WT/TPR/S/185 Trade Policy Review 
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II. TRADE AND INVESTMENT REGIMES 
(1) THE INSTITUTIONAL FRAMEWORK  
1. The current ruler of Bahrain acceded to the th rone in March 1999, following the death of his 
father who had ruled since independence from the United Kingdom in 1971.1  In late 2000, the Amir 
appointed a committee to assist in drafting a National Action Charter (NAC) that advocated turning 
Bahrain into a constitutional monarchy with an el ected Council of Representa tives and an appointed 
Consultative Council.  Following a national referendum, a new constitution was adopted on 
14 February 2002;  it changed the country from emir ate to a constitutional monarchy, made the King 
the Head of State, and provides for equal treatment for women. 
2. In 2002, Bahrain was divided into five administrative governorates, replacing the four 
established in 1996: the capital, Manama; the island of  Muharraq; Central District; Northern District; 
and Southern District.  According to the author ities, the new system is intended to improve the 
delivery of government services and the accountability of officials.  A Parliament was established in 
October 2002 for a four-year term, the second legisl ative elections were held in November 2006.2  
However, its ability to challenge royal authority is in practice limited, leaving the King as the 
predominant political player.  Under the new Constitu tion, associations or trade unions are allowed. 
3. According to Article 32 of the Constitution, the system of government rests on a separation of 
the legislative, executive, and judicial authorities.  Legislative authority is vested in the King and the 
Parliament, while executive authorit y is vested in the King together with the Council of Ministers.  
The King exercises his powers directly and through the Ministers, jointly answerable to him for 
general government policy;  each Minister is answer able for the business of his Ministry.  The King 
also appoints and dismisses the Prime Minister by Royal Order, and appoints and dismisses Ministers 
by Royal Decree as proposed by the Prime Minister.3  Moreover, he is the supreme commander of the 
armed forces and chairs the higher judicial system.  The King also has the right to amend the Constitution, propose laws, and is the ra tification and promulgation authority.
4 
4. Headed by the Prime Minister5, the Council of Ministers is entrusted with overseeing State 
interests, laying down and implementing government policy, and supervising government business in.  
Cabinet resolutions may only be passed when th e majority of members are present and with the 
approval of the majority of those present.  Where a Royal Decree is required, Cabinet resolutions are submitted to the King for ratification. 
5. The Parliament consists of two Chambers: the Consultative Council and the Council of 
Representatives.  The Consultative Council is compo sed of 40 members appointed by Royal Order.  
The King also appoints the President of the Consu ltative Council, for the same term as the Council, 
and the Council, in turn, elects two Vice-Presid ents for each convening period.  The Council of 
Representatives also comprises 40 members elected by direct, secret general ballot.  At its first session, the Council of Representatives chooses a President and two vice-Presidents from among its 
                                                     
 
1 The succession process to the thro ne is passed from father to eldest son unless the King designates 
one of his other sons to succeed him during his life time (A rticle 1(b) and (c) of the Constitution;  this clause of 
the Constitution is not subject to amendment (Article 120(c)). 
2 In Bahrain, Parliament is referred to as the National Assembly, which combines the Council of 
Representatives and the Consultative Council. 
3 Section 1, Article 33 of the 2002 Constitution. 
4 Article 35 of the cons titution (legislative powers). 
5 The Prime Minister since 1971 is an uncle of the King.  He is an influential figure, responsible for 
much of the day-to-day running of the country. Bahrain WT/TPR/S/185 
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members.  Members of the two Chambers serve for a four-year term and can either be re-elected in 
the case of the Council of Representatives or re-appointed by the King for the Consultative Council.   
6. Under Article 104 (b) of  the Constitution, the j udiciary is an independe nt and separate body.  
The highest judicial authority is the Constitutional Court; the King retains the power of pardon.  The 
Constitution also provides for a Higher Judicial Counc il to supervise the functions of the courts and 
their offices.6  The President and six Judges of the Cons titutional Court are appointed by, and may be 
removed from office through, Royal Decrees.  At a lo wer level, the judiciary consists of civil courts 
and Sharia or Islamic courts.  Sharia courts deal  primarily with personal ma tters (including marriage, 
divorce, and inheritance).  There is a Sharia Court of  Appeals;  appeals beyond the jurisdiction of this 
Court are dealt with by the Supreme Court of Appeals.   The civil system consists of lower civil courts, 
high civil courts, the High Civil Court of Appeals a nd the Court of Cassation.  Decision taken by the 
Sharia courts and the civil courts may be appealed to the High Court of Appeals, which is the highest 
appellate court.   
7. The Crown Prince, the King's eldest son, is  the Chairman of the Economic Development 
Board (EDB) and the Commander in Chief of the defence forces.  The EDB was set up in 2001 to 
provide strategic direction on the management of th e economy, and in particular to facilitate private-
sector investment.  In effect, the EDB now has overarching responsibility for formulating and overseeing Bahrain's economic developm ent strategy and for creating the right climate to attract direct 
investment.  Its Board of directors includes seven  government ministers and seven private-sector 
executives.  The Board's composition is designed to  enable the public and private sectors to work 
closely to achieve Bahrain's strategic objectives for change and growth.  The EDB is also responsible 
for attracting inward investment into Bahrain a nd, according to government sources, is focusing on 
several economic sectors with significant development potential.   
8. The National Committee (NC) was created by the Cabinet Decision No. 25 of 1996 to deal 
with WTO-related matters.
7  It acts under the supervision of the Ministry of Industry and Commerce, 
as an advisory body to Bahrain's negotiating te am.  The NC is supported by two sub-committees 
covering general issues a nd services-related matters. 
(2) TRADE POLICY FORMULATION AND IMPLEMENTATION  
9. Formulation and implementati on of Bahrain's trade policy are the responsibility of the 
Ministry of Industry and Commerce, in coordination with other ministries and trade-related bodies including the Economic Development Board, Ministry of Finance, and Central Bank of Bahrain.  The 
private sector provides inputs to trade policy fo rmulation through the Chambers of Commerce and 
Industry.   
10. Trade policies are formulated and implemented by means of legal instruments. Bills are 
prepared by the relevant ministries, and presente d successively to the Council of Ministers, the 
Council of Representatives, and the Consultative Council,  and are then signed by the King.  Under the 
2002 constitution, the Council of Representatives has the power to comment on and alter legislation 
presented by the Prime Minister as well as suggest  new laws;  in principle, laws cannot be 
promulgated unless approved by both Chambers and ratified by the King.  In the event of the 
Consultative Council twice rejecting the proposals of  the Council of Representatives, a joint vote is 
                                                     
 
6 Article 105 (c) of the Constitution. 
7 The NC comprises representatives from the various mi nistries and the private sector;  it is chaired by 
the Minister of Indust ry and Commerce.   WT/TPR/S/185 Trade Policy Review 
Page 12 
 
 
held.8  Once a Bill is signed by the King, it becomes a Legislative Decree and must be published in 
the Official Gazette  within two weeks of promulgation, coming into effect one month after its 
publication;  this period may be shortene d or prolonged if the law so prescribes.9  Parliament can also 
question and call for no-confidence votes in Ministers, but not in the Prime Minister.  A Minister must 
resign if two thirds of the members of Parliament pass a vote of no confidence in him or her.   
11. In descending order of importance, the Constitu tion is followed by Laws, Royal Decrees and 
Orders, Prime Ministerial Decrees and Orders, and Ad ministrative Orders.  Treaties and international 
agreements concluded by Bahrain have legal power in national courts.  In the absence of statutory 
provision, a judge may derive the bases of his judgement from Islamic Law (Sharia), followed by  
rules of custom, principles of natural law, justice, and good conscience.   
12. The Uruguay Round Agreements became part of Bahrain's laws, after Legislative Decree 
No. 7 was ratified by the Amir on 12 July 1994.  Si nce becoming an original Member of the WTO in 
1995, Bahrain has been reviewing and amending its laws to conform with its WTO obligations.  
Several new laws have been introduced since its last TPR in 2000, including a revised Commercial 
Companies Law (2001), a trade remedies law coveri ng anti-dumping, subsidies and countervailing, 
and safeguards measures, as well as other laws relating to patent and utility modes, trade marks, trade 
secrets, geographical indications, drawings and in dustrial designs, and integrated circuits.  
13. As a member of the Gulf Co-operation Council (GCC), Bahrain has to harmonize its trade-
related legislation with that of the other memb ers (section (4)(ii)(a) below).  According to the 
authorities, this objective has been achieved to a large extent.  As at 10 October 2005, fifteen GCC 
resolutions had been adopted covering, inter alia , issues relating to the extension of domestic 
treatment to all GCC nationals, customs-related issu es, and introduction of an industrial organization 
law/regulation in GCC countries.10  Bahrain has also taken steps to align its trade-related legislation 
on the WTO Agreements, as well as establishing the ade quate institutions to monitor it.  In general, 
investment in Bahrain is regulated by the Comme rcial Companies Law (CCL) of 2001 (Table II.1).  
According to the authorities, a new CCL has been dr afted and is currently in the legislative process 
(section (5) below).   
                                                      
8 According to Article 87 of the Constitution, if th e government requests the urgent consideration of a 
bill that regulates economic or financial matters, it has to submit it to the Counc il of Representatives for a 
decision within fifteen days.  When that period elapses, the bill is presented to the Consultative Council (with 
the opinion of the Council of Representatives if any) for a decision within a further period of fifteen days.  If the two Chambers disagree on the bill, the matter is referred to  the Parliament for a vote within fifteen days.  If the 
Parliament does not reach a decision within that period, the King may issue the bill as a Decree. 
9 Article (122) of the Constitution. 
10 The following business activities are permitted only to Bahraini nationals:  "Haj and Umra" (Islamic 
pilgrinage) services; foreign manpower supply offices; comme rcial agencies; real estate services, and rental and 
management of land and property; certain social servi ces, including care for the handicaped and the elderly; 
press, publication and distribution houses (daily, non-daily, and specialized newspapers and magazines). Bahrain WT/TPR/S/185 
 Page 13 
 
 
Table II.1 
Main trade-related laws in Bahrain, March 2007 
Laws Issue 
GCC Common External Customs Tariff Tariff 
Law No. 7 of 2002 on Bahrain’s Implementation of the GCC 
Unified Economic Agreement GCC Unified Economic Agreement 
GCC Common Customs Law of 2003 (Implemented in Bahrain 
under Legislative Decree 10 of 2002) Customs issues; import and export re strictions;  rules of origin 
Law No. 25 of 1996 Establishment of WTO National Committee 
Ministerial Decree No. 10/1976 Trade restrictions for explosives 
Commercial Company Law No. 25 of 1975 as amended by Law 
No. 21 of 2001, Company law and registration of companies 
Commercial Registration Law No. 1 of 1961 as amended by Law 
No. 34 of 1976, and by Law No. 12 of 1978 Establishes and regulates the Commercial Register 
Commercial Agency Law No. 10 of 1992 as amended by Law No. 
8 of 1998, as amended by Law No. 49 of 2002 Regulates commercial agencies in Bahrain 
Commercial Law No. 7 of 1987 Regulates commerce in Bahrain 
Law 15 of 1979 on land registration; Law 40 of 1999 on land 
ownership for GCC nationals; Law 9 of 2004, strata deals; Law 
No. 2 of 2001 and accompanying Cabinet Decisions, for non-GCC 
citizens; Prime Ministerial Resolution No. 5 of 2001, as well as 
No. 9 of 2003, which dictates areas for foreign investment Land ownership 
Law No. 6 of 1990 on Monitoring Precious Metals Regulates and monitors precious metals 
Law No. 10 of 1990 on Monitoring Pearls and Precious Stones  Regulates and monitors pearls and precious stones 
Ministerial Orders No. 4  & No. 12 of 1995 Classification of service activ ities undertaken by J.S and W.L.L. 
companies with 100% foreign ownership  
Legislative Decree No. 13 of 1991 Foreign investment  in limited-liability or joint-stock companies 
Amiri Decree No. 16 of 1985, as amended by Law No. 13 of 
1992 Standards and metrology 
Ministerial Order No. 6 of 1992 General safety requirements of products and their fitness for 
purpose 
Legislative Decree No. 20 of 1983 on Plan t Quarantine Phytosanitary regulations  
Law No. 5 of 2003 on Bahrain’s Implementation of the GCC 
Common Law on Plant Quarantine Phytosanitary regulations 
Legislative Decree no.28 of 2002  Electronic Transactions 
Ministerial order no. 4 of 2004  Accreditation and Supervision of Certification Service Providers 
(CSPs) 
Law No. 22/2006 replacing Copyright Law of 1991 Copyright 
Law No. 14/2006 replacing Bahrain Patents, Designs and Trade 
Marks Regulation, of 1955;  Legi slative Decree No. 22 of 1977, 
Replaced by Law No. 1/2004   Patents  
Geographical Indications Law No. 16 of 20 04 protection of Geographical Indications 
Law No. 5 of 2006 and Law No. 6 of 2006 Integrated Circuits and Industrial designs  
Law No. 11/2006 to replace Trade marks Law No. 10 of 1991 Trade marks 
Law No. 7 of 2003 as amended by Law No. 12 of 2006 Trade secrets 
Law No. 6 of 1986 Regulation of Industry in Bahrain 
Legislative Decree No. 48/2002 Telecommunication Law establishing the TRA 
CBB Law, issued by Decree No. 64/2006, replacing the BMA 
Law of 1973 and the Insurance La w (Legislative Decree No. 17 
of 1987 Establishment of the Central Bank of Bahrain and its 
responsibilities  
Amiri Decree No. 4/2000 on the prevention of mone y laundering Control of money market instruments 
Law No. 19 of 2006 Establishing the Labour Market Regulatory Authority 
Law No. 57 of 2006 Establishing the Labour Market Fund 
Labour Law No. 23 of 1976 as amended by Law No. 73 of 2006 Labour law 
Decree No. 41/2002 Policies and guidelines for privatization 
Law No. 4 of 2006 on Bahrain’s Implementation of the GCC 
Common Law on Anti-dumping, Countervailing Measures, and 
Safeguard  GCC Common Law on Anti-dumpin g, Countervailing Measures, 
and Safeguard 
Legislative Decree No. 36/2002 and Decree No. 37/2002 on 
General Tenders and Government  Procurement Regulations, and 
Implementing Regulations Government procurement and the Tender Board 
Source: Information provided by the Bahraini author ities. Viewed at http:/ /www.legalaffairs.gov.bh. WT/TPR/S/185 Trade Policy Review 
Page 14 
 
 
(3) POLICY OBJECTIVES  
14. Bahrain's main goal is to deve lop sound economic (including tr ade) policies with a view to 
increasing growth, diversifying the economy away  from oil and creating more employment 
opportunities for all its citizens.  The policies also aim to attract local and foreign investment to 
develop further Bahrain's economy.   
15. The Government recognizes the importance of trad e and investment to its overall goals.  To 
this end, it lays emphasis on the role of the private sector in resource development as well as in 
activating the economy.  The government believes that  a liberal policy must be accompanied by a new 
public administration mindset, oriented to stream lined procedures, transparency, elimination of 
jurisdictional overlapping, improved servi ces, and updated economic legislation.11 
16. Efforts are being channelled to promote and a ttract investments in: services (e.g. finance, 
tourism), and industries such as aluminium, petroc hemicals and plastics, engineering, pharmaceutical 
and food processing, building materials, industria l services and support, knowledge-based industries, 
and garments and textiles.12  In addition, a number of developm ent projects are under way, such as the 
Bahrain Financial Harbour, Bahrain Wo rld Trade Center and Bahrain Bay. 
17. Bahrain is in favour of trade liberalization through the multilateral framework.  It also 
believes that its membership of the WTO would send a strong message to potential foreign investors about its commitment to a rules-based system.  At  the same time, regional agreements, such as the 
GCC and the Greater Arab Free Trade Area (GAFTA),  as well as bilateral free-trade agreements such 
as with the United States, are also being pursued as Bahrain believes that they are complementary to 
the MTS.   
(4) T
RADE AGREEMENTS  
(i) WTO 
18. A contracting party to the GATT since 13 December 1993, Bahrain deposited its instrument 
of ratification of accession to the WTO on 27 July 1994 and became a founding Member of the WTO on 1 January 1995.  Bahrain is a signatory to th e WTO's Information Technology Agreement (ITA).  
It has not been involved in any dispute under the WTO Dispute Settlement Mechanism, either directly 
or as a third party.  Bahrain's trade-related notif ications to the WTO are presented in Table II.2. 
19. Bahrain grants at least most-favoured-nation (MFN) treatment to all its trading partners .  It 
benefited from transition periods (a vailable to developing countries) to implement some of its 
commitments, including under the WTO Agreements  on Customs Valuation.  As stated earlier, 
Bahrain is a strong believer and advocate of the multilat eral trading system.  It is actively participating 
in the current round of multilateral trade negotiations .  Its main interests in the Doha Development 
Agenda (DDA) include greater non-agricultural mark et access (NAMA) and further liberalization of 
trade in services.  In services, Bahrain was one of  the few Members that resp ected the initial deadline 
for submitting initial and revised offers.  Its revise d offers reflect, to a large extent, the policy 
objectives set by the government and its reform proc ess that is currently under way (Chapter IV(5)).
13  
Bahrain also supports the strengthening of tec hnical assistance programmes for developing and least-
developed countries.   
                                                      
11 National Action Charter (NAC). 
12 Ministry of Industry (2006), Investor's Guide to Bahrain .   Viewed at:  h ttp://www.commerce.gov. 
bh/NR/rdonlyres/7FCD1FE3-63B5-48AD-8C8D-05607F23CD93/0/InvestorsGuide.pdf [10 October 2006].  . 
13 TN/S/O/BHR, dated 29 April 2003 and TN/S/O/BHR/Rev.1, dated 23 June 2005. Bahrain WT/TPR/S/185 
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Table II.2 
Bahrain's selected notifications to the WTO, as of March 2007  
WTO Agreement Description of 
requirement Periodicity Most recent notification Comment 
Agriculture     
Article  10 & 18.2 Export subsidies Annual G/AG/N/BHR/1 
2 September 1997 No export subsidies in 1996 
Article  18.2 DS:1 & DS:2 Domestic support  G/AG/N/BHR/2 
2 September 1997 List of DS measures in 1996 
Article 18.2 DS:1 & DS:2 Domestic support  G/AG/N/BHR/3 
25 October 2004 List of DS measures in 
1995-97 
 
General Agreement on 
Trade in Services     
Article III:4 or IV:2 Enquiry point Once, then 
changes S/ENQ/48 
26 September 1997 Directorate of foreign Trade 
Ministry of Commerce 
GATT Article XXIV:7(a)p       GATS Article V:7(a) RTA  WT/REG219/N/1 
S/C/N/375 15 September 2006 U.S.-Bahrain Free Trade 
Agreement in force on 1 
August 2006 
General Agreement on 
Tariffs and Trade     
GATT Article XXVIII:5 
1994 Invocation of 
Paragraph 5 of 
Article XXVIII  G/MA/56 
1 April 1997 G/MA/102 7 February 2000  Exercising rights on 
modification of Schedule 
XCVIII 
Agreement on the Implementation of 
Article VI     
Article 16.4 AD Actions Semi-A nnual G/ADP/N/72/Add.1/Rev.1 
12 October 2001 G/ADP/N/85/Add.1/Rev.1 G/ADP/N/78/Add.1/Rev.2 14 October 2002 G/ADP/N/98/Add.1/Rev.1 G/ADP/N/92/Add.1/Rev.2 15 October 2003 G/ADP/N/119/Add.1 G/ADP/N/112/Add.1/Rev.1 G/ADP/N/105/Add.1/Rev.2 G/ADP/N/2/Add.1/Rev.6 20 October 2004  No Anti-dumping, action 
taken during the 6-month 
period  
Article 18.5 GATT 1994 
Article VI  Laws and 
regulations Once, then 
changes G/ADP/N/1/BHR/1 
3 June 1997   No laws/regulations on 
Anti-dumping 
Agreement on Implementation of 
Article VII     
Article 20.1 & 20.2 Customs 
Valuation Once WT/Let/149 
11 July 1997 Delayed implementation 
(transition period of three 
years) 
Implementation of Article VII     
Para. 1 of Annex III  Customs 
Valuation Once G/VAL/W/57 
13 January 2000 G/VAL/W/57/Add.1 15 September 2000 G/VAL/W/57/Add.2 14 November 2000 Request to delay up to 
1/1/2007 the 
implementation of CV 
agreement 
    Table II.2 (cont'd) WT/TPR/S/185 Trade Policy Review 
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WTO Agreement Description of 
requirement Periodicity Most recent notification Comment 
   G/VAL/W/57/Add.3 
9 March 2001 G/VAL/W/57/Add.4 9 August 2001   
GATT 1994 
Article XVII:4(a)) State Trading 
Enterprises Annual G/STR/N/4/BHR 
G/STR/N/5/BHR G/STR/N/6/BHR 5 October 2000 G/STR/N/4/BHR/Rev.1 G/STR/N/5/BHR/Rev.1 G/STR/N/6/BHR/Rev.1 27 February 2001  State Trading activities 
Import Licensing 
Article 1.4(a) & 8.2 (b) Import Licensing 
Laws and 
regulations Once, then 
changes G/LIC/N/1/BHR/1 
13 June 1997 No legislation on import 
licensing procedures 
LIC Article 7.3 Import Licensing Once, then 
changes G/LIC/N/3/BHR/1 
15 September 2000 No import licence 
requirements 
Preshipment Inspection 
Article5  Laws and 
regulations Once, then 
changes G/PSI/N/1/Add.6 
6 June 1997 No laws and regulations 
relevant to the Agreement 
Market Access  Notification 
procedures 
quantitative 
restrictions Every two years 
from 31 January 
1996 G/MA/NTM/QR/1/Add.7 QR maintained 
Market Access    G/MA/NTM/QR/1/Add.8 
1 March 2002 G/MA/NTM/QR/1/Add.10 28 March 2006 QR changed 
Subsidies and 
Countervailing Measures      
Article 25.1 - Article XVI:1 S ubsidies Annual G/SCM/N/38/BHR 
G/SCM/N/48/BHR G/SCM/N/60/BHR 27 July 2000  Subsidies provided to the 
industrial sector 
Article 25.11 Countervailing 
measures Semi-annual G/SCM/N/4/Add.1/Rev.4 
G/SCM/N/7/Add.1/Rev.12 G/SCM/N/12/Add.1/Rev.13 G/SCM/N/19/Add.1/Rev.11 G/SCM/N/98/Add.1/Rev.2 G/SCM/N/106/Add.1/Rev.1 G/SCM/N/113/Add.1 October 2004 No countervailing action 
during the period 1 July 94 - 
30 June 2004 
Safeguards       
Article 12.6 Safeguards Once, then 
changes G/SG/N/1/BHR/1 
12 June 1997 No laws and/or regulations 
Sanitary and Phytosanitary 
Measures Enquiry Point  G/SPS/NNA/10 and  
G/SPS/ENQ/20  6 October 2006 NNA and enquiry point is 
the Directorate of Public 
Health for food safety; the 
Directorate of Welfare under the Ministry of 
Municipal Affairs and 
Agriculture for animal and plant health.  
Article 7 Annex B Sanitary and 
Phytosanitary 
Measures Ad hoc G/SPS/N/BHR/7 
G/SPS/N/BHR/6 G/SPS/N/BHR/5 7 November 2005 Emergency measures 
   Table II.2 (cont'd) 
 Bahrain WT/TPR/S/185 
 Page 17 
 
 
WTO Agreement Description of 
requirement Periodicity Most recent notification Comment 
Technical Barriers to 
Trade     
Annex 3C Code of Good 
Practices  G/TBT/CS/N/80 
18 September 1997 Directorate of Standards 
and Metrology, Ministry of 
Commerce 
Article 15.2 Implementation & 
administration of 
Agreement  G/TBT/2/Add.19 
2 August 1996 Directorate of Standards 
and Metrology, Ministry of 
Commerce 
Article 2.9 Notifications  G/TBT/N/BHR/8 
G/TBT/N/BHR/7 G/TBT/N/BHR/6 3 November 2006  Notification of technical 
regulations 
Article 5.6 Notifications  G/TBT/N/BHR/5 
2 August 1996 G/TBT/N/BHR/2 14 January 2005 Notification of technical 
regulations 
 Establishment of 
Enquiry Point  G/TBT/ENQ/28 
27 October 2006 Bahrain Standards and 
Metrology Directorate 
(BSMD) 
Trade-Related Investment Measures     
Article 6.2 Investment  G/TRIMS/N/2/Rev.11/Add.
5 
14 October 2004 Domestic and foreign 
investment law and 
regulations 
Trade-Related Aspects of Intellectual Property Rights     
TRIPS Article 63.2 Copyright and 
neighbouring 
rights Once, then 
changes IP/N/1/BHR/4 
22 October 2004  Law on Patents & Utility 
Models, on Trade Secrets, 
and on Geographical 
Indications 
Article 69 Contact points Once, then 
changes IP/N/3/Rev.4/Add.4 
25 October 2000 Ministry of Commerce – 
Agencies and Industrial 
Property Directorate 
Source: WTO documents.  
(ii) Regional agreements 
(a) Gulf Cooperation Council (GCC) 
20. The GCC was created on 25 May 1981 by Bahrai n, Kuwait, Oman, Qatar, Saudi Arabia, and 
the United Arab Emirates.14  Behind its formation was a general perception by these countries of their 
vulnerability arising from their oil wealth, their small and dispersed popula tions (28 million), their 
vast surface area (2.6 million square kilometres), and their limited military capabilities in a generally 
unstable region.15  The main objectives of the GCC Agreement are regional cooperation and 
integration in all economic, social, and cultural affair s, including trade, industry, investment, finance, 
transport, communications, and energy.  Its specif ic objectives are to achieve a common market, with 
equal treatment of GCC citizens in  each member country in respect of freedom of movement, work, 
residence, ownership of real estate, movement  of capital, as well as financial and monetary 
coordination including adoption of a common currency.  At the December 2005 summit in Abu Dhabi, GCC leaders endorsed five macro- economic and budgetary convergence criteria for 
monetary union by 2010.  The convergence criteria  include a cap on budget deficits relative to 
national gross domestic product, the public debt to GDP  ratio, inflation rates, national interest rates, 
                                                     
 
14 See GCC online information.  Viewed at:  http://www.gcc-sg.org/index_e.html. 
15 European Commission (2003). WT/TPR/S/185 Trade Policy Review 
Page 18 
 
 
and adequacy of foreign exchange reserves.  Techni cal details, including rates and ratios, are currently 
under discussion between Ministers of Finance and central bank governors. 
21. In 1983, the GCC member states set up a fre e-trade area, whereby originating goods were 
exempt of customs tariffs.  That agreement wa s notified to the GATT, under the enabling clause, on 
11 October 1984.  Since January 2003, the GCC states have been in the process of setting up a 
customs union.  A common across-the-board tariff of  5% on most products has been in place since 
January 2003; and the GCC Common Customs Law of  2003, which is implemented in Bahrain under 
Royal Decree 10 of 2002, provides for common origin rules for all the members (Chapter III(2)(iii)).  
However, practical details on certain trade i ssues have yet to be addressed, including fully 
harmonizing the list of products subject to rates highe r than 5%, standards, and technical regulations. 
22. In 1989, the GCC and EC concluded a Coope ration Agreement under which their Foreign 
Ministers hold a Joint Council/Ministerial meeting on ce a year.  The objective of this agreement is to 
facilitate trade relations, and to contribute  to strengthening stability in the region.16 The GCC is 
negotiating a free-trade agreement w ith the European Communities (EC)17;  on 6 July 2004, the GCC 
and China signed a framework agreement on economic, trade, investment, and technical cooperation;  
and a free-trade agreement is also under negotiation.18 The GCC is also negotiating free-trade 
agreements with the EFTA states, India, Japan ,  MERCOSUR, Pakistan, Singapore, and Turkey. 
(b) Greater Arab Free-Trade Area (GAFTA) 
23. Under the Greater Arab Free-Trade Area (GAFTA) Treaty19, signed on 19 February 1997, 
and in force since 1 January 1998, all trade barriers among its members were eliminated without 
exception on 1 January 2005.  Nonetheless, non-tari ff barriers, in particular, standards, lengthy 
bureaucratic and administrative procedures at the borders, transit fees, and certificates of origin, are still reported as costly/lengthy procedures.  The treaty also provides for origin rules (Chapter III(2)(iii)).  The principal entity res ponsible for implementing the programme is the 
Economic and Social Council of the League of Arab  States (LAS).  The GAFTA was notified to the 
WTO by Saudi Arabia in 2006.  In recent years,  the GAFTA has contributed modestly to increasing 
inter-arab trade.   
(iii) Bilateral agreements 
24. Bahrain has signed bilateral economic c ooperation agreements with 14 countries.
20  It also 
concluded a free-trade area agreement (FTA) with th e United States.  This FTA covers trade in goods, 
IPRs and services, and entered into force in A ugust 2006.  According to the authorities, with the 
exception of the ongoing bilateral negotiations be tween some GCC Members and the United States, 
all future bilateral agreements w ill be negotiated at the GCC level, not by individual members.   
(iv) Other preferential arrangements 
25. Bahrain does not participate in the Global System of Trade Preferences (GSTP) among 
developing countries;  it neither provides nor receives trade preferences under the Generalized System 
                                                      
16 European Commission (2003). 
17 See WTO (2004) for details. 
18 Xinhua Financial Network , 7 July 2004. 
19 The GAFTA members are: the GCC countries plus Algeria, Egypt, Iraq, Jordan, Lebanon, Libyan 
Arab Jamahiriya, Morocco, Palestinian Authority, Somalia, Sudan, Syrian Arab Republic, Tunisia, and Yemen. 
20 Turkey, Bangladesh, Republic of  Korea, China, India, Singapore , France, Australia, Greece, Russia, 
Thailand, Malaysia, Iran, and Belarus.  Bahrain WT/TPR/S/185 
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of Preferences (GSP).  Bahrain is a member of  the Organization of Arab Petroleum Exporting 
Countries (OAPEC).21 
(5) INVESTMENT FRAMEWORK  
26. Bahrain's investment policy is implemented th rough licences, the basic requirement for all 
businesses.  Major efforts have been made by the G overnment to streamline and facilitate licensing 
procedures since the 2000 TPR of Bahrain.  The Bahr ain Investors' Centre (BIC) (one-stop shop) is 
one of the key strategic projects adopted by the Ministry of Industry and Commerce in its plan for 2003-06.  The idea behind the initiative is to bring together all the services (by public and private 
organizations) required by an investor.
22 Licensing is based on a single application form that 
combines the requirements of all ministries involved in  the regulation of the activity to be licensed;  
the process is computerized.  All ministries invol ved have committed to specified deadlines for the 
completion of the licensing process.  Annual application fees amount to BD 20.   
27. The Commercial Company Law (CCL), the main legal reference on foreign investment, has 
been revised over the years in order to allow increas ed foreign participation in local companies.  A 
revised CCL was adopted in 2001.23  Articles 345 and 346 of the CCL authorize the Minister of 
Industry and Commerce (MIC), in agreement with the relevant Ministers, to allow up to 100% foreign 
equity ownership in companies provided for by th e law: general partnership companies; limited 
partnership companies; association in participati on; joint-stock companies; limited partnership by 
shares; limited liability companies; single-person companies;  and holding companies.  The same 
treatment is extended to the establishment of representative offices or branches of foreign 
companies.24  About 1,370  branches are registered at the MIC, and operate in various sectors.  
Foreign investment in petroleum extraction is pe rmitted through exploration and production-sharing 
agreements with the Government of Bahrain; priv ate investment in refining activities is permitted 
(Chapter 4(3)(ii )). 
28. The services sector is a component of Bahrain's overall policy of economic diversification and 
the Government is promoting its development.  Fore ign investment is allowed in most activities, with 
the exception of those restricted to Bahrainis, i.e.  real estate services and rental and management of 
land and property (not including buying and selling,  management of personal property or consultancy 
services);  press, publication and distribution (dai ly, non-daily and specialized newspapers and 
magazines), printing press, cinematic film studio, management and operation of cinema theatres and film distribution, cinema halls;  land transpor t of goods and passengers, tourist land transport, 
domestic sea cruises, driving instruction, motorcycle  rental, car rental, call taxi;  oil products supply 
(filling stations), gas bottling and distribution, cooke r re-filling and repair, gas cylinder distribution;  
handling and processing formalities with government departments and authorities;  Hajj and Umra 
services;  foreign manpower supply;  commercial agencies;  and small business services. 
29. Moreover, a number of businesses are still rest ricted only to Bahraini and other GCC 
nationals: fishing;  bookkeeping and accounting services (not including auditing);  imports, exports 
and/or sales of racing car fuel;  and cargo clearing.  Foreign investment is also restricted in trade and retail (a minimum of 51% Bahraini ownership required in the case of investment by non-GCC 
                                                     
 
21 OAPEC groups ten Arab oil producers and includes three non members of OPEC: Bahrain, Egypt, 
and Syria.  It was established in 1968 with the aim of coordinating members' oil policies. 
22 Ministry of Industry and Commerce (2006).  
23 CCL, Decree Law No. (21) of 2001. 
24 Article 348 of the CCL requires any branch, agen cy or office to provide a guarantee to ensure 
perfomance of its obligations.  This guarantee could either be a sponsorship by the head office or by a Bahraini sponsor or a bank deposit.  The Minister of Industry and Commerce determines the type of guarantee required. WT/TPR/S/185 Trade Policy Review 
Page 20 
 
 
nationals, and a Bahraini partner is required in the cas e of investment by other GCC nationals);  travel 
and tourism offices (a Bahraini partner is required);  medical clinics and centres (licensing is confined 
to Bahraini and GCC nationals (resident in Bahrain), with medical qualifications25; and pharmacies (a 
minimum of 50% ownership by a Ba hraini pharmacist is required). 
30. Investment (domestic or foreign) is prohibited in, inter alia , certain courier services and 
exploration of petroleum (because of State monopolies);  gambling;  alcoholic drinks manufacture;  narcotics manufacture;  weapons manufacture;  ciga rettes manufacture;  imports of all types of waste 
and treatment;  storage and dumping of radioactive materials and toxic waste in Bahrain;  imports, 
manufacture and trade in asbestos and its bi-products  (not including asbestos removal);  imports and 
industrial use of restricted chemicals;  and imports  of automatic cigarette vending machines).  All 
such activities, either prohibited or r estricted, are published in a negative list.
26  
31. A number of companies in the services sector have  been privatized over the past ten years 
(Chapter III(4)(iii)).  However, some state-owned companies continue to dominate services activities, 
and still operate under monopoly, or hold exclusive rights, including:  Aluminium Bahrain (ALBA) 
and Bahrain Petroleum Company (BAPCO), which dominate production in aluminium and petroleum, 
respectively; Bahrain National Gas Company (BANAGAS), Ministry of Electricity and Water 
(MEW), and Bahrain Post (BP).  
32. In its 2007 Index of Economic Freedoms, the U. S.-based Heritage Foundation ranks Bahrain 
the 39th most open economy, out of 157 countries, and the most open in the Arab World.  Bahrain has 
no personal, corporate or withholding tax.  There are no restrictions on capita l repatriation, currency 
exchange, or transfer of dividends.  Non-GCC nati onals are permitted to own property in certain areas 
designated for foreign investors.27 Various incentive schemes are available to investors 
(Chapter III(2)(iv)(d) and (4)(i)).  However, under the "Bahrainization" programme, companies must 
give priority to Bahrainis who are to replace foreign workers (Chapter I(4)) . 
33. There are no restrictions on investment abroad by Bahraini nationals.  Bahrain has signed 
various bilateral trade and investme nt framework agreements;  it si gned a bilateral investment treaty 
with the United States.28  Bahrain is a member of the Multilate ral Investment Guarantee Agency.  It 
has signed double taxation agreements with Thailand, Malaysia, Philippines, France, China, Belarus, 
Singapore, Morocco, Egypt, Jordan, Syria, Algeria, Yemen, and Lebanon. 
                                                      
25 The restriction does not apply to hospitals. 
26 Ministry of Industry and Commerce online inform ation.  Viewed at: ht tp://www.commerce.gov.bh/ 
English/DomesticTrade/Negative+List/. 
27 Law 15 of 1979, land registration; Law 40 of 1999, ownership for GCC nationals; Law 9 of 2004, 
strata deals; Law No. 2 of 2001 and accompanying Cabinet Decisions, for non-GCC citizens; Prime Ministerial 
Resolution No. 5 of 2001, as well as No. 9 of 2003, which dictates areas for foreign investment.   
 28 Department of Commerce (undated). 
 Bahrain WT/TPR/S/185 
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Table II.3 
Bilateral investment treaties, March 2007  
Country Final signature Execution 
Algeria 11 June 2000 6 May 2003 
Belarus 26 October 2002 17 December 2003 
China 17 June 1999 27 April 2000 
Egypt 17 September 1997 21 January 1999 
France 24 February 2004 17 August 2005 
India 13 January 2004 11 November 2006 
Iran 19 October 2002 20 October 2004 
Jordan 8 February 2000 5 July 2000 
Lebanon 7 August 2003 7 August 2003 
Malaysia 24 April 1998 12 March 2000 
Morocco 7 April 2000 9 April 2001 
OPEC Fund for International De velopment 22 July 2004 26 July 2005 
Philippines 7 November 2001 1 April 2002 
Syria 20 September 2000 19 June 2001 
Thailand 21 May 2002 17 July 2002 
United Kingdom 30 October 1991 4 December 1991 
United States of America 19 September 1999 30 May 2001 
Yemen 28 December 2002 8 July 2004 
Source: Information provided by the Bahraini authorities.