ipr    Info-Prod Research (Middle East) Ltd.
Home      Country Guide      Reports      Services      Business Development-    Clients      About IPR         Publications      Contact Us

	Bahrain		Info-Prod Country Guide
CHARACTERISTICS   INDICATORS   INVESTMENT ISSUES   PROJECTS   PROSPECTS

Investment Issues Privatization Privatization as a tool for reducing government expenditure, turning around unprofitable state-owned businesses and encouraging investment locally is an up-and-coming reality in the Gulf States including Bahrain. In the Gulf, privatization is often used to fund new developments of needed infrastructure, i.e., the use of private sector funding for new projects that, in the past, would have been commissioned and paid for by the government from its public sector account. This is in contrast to the approach known in Western countries as the "selling-off" of State assets. In order to implement the "project-financing" approach, privatization regulation tends to develop through contractual negotiation rather than through comprehensive legislation, as it would be difficult to legislate in a manner that would suit the varied characteristics of financed projects. As a result, regulatory systems for privatized infrastructure projects in the Gulf region are relatively ad hoc, based on regulation mechanisms set forth in individually negotiated contract documentation. A challenge facing the privatization process is the conflict between the realization of the benefits awarded by privatization and the past policy and culture of protecting one's own. In the not too distant past, only GCC nationals were permitted to trade freely in Bahrain. Non-GCC nationals were restricted to investing in four main financial houses. Restrictions on foreign investment and participation are gradually being relaxed. In 1994, Bahrain allowed non-GCC investors access to its markets provided they had a history of at least three-years residency in Bahrain. This requirement has been modified to one year, and it is expected that it will soon be lifted entirely thereby allowing all non-residents access to Bahrain's financial markets. A continuing restriction still hampering foreign participation in privatization schemes is the statutory limitation on foreign ownership by individuals of Bahraini companies' capital. Previous Chapter Contents Menu Next Chapter

Home      Country Guide      Reports      Services      Business Development-    Clients      About IPR         Publications ;   Contact Us