no transaction can be legally finalised in the Commercial Register maintained by the MOIC until all “electronic no objec - tions” are toggled to “approved” within Sijilat . This means that while the filings are distinct, they are func - tionally interdependent: a CPA clearance is often a condition precedent for a final sector-specific licence
amendment, and a “security defect” from the MOI will automatically freeze the entire application regardless of antitrust or prudential approvals. 6.5 Practical Issues and Common Pitfalls Please refer to the responses in the foregoing. 7. Deal Structuring, Risk Allocation and Conduct Pending Closing 7.1 Conditions Precedent and Long-Stop Dates Consistent with the approach taken in most sophis - ticated jurisdictions, conditions precedent (CPs) are typically bifurcated into mandatory regulatory clear - ances and deal-specific commercial protections. Regulatory CPs almost always include, for example, the receipt of no-objection certificates from the CPA, the MOI for security screening, and sector-specific regulators like the CBB or the TRA. Litigation-related outcomes are frequently included as CPs to pro - tect the buyer from “successor liability”; these often mandate the final settlement or dismissal of specific material lawsuits disclosed during due diligence, or the absence of any new injunctions that would restrain the transaction. Long-stop dates (the “outside date” by which CPs must be satisfied) are negotiated by balancing the statutory review periods – such as the CPA’s 90-day window” – with a buffer for administra - tive delays in the Sijilat system. 7.2 Efforts Standards and “Hell or High Water” Clauses The level of effort required to obtain regulatory approv - als is a highly negotiated contractual point, with the standard typically scaling based on the perceived “deal risk”. For most transactions, “reasonable best efforts” or “commercially reasonable efforts” is gen - erally the market norm, requiring the parties to take diligent steps to fulfil filing requirements without being forced to accept remedies that would fundamentally alter the deal’s commercial value. However, in “high-stakes” deals or those involving critical infrastructure, sellers often demand a “Hell or High Water” (HOHW) standard. Under a HOHW clause in the Bahraini context, the buyer commits to taking
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