Proposed Amendments to Bahrainization in the Private Sector

18 September 2024 - Bahrain's Council of Representatives is in the process of reviewing a proposed law that may restrict the employment of foreign nationals in private-sector businesses to a maximum of 30%. The draft law also proposes financial penalties, potentially amounting to 20% of a foreign employee's salary, or administrative sanctions, for companies that do not comply with the new regulations. While the specifics are still under discussion, it is expected that the 30% limit will be progressively increased.

Additionally, Bahraini authorities are expected to regulate the total number of work permits issued to foreign nationals within certain periods. The legislative process in Bahrain can be lengthy, requiring approval from both the Shura Council and the Council of Representatives, or the National Assembly if applicable, before the King's endorsement. 

Deloitte’s view

The proposed changes form part of a wider Bahrainization initiative by the Bahraini government to boost the involvement of Bahraini nationals in the private sector. The government aims to secure private sector employment for 20,000 Bahraini nationals and provide training to at least 10,000 Bahraini nationals by the end of 2024.

The proposed changes, if enacted, could have substantial implications for the private sector, especially for businesses that heavily rely on foreign labour. The proposed law could necessitate a shift in hiring practices and may lead to increased operational costs due to potential penalties. It could also affect the diversity and skill sets available within the workforce.

Companies are advised to stay informed about these potential changes and to proactively reassess their recruitment strategies. It is crucial for businesses to consider the potential impact on their operations and to plan for a more balanced workforce in anticipation of the new legislation.

Contacts

Our immigration experts listed below would be happy to discuss the above matters in more detail or support you through a further discussion on your immigration requirements.

Hadi Allawi
hallawi@deloitte.com

Mohammed Haque
mhaque@deloitte.com

Nutan Patel
nupatel@deloitte.com

Syed Mansoor
mansyed@deloitte.com