BAHRAIN Law and Practice Contributed by: David Walker, Simone Del Nevo, Sherif Saadeldin and Rahul Sud, ASAR – Al Ruwayeh & Partners
does not apply until ten workers are employed). If there are more than six employees, the ratio of foreign to Bahraini employee differs from one industry sector to another. Nevertheless, Bahrain has instituted a system permitting the issuance of work permits outside of the Bahrainisation ratio requirement through the payment of an There is no current knowledge of any express national security review of acquisitions in Bah - rain. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments As a civil law jurisdiction, there are no definitive significant court decisions in Bahrain; it does not have a precedent system and court decisions are made on a case-by-case basis, depending on the circumstances. increased annual work permit fee. 2.6 National Security Review 3.2 Significant Changes to Takeover Law In October 2023, the CBB revised the rules regarding M&A of publicly traded companies. These revisions focus on ensuring transparency and fairness through independent evaluations. An independent adviser must assess the fair - ness of an offer for shareholders. Their advice and reasoning should be included in relevant communications. If there is disagreement within the board or with the adviser on the offer, expla - nations must be presented to shareholders, including the dissenting directors’ view. Direc - tors with conflicts must be disclosed and should not vote on the offer. If the offering company is publicly traded or has a conflict, it also needs an independent adviser and shareholder approval.
Bahrain Bourse (BHB) has also introduced Mar - ket Making Guidelines with the aim of boosting liquidity in capital markets in Bahrain. This is expected to help bring liquidity into the market for securities that are not as actively traded. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies It is not unusual for a bidder to build a stake prior to launching an offer. The structure of the market does not facilitate stakebuilding as the lack of market depth coupled with scarce vola - tility implies that any stakebuilding may have a significant impact on the price of the securities to the detriment of the person seeking to build a stake in the company when it comes to launch a subsequent offer, whether mandatory or vol - untary. Furthermore, all trades must be effected in the market, whether in the regular market or in the market for special trades where certain negotiated trades may be settled. However, if a person decides to build a stake prior to launch - ing an offer, it would have to trade on the regu - lar market by placing ordinary trades or seek a negotiated sale with a private seller, which would likely be settled in the special market in the form of “block trade” . 4.2 Material Shareholding Disclosure Threshold The threshold for disclosure to the BHB is trig - gered when a person’s ownership alone or together with that of their minor children, or any other accounts under their disposal, or the ownership of any of their associate or affiliate companies, amounts to 5% or more of any listed security of a joint stock company. In addition, all persons must obtain the CBB’s prior written approval to execute any order that
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