Overview of Cloud Computing: Data Embassies and Jurisdiction

Overview of Cloud Computing: Data Embassies and Jurisdiction

The rapid adoption of cloud computing is fundamentally altering the management of data and resources. Cloud computing is empowering infrastructures of business operations, expanding their potential to grow without the usual costs or risks.

What is Cloud Computing?

Simply put, cloud computing grants a faster and more flexible method for individuals, businesses or the government to store and access data from anywhere at any time, as long as the internet is accessible. Files usually stored on hard drives can be saved on the cloud, ensuring quick and easy access to any file with enhanced security measures.

The delivery of computing services over the internet is not only constricted to data storage; networking, computing power, computer system resources and other technological benefits are additional rewards of cloud computing services. The overall aim is to ease the flow of information, ensuring on-demand access, business continuity and scalability.

How is Cloud Computing Regulated in Bahrain?

Cloud computing is regulated for the public and private sectors in Bahrain. The Cloud-First Policy provides a framework for the adoption of cloud technology for the public sector and various laws regulate cloud computing in the private sector, directly and indirectly, such as the Cloud Computing Services to Foreign Parties Law No. 56 of 2018 (the “Cloud Computing Law”) and the Personal Data Protection Law No. 30 of 2018.

(For more information regarding the Cloud-First Policy, please refer to a previously written article by Zu’bi & Partners linked here).

This article will provide an overview of the Cloud Computing Law as it relates to data embassies, governing laws and the jurisdiction of data.

What is a Data Embassy?

Hosting servers and storing data outside the physical space of an entity may lead to jurisdiction issues, specifically when considering cross-border cloud computing services that are located in a different country to the customer.

The concept of data embassies was initially established by the government of Estonia which underwent a series of cyberattacks rendering various public authorities and banks inoperable. Subsequent to the cyberattacks, a bilateral agreement was signed between Estonia and Luxembourg to establish Estonia’s data center in Luxembourg, deeming the country the first data embassy location internationally. As such, Estonian data is stored physically through cloud computing in Luxembourg, and yet the law and jurisdiction of the data remain governed by Estonia, similar to how foreign embassies work.


The Cloud Computing Law

The Kingdom of Bahrain took a step further and regulated cloud computing and data embassies for the private sector through the Cloud Computing Law, the purpose of which is to encourage foreign parties to use and invest in cloud computing services of data centers located in Bahrain.

Similar to the data embassy in Luxembourg, customers to cloud computing service providers (“Service Providers”) in Bahrain are subject to the governing law and exclusive jurisdiction of the country in which the customer is (i) domiciled, (ii) constituted, or (iii) established (“Foreign Country”). Thus, the competent courts and public authorities of the Foreign Country will have the power to issue binding orders executable on Service Providers in Bahrain. The legislation obliges the Service Providers to inform the Attorney General of Bahrain if an order is issued against the Service Provider from a competent court or public authority in a Foreign Country.

Resolution No. 67 of 2021, as amended, specifies the Foreign Countries that are included in the provisions of the Cloud Computing Law. These countries include, but are not limited to, the United States of America, the United Arab Emirates, the Kingdom of Spain, the Federative Republic of Brazil and others.

Cloud computing technologies are developing at an accelerated pace, providing enhanced cybersecurity, on-demand accessibility and economies of scale. The simultaneous growth of legislation we are witnessing today is crucial to avoid disputes, mitigate risk and protect the rights of all parties involved.

Inheritance Law in Bahrain

Inheritance Law in Bahrain: An Overview

Inheritance law in Bahrain is a crucial aspect of the nation’s legal framework, intricately tied to its cultural, religious, and social values. The laws governing inheritance are primarily based on Islamic Sharia, which significantly influences the distribution of assets upon an individual’s death. This article provides a detailed exploration of Bahrain’s inheritance law, its key principles, and its practical implications.

Islamic Foundation of Inheritance Law

Bahrain, like many other countries in the Gulf Cooperation Council (GCC), derives its inheritance laws from Islamic Sharia. The fundamental principles of Sharia regarding inheritance are aimed at ensuring a fair distribution of the deceased’s estate among heirs, preventing disputes, and protecting the rights of vulnerable family members.

Key Principles of Inheritance Under Sharia

  1. Fixed Shares: Under Islamic law, certain relatives are entitled to fixed shares of the deceased’s estate. These shares are predetermined and cannot be altered by a will. The primary beneficiaries typically include spouses, parents, and children. For instance, a wife is entitled to one-eighth of her deceased husband’s estate if they have children, and one-fourth if they do not. Conversely, a husband receives one-fourth of his deceased wife’s estate if they have children, and one-half if they do not.
  2. Male and Female Heirs: Islamic inheritance law prescribes that male heirs generally receive twice the share of female heirs. This principle is based on the traditional role of men as financial providers in Islamic societies. For example, a son would inherit twice as much as a daughter.
  3. Residue Distribution: After the fixed shares are allocated, the remaining estate (if any) is distributed among the residuary heirs (Asabat). These are typically the closest male relatives, such as sons, brothers, and uncles. Daughters and other female relatives may inherit from the residue if there are no male residuary heirs.
  4. Exclusion and Inclusion Rules: Certain relatives can exclude others from inheriting. For instance, if the deceased has sons, their brothers (the deceased’s uncles) are typically excluded from inheritance.

Bahraini Civil Law and Inheritance

While Sharia forms the backbone of inheritance law in Bahrain, the Bahraini Civil Code also plays a significant role, especially in cases involving non-Muslims and expatriates.

  1. Wills and Testaments: Bahraini law permits individuals to draft wills, but these wills must comply with Sharia principles if the deceased is Muslim. For non-Muslims, the Bahraini Civil Code allows more flexibility in drafting wills, enabling them to distribute their assets according to their personal wishes, provided they comply with local laws.
  2. Inheritance for Non-Muslims: Non-Muslims residing in Bahrain can apply their home country’s inheritance laws to their estates. This provision ensures that expatriates can maintain their cultural and legal practices concerning inheritance.
  3. Court Procedures: The Sharia courts handle inheritance cases for Muslims, ensuring that the distribution aligns with Islamic principles. For non-Muslims, civil courts oversee the process, applying the relevant laws based on the deceased’s nationality and personal law preferences.

Practical Implications and Challenges

  1. Dispute Resolution: Inheritance disputes can arise due to misunderstandings of Sharia principles or disagreements among heirs. Bahrain’s legal system provides mechanisms for dispute resolution through both Sharia and civil courts, ensuring fair adjudication based on established legal principles.
  2. Estate Planning: Effective estate planning is essential to ensure a smooth transition of assets and to minimize potential disputes. For Muslims, this involves understanding Sharia principles and potentially drafting a will within those constraints.


Recent Developments and Future Outlook

Bahrain continually seeks to modernize its legal framework to balance traditional values with contemporary needs. Recent legal reforms aim to streamline inheritance procedures, enhance transparency, and reduce litigation. These efforts reflect Bahrain’s commitment to maintaining a robust legal system that respects Islamic principles while accommodating the diverse needs of its population.

  1. Digitalization of Legal Processes: Bahrain is investing in the digitalization of its legal processes, including inheritance procedures. This modernization aims to improve efficiency, reduce bureaucratic delays, and enhance access to legal resources for citizens and residents.
  2. Public Awareness Initiatives: The Bahraini government and legal institutions are increasingly focusing on public awareness initiatives. These initiatives aim to educate citizens and expatriates about their rights and obligations under inheritance laws, promoting better estate planning and reducing potential conflicts.


Inheritance law in Bahrain is a complex but well-structured system rooted in Islamic Sharia and complemented by the Bahraini Civil Code. Understanding these laws is crucial for both Bahraini citizens and expatriates to ensure the fair and legal distribution of assets upon death. As Bahrain continues to evolve its legal framework, the balance between tradition and modernity remains a cornerstone, ensuring that the principles of justice and fairness prevail in the realm of inheritance.

Identifying the Ultimate Beneficial Owner

Identifying the Ultimate Beneficial Owner

Ministerial Order No. 83 of 2020 (“Ministerial Order”) requires all commercial entities in Bahrain to disclose their Ultimate Beneficial Owner (UBO) information, except those licensed by the Central Bank of Bahrain. This measure aims to strengthen market transparency and safeguard the interests of Bahrain’s consumers, shareholders, partners, and investors.

By requiring the disclosure of UBO information, the government aims to prevent the misuse of corporate structures for illicit activities and uphold Bahrain’s reputation on the international stage, particularly in combating financial crimes and money laundering.

This article provides a brief overview of the Ministerial Order, which aims to ensure adherence to Financial Action Task Force (FATF) standards.

Definition of UBO

The natural person(s) who ultimately owns or controls a registered person and/or the natural person(s) on whose behalf a transaction is being conducted. It also includes those person(s) who exercise ultimate effective control over a legal person or arrangement.

Most prominent conditions

  • Owning or controlling, directly or indirectly, a percentage equal to or exceeding 10% of the capital or voting rights of the registered person.
  • Where the registered person is a legal person owned by another legal person or legal arrangement, then the UBO is the natural person who is the ultimate owner of the ownership chain or who exercises effective control over it. Natural person(s) who may exercise control through management positions within the registered person in such a way that affects the strategic decisions or influences the general direction of the registered person.

Responsibilities of the Holder of Controlling Interests

The Ministerial Order mandates that holders of controlling interests submit an electronic statement specifying information about the UBO of their interest in the registered person. This submission is required during the registration request or within three working days of any amendments to their interest. The statement should include details such as the UBO’s full name, passport number, identity card number, copies of valid identification documents, tax residency jurisdiction, Tax Identification Numbers, and contact details.

Responsibilities of the Registered Persons to Provide and Update Details of the UBO

Registered persons must provide any other details related to the UBO as the concerned directorate requires. This responsibility ensures that the information regarding UBOs remains accurate and up to date within the commercial register.

Procedures for Violations of the Ministerial Order regarding UBO Disclosure

In the event of non-compliance, the Ministry of Industry and Commerce possesses the authority to implement various measures. These include suspending CR, with the most severe repercussion being the removal of the entity from the commercial register, effectively terminating its commercial activities in Bahrain. The Ministry of Industry and Commerce may impose administrative fines, with the possibility of additional fines in severe or recurrent instances of non-compliance.

In conclusion, the Ministerial Order signifies a paradigm shift in Bahrain’s commercial landscape. By mandating the disclosure of UBO information, the government underscores its commitment to transparency, integrity and international best practices.

Recruitment Obligations in Bahrain

Recruitment Obligations in Bahrain


Embarking on the recruitment process in Bahrain involves meticulous attention to legal obligations spanning various stages, from drafting employment contracts to ensuring compliance with social security regulations. This guide outlines the detailed steps and obligations incumbent upon employers, providing clarity on essential aspects such as contract formatting, employee registration procedures, social security enrollment, and work permit requirements for expatriates. By understanding and adhering to these obligations, employers can navigate the recruitment landscape with confidence, fostering a compliant and transparent employment environment conducive to sustainable business growth.

 Recruitment Steps and Detailed Obligations:

  1. Employment Contract: An agreement between an employer and a worker whereby the worker undertakes to perform the duties of a particular job for the employer under his management or supervision in consideration of a wage. A contract shall be deemed to be for a definite term if it is entered into for a fixed period or for performing a specified job.
    • Format: The contract must be in writing and provided in Arabic. If using another language, an official Arabic translation must accompany it.
    • Content: The contract should clearly outline the following details:
      • Parties: Identify both the employer and employee with their full names and contact information.
      • Job Details: Clearly define the job title, duties, responsibilities, and reporting structure.
      • Work Location: Specify the primary work location and any potential travel requirements.
      • Compensation and Benefits: Outline the base salary, allowances, bonuses, overtime pay (if applicable), paid leave entitlements, and any other benefits offered.
      • Working Hours: Specify the regular working hours, including breaks and any potential overtime arrangements.
      • Termination: Outline the terms for termination, including notice periods, severance pay (if applicable), and consequences of breach of contract.
  1. Employee Registration:
    • Labour Market Regulatory Authority (LMRA): Register all employees with the LMRA. This is a mandatory step for all workers, both Bahraini and expatriate. The LMRA website offers online registration facilities.
    • Business Registration Certificate: Ensure you have a valid business registration certificate before registering employees.

  2. Social Security:
    • Enrolment: Enrol all employees with the Pension Authority and Social Insurance Organization (SIO). This ensures they receive social security benefits.
    • Contributions: As an employer, you are required to make regular contributions to the SIO on behalf of your employees. The specific contribution rates are outlined in the SIO regulations.

  3. Work Permits (Expatriates):
    • Requirement: If you plan to hire foreign workers, you must obtain a work permit for each one from the LMRA.
    • Process: The work permit application process involves submitting specific documents to the LMRA, including the employment contract, educational qualifications, and proof of health insurance. The LMRA website provides detailed information on the required documents and procedures.

Additional Considerations:

  • Job Advertising: While there are no specific legal requirements regarding advertising job vacancies, it is good practice to advertise positions fairly and avoid any discriminatory language.
  • Pre-Employment Screening: Background checks and reference checks are generally permissible, but ensure you obtain the candidate’s consent beforehand. Be mindful of privacy regulations when conducting such checks.
  • Onboarding: Develop a comprehensive onboarding process to familiarize new hires with the company culture, policies, and procedures.

Civil Service Law and Recruitment Obligations: In the realm of public sector employment, the Civil Service Law, governed by Legislative Decree No. 48 of 2010, delineates recruitment procedures and employee rights within government entities. Article 3 defines the civil service and outlines its scope, encompassing ministries, government agencies, and public institutions. Recruitment in the civil service sector is guided by principles of transparency, impartiality, and efficiency, as enshrined in Article 4.

Article 12 of the Civil Service Law outlines the recruitment process for civil service positions, emphasizing the importance of public advertisement of vacancies and selection based on merit, qualifications, and competency assessments. This merit-based approach seeks to attract talented individuals, enhance organizational performance, and foster public trust in governmental institutions. By upholding transparent recruitment practices, government entities can promote accountability and integrity in their workforce management.


In conclusion, navigating the intricate terrain of recruitment obligations in Bahrain demands diligence, thoroughness, and a commitment to legal compliance. By adhering to the outlined steps and obligations, employers can not only ensure the legality of their hiring practices but also foster a workplace environment characterized by transparency, fairness, and respect for employee rights. Embracing these principles not only mitigates legal risks but also enhances employer reputation, attracts top talent, and ultimately contributes to the long-term success and sustainability of businesses operating in Bahrain. As employers strive to meet their recruitment obligations, they play a pivotal role in shaping a thriving and inclusive employment landscape in the Kingdom.


Bahrain International Commercial Court: Transnational System of Commercial Justice

Bahrain International Commercial Court: Transnational System of Commercial Justice

On 20 March 2024, a judicial milestone was taken by the Kingdom of Bahrain where a bilateral treaty was signed with the Republic of Singapore (the “Treaty”). Preceding the signing of the Treaty, two memoranda were signed by the judiciaries of Bahrain and Singapore in May 2023, namely the Memorandum of Understanding on Cooperation and Memorandum of Guidance regarding the Enforcement of Money Judgements.

The Treaty is the first of its kind in the Middle East and was signed during a virtual meeting between the Minister of Justice, Islamic Affairs and Endowments, H.E. Nawaf bin Mohamed Al Maawda and the Minister of Home Affairs and Minister of Law of Singapore, Mr. Kasiviswanathan Shanmugam.

This article will briefly outline the essence of the Treaty, highlighting its significance and its foreseeable impact in the development of the Bahrain judiciary.

What Does the Treaty Establish?

Bahrain International Commercial Court

Through the cooperation of Bahrain and Singapore, the Treaty aims to establish a Bahrain International Commercial Court (“BICC”). The BICC will be based on the Singapore International Commercial Court (“SICC”) model which will be adopted to settle disputes regionally and internationally.

The judicial model adopted by the SICC is renowned as a trusted and neutral forum that ensures efficiency and effectiveness in settling international commercial disputes. Since its launch in 2015, the SICC formed a diverse panel of international and local judges in both civil and common law traditions. In brief, the SICC combines international arbitration’s best practices with the principles of international commercial law, creating a so-called “arbitration in litigation”. This model aims to keep up with the fast-paced developments of international commerce and offer practical and compatible procedures with the demands of cross-border commercial markets.

The BICC is forecasted to hear international arbitration related disputes in the near future with relatively minor adjustments as Bahrain is a bilingual jurisdiction where cases are heard before appointed international judges in English at the highest level of court (the Court of Cassation). In addition, English language litigation is implemented by the Bahrain Chamber for Dispute Resolution for specified cases pursuant to Resolution No. 28 of 2023, where disputes are settled without the need for English translations or the appointment of translators.

Designated Body for Appeals

Furthermore, the Treaty stipulates that cases heard before the BICC may be appealed, where such cases will be heard before a designated body in Singapore. The hearing of appeals by the SICC from the BICC aims to aid in providing the disputed parties a transnational dispute resolution route leading to the growth of international trade and overall development of judicial systems.

What is the Significance of the Treaty?

The establishment of the BICC and a designated body for appeals is forecasted to create a positive wave of change in the judicial system, catalyzing opportunities for growth and expansion. Hatim Q. Zu’bi, Managing Director of Zu’bi & Partners Attorneys & Legal Associates, commented on the Treaty and its vital role in Bahrain (for the commentary, kindly refer to the Al-Watan Newspaper publication linked here).

The Treaty embodies a balance between party autonomy and simultaneously ensures the adherence to public policy, and we are of the view that its implementation will lead to transformative opportunities on a regional and international level, such as:

  1.  the promotion of international rule of law, fostering the principles of, among other things, supremacy of the law, equality before the law and accountability to the law;
  2. The boosting of international trade and development of dispute resolution in international commerce;
  3. The protection of the rights and interests of the international business community, thus encouraging the commercial market to thrive;
  4. The reduction and resolution of current difficulties faced in international dispute resolution; and the development and supplementation of commercial jurisprudence.

Overall, the cooperation between the BICC and the SICC will pave the way to enhancing the standards of international commercial dispute resolution, building on current mechanisms and encouraging the prosperity of transnational commercial justice.

Navigating Share Transfers: A Legal Perspective on WLLs and BSC(c)

Navigating Share Transfers: A Legal Perspective on WLLs and BSC(c)

Understanding the intricacies of share transfers is essential for companies considering adjustments to their share structure. Whether introducing a new shareholder or altering the distribution of shares among existing shareholders, the share transfer process involves relocating existing shares rather than issuing new ones. This is a common method used to bring in new strategic business partners. The regulations governing share capital transfer are primarily outlined in Legislative Decree No. 21 of 2001, known as the Commercial Companies Law, as amended from time to time (“CCL”).

This article will discuss the process of share transfers for Limited Liability Companies (“WLL”) and Bahrain Shareholding Companies (Closed) (“BSC(c)”) from a Bahraini legal perspective. For a detailed explanation of the differences between these two types of companies, please refer to this article explaining the various types of businesses.

In principle, shares can be freely transferred over time unless the company’s constitutional documents explicitly state otherwise. Shareholders of WLLs and BSC(c) companies often seek to manage the admission of new shareholders, particularly if this could significantly influence company management or control. It is customary for such companies to impose certain restrictions on shareholders’ rights to transfer their shares. These transfer restrictions, which can include the right of refusal by directors and pre-emption rights, are stated in the company’s constitutional documents and/or shareholders’ agreement. If there are any restrictions in the constitutional documents, this might impede the intended transfer. Assuming there are restrictions, these restrictions can be waived or disapplied through unanimous agreement or a validly passed resolution.

In summary, understanding the process of share transfers in Bahrain is important for companies seeking to adjust their share structure effectively. Businesses can strategically manage new shareholder admissions while retaining operational control by understanding the legal regulations and navigating specific requirements for WLLs and BSC(c) entities. While this article offers a concise overview of share transfer procedures, consulting a lawyer is advisable for best practice.


Please do not hesitate to reach out if you need assistance navigating the share transfer process. Our dedicated team members are ready to provide support tailored to your needs.

المرأة في قانون العمل البحريني


المرأة في قانون العمل البحريني

انطلاقاً من حرص مملكة البحرين على اعلاء حقوق الانسان وحظر التمييز القائم على كافة المستويات ومنها التمييز على أساس الجنس فإن وضع المرأة في أي مجتمع يعد معياراً أساسياً يعكس درجة تقدمه ومدى تفاعله مع معطيات العصر الحديث بكل ما يحمله من قيم الديمقراطية واحترام المواطنة ودعم قضايا حقوق الإنسان.   جاء ميثاق العمل الوطني ودستور المملكة المعدل لعام 2002 ليؤكد مشروعية حقوق المرأة البحرينية، حيث أنّ التعديلات التي أدخلت على الدستور الصادر في عام 1973، على أهمية تحقيق مبدأ المساواة بين جميع المواطنين دون أي تمييز بينهم في الحقوق والواجبات بسبب الجنس، أو الأصل أو اللغة أو الدين أو العقيدة، الأمر الذي أسهم في دعم دور المرأة وتعزيز مكانتها في المجتمع البحريني.

وتماشياً مع هذه التعديلات، فقد انعكس هذا المفهوم على حقوق المرأة في قانون العمل البحريني، في القطاع الأهلي الصادر بالمرسوم بقانون رقم (36) لسنة 2012 على تمتع المرأة بكافة الحقوق في مجال العمل أسوةً بالرجل، إذْ أورد تعريف العامل بأنه: (كل شخص طبيعي يعمل لقاء اجر لدى صاحب عمل وتحت إدارته أواشرافه).

وبالرغم من حرص الدستور وقانون العمل على مساواة المرأة بالرجل في مجال العمل سواء في الحقوق او الواجبات إلا أنّه خص المرأة ببعض الاحكام الخاصة التي تتوافق مع طبيعتها ودورها الرئيسي الذي تؤديه في المجتمع والاسرة بهدف توفير المزيد من الحماية لها.  فقد أورد المشرع في قانون العمل جملة من التعديلات التي وسعت من نطاق الحقوق والضمانات الممنوحة للمرأة ونذكر منها:

         منح المرأة العاملة إجازة وضع مدفوعة الاجر بمقدار 60 يوم بالإضافة الى 15 يوم بدون اجر (المادة 32/أ).

         منح المرأة العاملة فترتي رعاية للطفل لا تقل كل منهما عن ساعة واحدة (أي بمجموع ساعتين) حتى يبلغ الطفل من العمر ستة أشهر، وفترتي رعاية لا تقل كل منهما عن نصف ساعة حتى يبلغ الطفل عامه الأول مع جواز ضم الفترتين (المادة 35).

         حظر فصل العاملة او انهاء عقد عملها بسبب الزواج او اثناء إجازة الوضع (المادة 33).

          تشديد العقوبة المقررة على مخالفة الاحكام والقرارات الخاصة بتشغيل النساء لتصبح الغرامة لا تقل عن مائتي دينار ولا تتجاوز خمسمائة دينار (المادة 187) .

إضافة الى ذلك فقد استحدث القانون ضمانات وحقوق أخرى للمرأة نذكر منها :

         حظر تشغيل العاملة خلال الأيام الأربعين التالية للوضع (المادة 32/ب).

         حق العاملة في الحصول على إجازة بدون اجر بحد اقصى ستة أشهر في المرة الواحدة وثلاث مرات طوال مدة خدمتها لرعاية طفلها الذي لم يتجاوز من العمر الست سنوات (المادة 34).

         حق المرأة العاملة في الحصول على إجازة عدة الوفاة مدتها شهر مدفوعة الاجر ويحق لها استكمالها لمدة ثلاثة أشهر وعشرة أيام من رصيد اجازاتها السنوية فإن لم يكن لها رصيد فلها الحصول على اجازة بدون أجر (المادة 63/ج).

         اعتبار فصل العاملة او انهاء عقد عملها بسبب الزواج او اثناء إجازة الوضع فصلاً تعسفياً (المادة 104).

ايضاً كذلك فقد جاء المرسوم بقانون رقم (16) لسنة 2021 بتعديل بعض احكام قانون العمل في القطاع الأهلي بإضافة فقرة ثانية الى المادة (39) لغايات حظر التمييز في الاجور بين العمال والعاملات في العمل ذي القيمة المتساوية.

كما ألغى المرسوم بقانون السابق المادتان (30) و (31) من قانون العمل والتي كانتا تتضمنان إصدار قرار بتحديد الأحوال والاعمال والمناسبات التي لا يجوز فيها تشغيل النساء ليلاً وتحديد الاعمال التي يحظر تشغيل النساء فيها. أي انه بإلغاء هاتين المادتين أصبح للنساء والرجال فرص متكافئة للعمل في كافة الاعمال على حد سواء. 


تجدر الإشارة إلى أن المرأة البحرينية بدأت العمل في القطاع الخاص في الخمسينات، ثم بدأت بعد ذلك بامتلاك السجلات التجارية ودخول مجال ريادة الأعمال في الستينات، وتؤكد النتائج الإحصائية الرؤيا الواضحة للوضع الراهن للمرأة بمملكة البحرين في القطاع الخاص، حيث ارتفعت نسبة مشاركة المرأة البحرينية من اجمالي العاملين البحرينيين في القطاع الخاص ومجال الأعمال الحرة، من 24% عام 2001 لتصل إلى 35% وفق بيانات الربع الثاني للعام 2023 الصادرة عن المجلس الأعلى للمرأة.   كما تبوأت المرأة البحرينية مناصب قيادية عديدة في مؤسسات القطاع الخاص كرئيسة تنفيذية، ورئيسة لمجالس الإدارة وعضوة في مجالس الادارة، واستطاعت أربع نساء الفوز في انتخابات مجلس ادارة غرفة تجارة وصناعة البحرين في عام 2014 وبنسبة 22%.  كما أخذت المرأة تنخرط في مجالات عمل جديدة لم تكن تشارك فيها سابقاً مثل قيادة سيارات الأجرة وتدريب السياقة وصياغة المجوهرات. كما أوضحت المؤشرات بأن نسبة مشاركة المرأة في التعليم الحكومي والخاص تبلغ حوالي 50%.




A Comprehensive Overview of General Assembly Meetings in Bahrain Shareholding Companies

A Comprehensive Overview of General Assembly Meetings in Bahrain Shareholding Companies

In corporate governance, the processes governing Ordinary General Meetings (OGM) and Extraordinary General Meetings (EGM) serve as frameworks for decision-making within organizations. As per Legislative Decree No. 21 of 2001, promulgating the Commercial Companies Law (“CCL”), as amended from time to time, Joint-stock Companies, known as Bahraini Shareholding Company (“BSC”), and Joint-stock Companies (Closed), known as Bahraini Shareholding Company (Closed) (“BSC(c)”), are required to hold their general assembly meetings. This article covers the requirements pertaining to invitations, legal quorums, voting procedures, and authorities applicable to both public and closed joint stock companies in Bahrain.

Before we dive into the intricacies and differences of the two types of meetings, a brief introduction, BSC shareholders are liable for the company’s debts only to the extent of the value of their shares. A BSC allows negotiable shares, enabling multiple legal or natural persons to subscribe. There are two categories of BSCs: public and closed. Public BSCs are listed on the Bahrain Bourse, the capital market of Bahrain, and their shares are openly traded. Closed BSCs may be listed on the Bahrain Bourse but are not open for public subscription.





Timing and Summoning

The company’s OGM must be convened at least once during the first 3 months following the end of the financial year for companies listed on a stock exchange or licensed by the Central Bank of Bahrain (CBB), and within 6 months following the end of the financial year for other companies.

The following bodies may invite the extraordinary general assembly to convene:
 Board of Directors (BoD)
 A written request to the BoD by a number of shareholders representing at least 10% of the company’s shares.
 In the event of such a request, the BoD must convene the EGM within 1 month. Failure to do so will prompt the Ministry of Industry and Commerce (“MOIC”) to call for the meeting within 15 days following the expiration of that period, in accordance with the regulations outlined in Article 199 of the CCL.


Shareholder invitation: Published in at least two local newspapers, one in Arabic and one in English, at least 21 days prior to the meeting, with a detailed agenda.

BSC (c):
Shareholder invitation: Sent by registered mail at least 21 days before the meeting, or conveyed with shareholders’ signatures acknowledging time, venue, and agenda.

MOIC Notification:

        – Copies of invitation documents should be sent to the MOIC at least 10 days before the general assembly meeting.


Inviting the OGM:

The following bodies may invite the ordinary general assembly to convene:
BoD upon request by shareholders representing at least 10% of capital.
BoD upon a justified request by the auditor.
The auditor in case of finding remarks, whether financial or administrative or in case he cannot complete his mission.
-Competent body overseeing company activity.


The MOIC can call for a meeting if:
1. A month passes without the meeting being held.
2. The board’s membership falls below the required minimum.
3.Shareholders holding at least 10% of the company’s capital request it for valid reasons.
4. They deem the meeting necessary.

Article 209 of CCL: ‘The provisions relating to the ordinary general assembly shall apply to the extraordinary general assembly, subject to the provisions set out in the following articles.’

Meeting Notice:
 Published in at least two local newspapers, one in Arabic and one in English, at least 21 days prior to the meeting, with a detailed agenda.

MOIC Notification:

Copies of the meeting notice sent at least 10 days before the meeting to the MOIC.

The following information outlines the process for listed companies in Bahrain to convene the EGM.

Shareholder Invitation:
Invitations must be sent to shareholders at least 21 days before the meeting.


BSC: Published in two local newspapers (Arabic & English) with the agenda.


BSC (c): Sent by registered mail or confirmed delivery with the option for hand-delivered receipts.

Legal quorum

· Attendance of shareholders representing more than 50% of the company’s capital.
·  If the required quorum isn’t met, a second meeting with the same agenda must be scheduled within 7 to 15 days. The second meeting requires attendance by shareholders representing more than 30% of the capital to be valid.
· The third meeting is valid regardless of the number of attendees.
· If the dates for the second and third meetings were already specified in the invitation for the first meeting, new invitations may not be needed. However, if none of these meetings have taken place, publication in at least two newspapers, one Arabic and one English, is required.

BSC (c):
· The ordinary general assembly meeting requires attendance by shareholders representing more than 50% of the shares for validity.
· If the quorum isn’t met, the meeting is valid with those present after 30 minutes from the specified time of the meeting (unless the AoA specifies otherwise).
·Each shareholder has the right to attend the general assembly, and their voting power corresponds to their share ownership (any provision or resolution contrary to this is deemed null and void).
· A shareholder can delegate a person to attend the assembly, except for the chairman, board members, or company employees, unless they are first-degree relatives.
· Delegation requires a special written power of attorney designated by the company.
· Individuals lacking capacity must be represented by their legal guardians.
·The company shall prepare special cards indicating a shareholder’s shares and those they represent.
·Proxy appointments and delegations must be made at least 24 hours before the meeting.
·Members cannot vote for themselves or on behalf of those they represent in matters involving personal interests or disputes with the company.

· Extraordinary general assembly requires attendance by shareholders representing at least 2/3 of the company’s capital for validity.
· If the quorum isn’t met, a second meeting is scheduled within 15 days, requiring attendance by shareholders representing more than 1/3 of the capital.
· If the quorum isn’t met for the second meeting, a third meeting is scheduled within 15 days, with validity requiring attendance by 25% of shareholders.
·New invitations for the last 2 meetings may not be necessary if their dates were specified in the invitation for the first meeting, with publication required in 2 local daily newspapers.

BSC (c):
·Extraordinary general assembly requires attendance by shareholders representing 2/3 of the company’s shares for validity.
·If the quorum isn’t met, a second meeting is scheduled within 10 days, with validity requiring attendance by representatives of more than 1/3 of the capital.
· If the quorum isn’t met for the second meeting, a third meeting is scheduled within ten days, with validity requiring attendance by representatives of 25% of the capital.
· New invitations for the last two meetings may not be necessary if their dates were determined in the invitation for the first meeting, with shareholders notified if the first meeting was not held.




The majority of shares represented at the meeting (unless a higher threshold is required by AoA).

  • Resolutions of the extraordinary general assembly require a 2/3 majority vote of the represented shareholders.
  • Resolutions concerning capital changes, company term extension, winding-up, conversion, or merger require a 75% majority of shares present for validity.
  • Extraordinary general assembly resolutions require approval by the MOIC to become effective.
  • The extraordinary general assembly can pass resolutions within the ordinary general assembly’s powers if the necessary quorum and majority are present and the agenda includes the relevant matters.


Set out in Article 206 of CCL
1.Electing Board members and dismissing them
2.Setting remuneration of Board members
3.Discussing and ratifying the Director’s report on company’s activities and financial position during the financial year ended
4.Absolving Board members from liability or otherwise
5.Attend to and discuss the auditor report on the company’s financial accounts for the financial year ended
6. Ratifying the profit and loss account
7. Approval of the balance sheet and the statement of the net profits and dividends
8.Discussing and deciding on the recommendations related to bond and guarantee issuance, borrowing, and mortgaging.


Set out in Article 210 and throughout the CCL.
1. Amending constitutional documents
2.Extending term of the company
3.Increasing or decreasing company’s capital, including the issuance of new shares
4.Disposing of more than half in the value of the company’s assets subject to Article 194bis of CCL.
5. The entire project company was established to undertake or dispose of it in any other way
6.Winding up the company or merging it with another company.
7.Any other matters stipulated in the CCL.

In conclusion, the General Assembly Meetings (OGMs and EGMs) in Bahrain Shareholding Companies play a crucial role in corporate governance, ensuring transparency and effective decision-making within organizations. By understanding and adhering to these frameworks, Bahraini companies can enhance investor confidence and propel sustainable growth in the corporate governance landscape.

Insurance Coverage for Rain Damage and Business Interruption

Insurance Coverage for Rain Damage and Business Interruption

 Last week in Dubai, a storm hit the Gulf Estates, resulting in unprecedented damage to vehicles and property. As a result, all eyes are now on insurance companies as policyholders seek compensation for their losses. It is anticipated that many insurance claims currently being filed are for damaged vehicles, property, and business interruption.

 While it is widely known that most insurance policies provide coverage for rain-related damages, the ability to successfully file a claim hinges on the precise wording and clauses within each policy, including its coverage and exclusions.

For example, a comprehensive vehicle policy explicitly offering protection against rain and natural disasters ensures coverage for rain-related damages. Similarly, property All Risk insurance policies, covering all risks including those arising from natural calamities, typically extend coverage for rain-related damages.

 It is important to note that while damages from heavy rain are generally covered, specific weather-related events such as storms, cloud seeding, hailstorms, and flooding may be excluded unless expressly stated otherwise in the policy. Therefore, insurance professionals and policyholders alike must meticulously scrutinize the terms, conditions, and exclusions of their insurance policies to ensure comprehensive protection against such events.

Regarding business interruption coverage, it is well known that if a business is operational within twenty-four to forty-eight hours after an incident, there may be no eligibility for a business interruption claim under the policy. However, as previously mentioned, the availability of any insurance coverage depends on the precise wording of the insurance policy and its coverage and exclusions. Therefore, it is very important to review the wording of the policy in place carefully before seeking insurance coverage.

As for standard homeowners’ insurance policies, such policies provide coverage for damage resulting from rain-induced flooding. The extent of coverage depends on the specifics of the claim, as these policies typically address perils associated with the property itself, such as accidental leakage within the property. However, some policies may offer the option to include flooding as a covered risk, potentially providing compensation for such damages.

An important factor to consider is that it is essential for policyholders to thoroughly examine and revisit the unique terms and conditions of their insurance policies. Regular review, preferably on an annual basis and in light of any new unprecedented events, is crucial. This practice helps identify any gaps in the required coverage and ensures that the insurance policy adequately protects against any risk.

Contact Us

Should you wish to obtain further clarity on the above matters, please do not hesitate to contact our firm and speak to one of our corporate law experts.


Navigating Franchising Laws in Bahrain: Legal Considerations for Establishing and Operating Franchise Businesses

Navigating Franchising Laws in Bahrain: Legal Considerations for Establishing
and Operating Franchise Businesses

Franchising has emerged as a dynamic avenue for business expansion in Bahrain, offering entrepreneurs an opportunity to leverage established brands and proven business models. However, navigating the legal landscape governing franchise operations in Bahrain requires a nuanced understanding of local regulations and compliance requirements. From franchise agreements to intellectual property protection, various legal considerations shape the establishment and operation of franchise businesses in the Kingdom.

In this article, an essential background brief of information for prospective franchisors and franchisees seeking to enter the Bahraini market is provided. By examining key laws and regulations governing franchising, the aim is to offer clarity and guidance for stakeholders looking to capitalize on the burgeoning franchising sector in Bahrain.

Legislative Decree No. 21 of 2001 promulgating the Commercial Companies Law, as amended, governs the establishment and operation of commercial entities in Bahrain, including franchising businesses. It outlines various corporate structures, registration requirements, and corporate governance principles that may apply to franchisors and franchisees.

Bahrain has specific laws and regulations governing the registration, use, and protection of trademarks. These laws aim to safeguard the intellectual property rights of franchisors, including their brand names, logos, and other proprietary assets. Protecting intellectual property rights is crucial for franchisors to safeguard their brand identity and proprietary business methods. Franchisees must adhere to strict guidelines regarding the use of trademarks, logos, and other intellectual property assets. Bahrain provides legal frameworks for the registration and enforcement of intellectual property rights, offering franchisors avenues for recourse in case of infringement.

In addition, there are consumer protection laws in place to safeguard the rights of consumers and regulate commercial transactions. These laws include provisions related to advertising standards, product quality, pricing transparency, and dispute resolution mechanisms.

The Ministry of Industry and Commerce is the primary regulatory authority responsible for overseeing commercial activities in Bahrain. It may issue regulations, guidelines, or licensing requirements that impact franchising businesses operating within the country. The Bahrain Chamber of Commerce and Industry is a prominent business association in Bahrain that provides support and advocacy for businesses, including those involved in franchising. It may offer resources, networking opportunities, and guidance on legal and regulatory matters affecting franchisors and franchisees.

One of the fundamental legal documents in franchising is the franchise agreement. This contract outlines the rights and obligations of both the franchisor and the franchisee, including the use of trademarks, operating standards, fees, and territorial rights. In Bahrain, franchise agreements must comply with local laws and regulations, ensuring fairness and protection for all parties involved.

Despite careful planning and adherence to legal requirements, disputes may arise between franchisors and franchisees. Having robust dispute resolution mechanisms in place, such as mediation or arbitration clauses in franchise agreements, can help mitigate conflicts and protect the interests of both parties. Bahrain offers reliable legal pathways for resolving franchise-related disputes through its judicial system. In the event of disputes between franchisors and franchisees, Bahrain’s judicial system provides channels for resolving legal conflicts. This may include civil courts, which adjudicate commercial disputes according to Bahraini law.

Alternatively, franchise agreements may include provisions for alternative dispute resolution mechanisms such as arbitration or mediation. Bahrain has arbitration and mediation centers that offer neutral and private forums for resolving disputes outside of traditional court proceedings.

 As the franchising sector continues to thrive in Bahrain, entrepreneurs must prioritize a comprehensive understanding of the legal landscape governing franchise operations. By proactively addressing legal considerations such as franchise agreements, intellectual property protection, regulatory compliance, and dispute resolution mechanisms, stakeholders can mitigate risks and maximize opportunities for success in the Bahraini market. With careful navigation of franchising laws and regulations, entrepreneurs can unlock the full potential of franchising as a strategic growth strategy in Bahrain’s dynamic business environment.