BAHRAIN Law and Practice Contributed by: Rad El Treki, Noor Al Rayes, Aayush Kainya and Mohamed Al Sari, Al Tamimi & Co.
11.3 Cross-Border and Geopolitical Considerations
corporate income tax for large local companies will likely trigger a surge in pre-closing restructuring and price-adjustment disputes as parties look to mitigate the impact of new tax liabilities on deal valuations. 11.2 Practical Tips for Deal-Makers and Counsel Deal-makers in Bahrain should prioritise early and informal engagement with the CBB or the MOIC, as the “spirit of the law” and pre-notification consulta - tions are often as critical as formal filings for ensuring a smooth timeline. Practically, counsel should account for a 30-business-day statutory review period for new applications – though sector-specific approvals can extend this. From a litigation and documentation per - spective, it is vital to draft CPs with extreme specific - ity regarding the “satisfied” state to prevent “good faith” disputes in a jurisdiction that strictly upholds contractual stability. Additionally, all share transfer instruments should be prepared for local notarisation, and long-stop dates should realistically buffer for potential administrative delays in government-linked registrations.
When structuring cross-border transactions with a nexus to Bahrain, international investors must priori - tise multi-agency regulatory co-ordination, particu - larly between the MOIC, the CBB for financial assets and the TRA for digital infrastructure. While Bahrain permits 100% foreign ownership in most sectors, buyers should conduct deep-dive due diligence into UBO requirements and localised economic substance rules, as failure to comply can freeze commercial reg - istrations. From a geopolitical and sanctions perspective, while Bahrain is highly integrated with global markets via the US-Bahrain Free Trade Agreement, investors must rig - orously screen for nexus to sanctioned entities in the wider region to prevent “de-risking” by correspond - ent banks, which remains a primary hurdle for capital repatriation. Furthermore, the introduction of a 15% DMTT (effective 2025) for large multinationals, and the potential for a broader CIT, means that historical tax- neutral assumptions must be replaced with robust, forward-looking fiscal modelling.
25 CHAMBERS.COM
Powered by FlippingBook