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Advancing Digital Recordkeeping in Bahrain

On 28^th December 2025, Ministerial Decision No. (113) of 2025 concerning the Exemption of Institutions, Companies, and Banks that use Electronic Computers for their Accounting from Maintaining Paper-based Commercial books (the “Ministerial Decision”) was published in the Official Gazette. Effectively, the Ministerial Decision recognizes electronic accounting records as legally valid. This is seen as follows:

(a) Under Article 1 of the Ministerial Decision, institutions, companies and banks that rely on computers in their accounting systems in Bahrain are exempted from maintaining paper commercial books.

The above exemption underscores the effectiveness and widespread usage of electronic systems by businesses for their accounting framework in an increasingly digital age. Furthermore, it reduces the burden businesses may face as a result of administrative costs or related expenses in maintaining physical accounting records.

(b) Article 2 of the Ministerial Decision adds to the above by recognizing the usage of electronic commercial books as having the same legal evidentiary value as paper commercial books. By placing such electronic records on the same evidentiary standing of their physical counterparts, it eases any issues that businesses may face for the purposes of general legal and regulatory compliance or filings before court, as may be necessary.

However, Article 2 of the Ministerial Decision is not absolute. As a prerequisite, the following procedures and rules are to be applied to safeguard the accuracy and integrity of the data as recorded by computer systems:

1. The electronic accounting system needs to incorporate sufficient technical protections to preserve the integrity of the stored data and prevent any modification, deletion or alteration that may occur thereto.

 

2. Furthermore, data must also be entered into the electronic systems on a regular basis and within the legally mandated time frames.

Collectively, Articles 1 and 2 of the Ministerial Decision achieve a middle ground between corporate flexibility and responsibility. While the Ministerial Decision grants greater flexibility to businesses in respect of accounting records, at the same time, such businesses must also ensure adequate technological standards are in place and remain compliant with legal requirements.  

In conclusion, the exemption from businesses that rely on electronic based accounting systems, and the legal recognition of such systems represents a progressive and modernized outlook towards company recordkeeping and compliance. As such, the Ministerial Decision enhances ease of doing business under clear safeguards as stated above and strengthens government oversight, which overall generates a more efficient regulatory environment.

Bahrain’s Evolving Framework for Protecting the Rights of Persons with Disabilities

Bahrain has continued to strengthen its legislative approach to supporting persons with disabilities. The framework focuses on improving their access to services, safeguarding workplace rights and encouraging long-term participation in social and economic life. Legislative Decree No. 74 of 2006 (the ‘Disabilities Law’), as amended, remains the foundation of this system, supported by Ministerial Decisions and the implementation of Bahrain’s commitments under international conventions.

A Strengthened Legal Foundation

The Disabilities Law defines a person with disabilities in broad terms, covering physical, sensory and intellectual impairments that limit an individual’s ability to work or perform essential daily functions. This reflects Bahrain’s continuing move toward a practical, inclusive understanding of disability that prioritises rehabilitation and integration.

Bahrain has ratified several international instruments, including the Convention on the Rights of Persons with Disabilities. These commitments help align national practices with international standards.

Training and Pathways to Employment

Rehabilitation and vocational training continue to play a central role in Bahrain’s inclusion strategy. Individuals who complete training programmes receive certificates that detail their qualified professions or tasks. These records are maintained by the Ministry of Social Development and assist in ensuring that job placements match individual skills and training.

Persons with disabilities are entitled to the same workplace rights and protections as other employees. Employers with 50 or more workers must now employ at least 4% of their workforce from qualified persons with disabilities, following the Shura Council’s approval of a 2025 amendment to the Disability Law that raised the quota from the previous 2%. This requirement may be met through candidates nominated by the Ministry of Labour or by hiring qualified individuals independently. Employers who do not comply without a valid reason may face fines and compensation claims.

Workplace Support Measures

The Disabilities Law includes important measures to support employees with disabilities and those caring for close family members with disabilities. These employees are entitled to two hours of paid daily rest time. Ministerial Order No. 80 of 2018 sets the conditions for this entitlement, which must be confirmed by the General Medical Committees of the Ministry of Health.

Pregnant employees with disabilities are eligible for special paid leave based on the recommendation of the medical committee. This leave does not reduce their other statutory entitlements.

Retirement and Long-Term Security

The law provides for early retirement for persons with disabilities who meet the minimum required years of service and do not qualify for a pension under the standard scheme. This provision offers financial stability for individuals who may not be able to continue working due to their condition.

Conclusion

Bahrain has taken consistent steps to build a framework that supports the rights, independence and participation of persons with disabilities. The recent increase in the mandatory hiring quota reflects the country’s continued focus on inclusion. As this framework develops, attention will remain on effective implementation and ensuring that the rights set out in legislation translate into everyday practice across workplaces and institutions.

Bahrain makes Substantial Changes to the Commercial Companies Law

On 8^th September, 2025, Decree Law No. (38) of 2025 amending certain provisions of the Commercial Companies Law issued by Decree Law No. (21) of 2001 (“Decree Law”) was issued. These amendments aimed to overhaul and reinforce the Commercial Companies Law (“CCL”) in the Kingdom of Bahrain in a manner that aligned its framework with better corporate governance, among other changes.

Key Amendments

The key amendments promulgated by the Decree Law are as follows:

• Personal liability of Directors and Managers

Article (18 bis) of CCL expands the liability (personal or joint) of directors, board members and individuals acting as managers (whether covertly or overtly) in respect of any damage affecting the company and related parties if there exists proof of him causing the company to arrange obligations due to negligence, gross error, or violation of provisions of law or the company’s Memorandum of Association or Articles of Association.

Article (18 bis) of CCL further lists exemption from said liability in the event that the violation occurs as a result of a decision taken at a board or assembly meeting provided that the director objects to the decision and records the objection in the meeting minutes. Absence from the meeting would not preclude liability unless the decision was taken without the director’s knowledge and that there was no way to object to the same.

• Electronic Meetings

Article (23 bis) of CCL, in a move to expand digital autonomy in corporate governance was amended to make it permissible for meetings scheduled in accordance with the CCL by means of electronic communication or by telephone provided:

1. Identity of participant and proxy validity of an agent is verified
2. The partner or shareholder is fully able to participate in the meeting
3. Statements or votes made by a participant are properly recorded
4. Other measures specified by the relevant Ministerial decision are followed

 

• Electronic Voting

Article (204) of CCL complements (b) by recognizing the adoption of electronic voting system, with its conditions and controls to be specified through a Ministerial decision.

• Creation of Single Shareholding Company

Article (226) of CCL bolsters a substantial structural reform within companies by allowing the creation of a Bahraini Shareholding Company (closed) by a single shareholder, subject to conditions and controls prescribed by a Ministerial decision and vests said shareholder with the powers of the General and Founding Assemblies. This is a significant improvement from the earlier regime which required the presence of at least two (2) individuals.

• Continuation of Company following Partner’s departure

While the company’s contract may provide for continuation by the remaining partners in the event of a partner’s death, withdrawal or a ruling of interdiction, bankruptcy or insolvency, if the same is not prevalent, by virtue of the amended Article (322)(c) of CCL, partners in a company may now within ninety (90) working days of occurrence of either of the aforementioned events agree unanimously to continue the company amongst themselves. However, such agreement cannot be invoked against third parties except from the date of publication in the Commercial Registry.

• Changes to Corporate Structure

Article 3 of the Decree Law abolished partnerships by participation. Moreover, Article 4 of the Decree Law requires these structures to reconcile their corporate status in accordance with the provisions of the CCL within a period not exceeding three (3) months from the date of implementation of the Decree Law.

• Submission of documents to Ministry of Industry & Commerce

Article (357) of CCL expands the regulatory purview of the Ministry of Industry & Commerce (“MOIC”) by mandating board members, managers, auditors and now individuals in actual management of the company to furnish matters related to the company’s affairs at any time as may be requested by the MOIC.

Conclusion

The aforementioned changes add to the revolving door of corporate governance in the Kingdom of Bahrain while being mindful of international developments. Accordingly, companies should structure their businesses in a manner that aligns with these requirements.

Bahrain Updates Workplace First Aid Rules with Ministerial Resolution No. 16 of 2025

On 13 July 2025, the Ministry of Health issued Ministerial Resolution No. 16 of 2025 on Medical First Aid and Emergency Treatment in the Workplace (the “Resolution”). This measure marks a significant development in Bahrain’s occupational health and safety regime and brings workplace first aid requirements into line with international standards.

Legislative Context

The Resolution repeals Resolution No. 7 of 1976, which dealt mainly with the contents of first aid kits and the conditions for their use. That framework was limited in scope and reflected the occupational safety standards of its time.

By contrast, the new regime is broader. It aligns workplace obligations with the Public Health Law of 2018 and the Private Sector Labour Law of 2012, while also complementing Resolution No. 8 of 2013 on occupational safety and health. Together, these instruments provide a more modern and integrated system for protecting employees.

Purpose of the Reform

The Resolution aims to ensure employees receive prompt and effective medical assistance in the event of workplace injuries or sudden illnesses. Article (1) defines “first aid” as the treatment provided before medical help arrives and a “qualified and trained person” as an employee who has completed an approved training course. These definitions clarify the scope of the new duties.

Employers are required not only to provide equipment but also to appoint trained personnel and prepare emergency procedures, ensuring immediate care is available until professional services can take over.

Employer Obligations

Under Article (2), employers must make arrangements to provide first aid proportionate to the number of workers and the risks of their operations. They must also ensure the injured are transported to the nearest health facility.

Article (3) requires at least one trained first aider for every twenty workers or fewer, with their names recorded in a register. An employee must also be designated to supervise first aid equipment and liaise with authorities. This establishes clear accountability, which was lacking in the earlier regime.

Article (4) obliges employers to provide first aid kits in accordance with the schedule attached to the Resolution. At least one kit must be supplied for every one hundred workers or fewer, and kits must be accessible and include instructions. Employers must conduct regular inspections, replace expired or depleted items, and keep records available for inspection by the authorities.

Article (5) introduces the requirement for a written emergency response plan. This must include contact details for health facilities and ambulance services, evacuation routes and emergency exits, and a map identifying the nearest health facility. The requirement reflects international best practice by ensuring employers plan in advance rather than simply respond to incidents.

Comparison with Previous Rules

The 1976 resolution was limited to listing basic supplies. The new framework is more detailed and imposes continuing duties. While the items required remain broadly consistent with international practice, the focus on expiry monitoring, record keeping, and systematic inspection represents a clear departure. The emphasis is now on ensuring equipment and procedures remain effective in practice.

Penalties for Non-Compliance

Failure to comply may result in penalties under either the Labour Law (Article 192 of Law No. 36 of 2012) or the Public Health Law (Article 129 of Law No. 34 of 2018), depending on the type of breach. The use of both enforcement routes underlines the seriousness with which these obligations are treated.

Conclusion

Ministerial Resolution No. 16 of 2025 introduces a modernised regime for workplace first aid in Bahrain. By repealing a framework dating from 1976, it establishes clear obligations on employers through the appointment of trained personnel, the provision and maintenance of properly equipped first aid kits, the preparation of emergency response plans, and a general duty to ensure workplace medical readiness.

For employers, this means new compliance measures, investment in training, and the establishment of monitoring systems. For employees, it provides greater confidence that workplaces are prepared to respond effectively to emergencies. The Resolution therefore strengthens Bahrain’s occupational health and safety standards and brings them into line with prevailing international practice.

 

Legal Update: Amendments to the Penal Code

Law No. 3 of 2025 Amending Decree Law No. 15 of 1976

Law No. 3 of 2025 (the “Amendment”) introduces changes to Decree Law No.15 of 1976 (the “Penal Code”), as amended. The provisions of the Penal Code will be amended with immediate effect through the Shura Council and the House of Representatives. The amendment aims to criminalize theft or misuse of electronic devices used for communication or data storage. Moreover, it imposes a minimum one-year prison sentence if such devices are stolen to access information or images. It also sets penalties of up to two years imprisonment or fines for related offenses involving these devices.

The law introduces explicit penalties for seizing electronic devices with the intent of obtaining data, or information. This includes devices capable of high-speed processing and communication.

Key Amendments to Existing Provisions

Definition of Tools/Devices – Article 380 (12)

The definition of tools and devices has been expanded to include mobile phones, laptops, tablets, and other electronic, magnetic, optical, or electrochemical devices that can store, send, or process data.

Minimum Penalty – Article 380

A minimum penalty has been introduced, it is a one-year imprisonment if any such devices are stolen with the intent of obtaining information, data, or images.

Further Amendments – Article 396

A penalty of up to two years’ imprisonment or a fine not exceeding BHD 500 applies if the crime involves certain electronic devices. If the intent is to obtain information, data, or images, the penalty may be both imprisonment and a fine, or one of the two.

Newly Introduced Provisions

The Amendment introduces explicit penalties for seizing electronic devices such as mobile phones, tablets, and laptops with the intent of obtaining images, data, or information. These provisions apply to modern devices capable of high-speed communication and processing, reinforcing the Penal Code’s relevance to evolving technology.

Implementation Timeline

The Amendment, approved by the Shura Council and the House of Representatives, introduces immediate changes to the Penal Code.

For further guidance on aligning with the amended provisions of the Penal Code, please contact our Litigation Team.

Legal Update: Amendments to the Law of Commerce

Law No. 23 of 2025 Amending Decree Law No. 7 of 1987

Law No. 23 of 2025 (the “Amendment”) introduces significant changes to Decree Law No. 7 of 1987, Law of Commerce, with immediate effect. The amendments aim to modernise cheque-related provisions, enhance protections around joint accounts, and update the obligations of banks in line with commercial and banking practices.

This article summarises the key amendments and newly introduced provisions.

Key Amendments to Existing Provisions

The amended provisions reflect a conscious effort to update the Law of Commerce by addressing issues that have caused uncertainty in practice. From clarifying how joint accounts are handled to reinforcing the legal weight of cheques, the changes are intended to bring greater clarity and alignment with how business and banking actually operate today in Bahrain. They also respond to the growing need for legal frameworks that support trust and transparency in everyday financial dealings.

Joint Accounts – Article 283(4)
Upon the death or legal incapacity of a joint account holder, the remaining holders must notify the bank within ten (10) days if they intend to continue operating the account. The bank is required to suspend withdrawals relating to the affected person’s share until a legal successor is appointed.

Bills of Exchange – Article 410(1)
The amendments clarify that if a bill of exchange is not honoured on its due date, the holder may pursue recourse against the drawer, endorsers, and all other liable parties.

Cheque Certification – Articles 451(2), (3), and (4)

• 451(2): The drawee may certify a cheque, in whole or in part, confirming the availability of sufficient funds. The drawee’s signature on the face of the cheque is deemed certification.
• 451(3): The drawee may not refuse to certify the cheque if sufficient funds are available and the request is made by the drawer or bearer.
• 451(4): Once certified, the funds must remain frozen with the drawee and held under its responsibility until the end of the cheque’s presentation period.

Objections to Cheques – Article 474(2)
If an objection is raised against a cheque, the bank must suspend payment (in full or in part) and retain the corresponding amount until the matter is resolved.

Proof of Non-Payment – Article 480(1)
The cheque holder may seek recourse if the cheque is presented within the legal timeframe and is not fully paid, provided non-payment is proven through:
a) A statement from the drawee noting the date of presentation; or
b) A dated and signed statement on the cheque from a clearing house confirming non-payment within the legal period.

Timing of Proof of Non-Payment – Article 482
Non-payment or partial payment must be evidenced in the manner set out under Article 480(1) before the expiry of the presentation period. If the cheque is presented on the final day, proof may be established on the next business day.

Blank Cheques – Article 491

• 491(1): The Amendment expressly prohibits the use of blank cheques as instruments of credit or guarantee.
• 491(2): The Consumer Protection Directorate in accordance with Law No. 35 of 2012, and the Central Bank of Bahrain (CBB), pursuant to Law No. 64 of 2006, must take necessary measures to implement and enforce this prohibition.

Newly Introduced Provisions

The introduction of partial cheque payments marks a practical shift toward flexibility in commercial transactions. It allows businesses to recover at least part of the funds owed to them rather than facing complete nonpayment. This change can help ease cash flow pressures, reduce disputes, and keep transactions moving even when liquidity is tight.

Partial Cheque Payments – Article 465 bis

1. If the account balance is insufficient to cover the full amount of a cheque, the drawee must pay the available amount unless the cheque holder refuses partial payment.
2. The holder may re-present a partially paid cheque.
3. The drawee must record partial payments on the cheque and issue a certificate to the holder.
   The CBB may prescribe alternative mechanisms for documenting partial payments.
4. The CBB shall issue regulations governing the terms, procedures, and payment methods applicable to partial cheque payments, whether by cash, account entry, transfer, clearing, or other approved means.
5. Cheques returned due to insufficient funds or partially paid cheques must be recorded on the drawer’s credit history in accordance with rules to be issued by the CBB.

Enforceability of Cheques – Article 465 bis (1)
A cheque marked by the drawee as unpaid due to insufficient funds, or as partially paid, shall constitute an executive instrument enforceable under Decree Law No. 22 of 2021, Enforcement Law in Civil and Commercial Matters.
The Minister of Justice, with the approval of the Supreme Judicial Council, may issue regulations governing enforcement procedures for such cheques.

Penalties for Misuse of Blank Cheques – Article 491 bis

• Violation of Article 491(1) is punishable by a fine of no less than BHD 200 and no more than BHD 2,000.
• A person who fills in the details of a blank cheque and presents it for payment is liable to a fine of no less than 10% and no more than twice the value of the cheque, provided that the fine is not less than BHD 500 and not more than BHD 10,000 in all cases.

Implementation Timeline

The partial payment system will be introduced in phases. The CBB will coordinate with relevant stakeholders to ensure that banks are technically prepared before full implementation.

For further guidance on aligning with the amended Law of Commerce, please contact our Corporate team.

 

Draft Law Enhancing Bahrainisation Under Review

The Council of Representatives is currently reviewing a draft law that could significantly impact private-sector employment practices. The proposed legislation aims to impose a 30% cap on the number of foreign nationals permitted to work in private-sector commercial establishments. Employers who breach this requirement could face fines of up to 20% of a foreign worker’s salary or other administrative penalties. Although the specific details of the legislation are still under discussion, it is expected that the 30% cap may be gradually increased over time.

The Labour Market Regulatory Authority (LMRA) is anticipated to implement parallel measures to restrict the issuance of work permits for foreign workers within designated timeframes.

In Bahrain, the legislative process comprises several stages. Once the draft law has been reviewed and approved by the Council of Representatives, the Shura Council, and potentially the National Assembly, it will be sent to the King for final endorsement. This process may take several months, giving employers a limited timeframe to evaluate the potential impact of the reforms on their recruitment strategies and workforce planning.

Businesses are encouraged to closely monitor the progress of these legislative changes and proactively assess their hiring practices to ensure future compliance. Early planning will be critical in adapting to the evolving regulatory landscape.

The proposed reforms align with Bahrain’s broader Bahrainisation strategy, which seeks to increase local employment in the private sector. As part of its Vision 2030 goals, the government aims to employ 20,000 Bahraini nationals in private-sector roles and train at least 10,000 Bahrainis by the end of 2024. These initiatives reflect the government’s commitment to enhancing workforce localisation while reducing reliance on expatriate labour.

The draft law capping foreign workers in the private sector represents a significant shift in the country’s employment policies. By encouraging greater participation of Bahraini nationals in the workforce, the proposed reforms aim to drive sustainable economic growth and social inclusion. While the legislative process is ongoing, businesses should remain vigilant, reassess their recruitment strategies, and take proactive measures to ensure alignment with future requirements.

 

New Amendments to Commercial Registry Law

Ministry of Industry and Commerce (MOIC) has implemented two new Ministerial Orders under the amended Commercial Registry Law No. 27 of 2015 (the “Commercial Registry Law”), aiming to streamline registration, licensing, and reinstatement processes for businesses. These updates simplify delegation requirements, introduce flexible renewal options, and reduce the financial impact of delayed registrations.

The recent amendments are presented in two orders, each addressing specific aspects of the Commercial Registry framework:

– Ministerial Order No. 62 of 2024: This order revises the Implementing Regulations of the Commercial Registry Law, initially set out in 2016 and amended in 2018. It introduces simplified requirements for authorizing representatives in registration submissions and allows annual renewal options for activities requiring longer approval timelines, such as factories and hospitals.

– Ministerial Order No. 63 of 2024: This order revises the financial penalties for delays in renewing commercial registrations, with a newly structured penalty system and a cap to limit financial liability.

Under the amended Article 6, Paragraph 2, registered entities can now delegate registration submissions more easily. Instead of requiring an official power of attorney, recognized professional bodies and employees of the registrant can submit authorizations using a standard form. This adjustment is expected to reduce administrative burdens, streamline processing, and lower associated costs.

To encourage timely compliance, Article 10 mandates that registrants obtain necessary licenses within one year of registration or face automatic deletion. Notifications for such deletions will be issued via the Ministry’s online portal. However, for industries with inherently longer approval timelines—such as manufacturing and healthcare—annual renewal is now possible if valid reasons and fees are submitted.

Ministerial Order No. 63 of 2024 introduces a revised penalty structure for delays in renewing registrations. This structure not only encourages timely compliance but also caps total penalties to reduce financial strain on businesses. The new fee system is as follows:

• First Year of Delay: BHD 10 per month
• Second Year of Delay: BHD 20 per month
• Third Year of Delay: BHD 30 per month
• Beyond Three Years: BHD 500 per year, with a maximum total cap of BHD 5,000

The cap on financial penalties is particularly beneficial for businesses facing prolonged delays, as it reduces the risk of significant cumulative fees.

Effective as of October 17, 2024, these amendments reflect Bahrain’s commitment to modernizing and adapting its commercial regulatory framework. By streamlining delegation requirements, offering annual renewals for complex registrations, and capping penalty fees, these new orders provide businesses with greater flexibility and clarity in managing their commercial registrations.

New Regulatory Framework for Authorized Distributors

The Ministry of Industry and Commerce (“MOIC”) has implemented significant regulatory changes under Ministerial Order No. 29 of 2024, which establishes new conditions for authorized distributors of trademarked products and services. This order introduces a more formal framework for distribution agreements, focusing on increasing transparency, legal protections, and market structure in Bahrain’s distribution sector.

The new regulation defines who can act as an authorized distributor. Only Bahraini-owned businesses, with at least 51% of local ownership, are eligible to apply. This rule ensures that distribution activities largely benefit Bahrain-based entities. However, there is room for flexibility, as MOIC may approve exceptions for businesses that do not meet the ownership threshold. These exceptions are likely to be evaluated on an induvial case basis.

A critical aspect of the new order is its provision allowing trademark owners to appoint more than one authorized distributor. This can help multinational brands establish a broader market presence in Bahrain, as multiple distributors can simultaneously promote and sell the same trademarked goods, increasing competition and availability.

The distinction between authorized distributors and commercial agents is another key point under the new regulation. Distributors operate more narrowly, focusing on product sales and distribution, while agents typically have a broader scope, often involving negotiations, brand representation, and customer support services. Agents may also work under profit-sharing or commission models, and they are governed by the Commercial Agencies Law, whereas authorized distributors fall under the Commercial Registry Law. This distinction is essential for businesses when deciding how to structure their relationships with third parties.

To ensure compliance with the order, all distributors are required to formalize their distribution agreements with trademark owners by October 18, 2024. This includes updating their commercial registration to reflect the new designation of “Authorized Distributor” under ISIC No. 4699. Additionally, these agreements must be registered with the MOIC’s Authorized Distributor Registry via the Sijilat platform. Failure to comply could result in legal penalties or loss of distribution rights, as this framework aims to regulate the market more effectively and provide legal certainty for both distributors and trademark owners.

Q&A: Competition 2024 – Bahrain

1. What is the name of the main regulator/ regulators governing competition in Bahrain?

The Promotion and Protection of Competition Law No. 31 of 2018 (the “Competition Law”) states that a public authority for the promotion and protection of competition in Bahrain must be established (the “Authority”). The Authority shall have juridical personality with financial and administrative independence and is subject to the oversight of the Minister of Industry and Commerce.

As of today, the Authority is yet to be formed. Therefore, the Consumer Protection Directorate of the Ministry of Industry and Commerce is currently acting in its place until the Authority is formed.

2. What is market concentration under the Competition Law?

Market concentration occurs when there is a shift in the market that is attributed to several undertakings made by a company. The circumstances where market concentration is established are any (i) mergers, whether fully or partially, of two or more previously independent companies, (ii) acquisitions which leads to direct or indirect control of another company, whether fully or partially, or (iii) the establishment of a joint venture that undertakes all duties of a single independent company. In relation to acquisitions that establish market concentration, such transactions may be taken between companies, or an individual and a company.

3. What is a dominant market position under the Competition Law?

Companies may be deemed to have a dominant position in the market position due to their economic presence and strength, whereby such dominance may enable the company to prevent effective competition. Abuse of its position in the market may directly or indirectly hinder the other players in the market, such as competitors and even consumers. Therefore, the Competition Law regulates companies who have dominant positions in the market and sets out prohibitions to ensure fair competition.

4. What are the prohibitions under the Competition Law?

A company with a dominant position in the market cannot act or refrain from acting in a manner that constitutes an abuse of its dominant position. The following actions or inactions taken individually by the company or collectively with other companies are prohibited under the Competition Law:

1. 1. to directly or indirectly impose selling or purchasing prices, or any other trade conditions;
   2. to limit, production, markets, or technical development, to an extent that is detrimental to consumers;
   3. to apply dissimilar conditions with respect to prices, quality of products, and other terms of business, in any type of contracts and agreements concluded with consumers or suppliers of equivalent legal positions;
   4. to conclude contracts relating to certain products that are subject to the acceptance of obligations which, by nature or commercial usage, have no link to the subject of the original contract, agreement, or transaction; or
   5. to refrain, with no legitimate reasoning, from (i) concluding purchase or sale contracts of any products with any company, (ii) selling of products at a price lower than its actual cost, or (iii) to completely suspend a transaction to eliminate competing companies from continuing their business.