MPs challenge rejection of investment reform

TDT | Manama

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A call to reform Bahrain’s investment rules—offering tax incentives and other measures to attract capital—has been rejected by a key parliamentary committee as unnecessary and costly. However, MPs are determined to bring it to the floor on Tuesday.

The Financial and Economic Affairs Committee, chaired by MP Ahmed Al Salloom, argues that the Economic Development Board (EDB) already handles the issues outlined in the proposal, and a further review would be a waste of government resources. The committee also warns that pursuing this course could impose additional costs on the government without offering new benefits.

Despite this, MPs including Hassan Ibrahim, Dr. Hisham Al Ashiri, Dr. Ali Al Nuaimi, First Deputy Speaker Abdulnabi Salman, and Hassan Bukhammas are pushing forward with the proposal. They argue that Bahrain needs to rethink how it attracts investment, with an emphasis on offering tax incentives and direct government support for long-term investment. The proposal specifically calls for targeted tax relief and increased funding to draw in capital.

Highlighting bureaucratic hurdles as a significant obstacle for investors, the MPs are also advocating for simpler business registration and licensing procedures. They believe the proposal would ensure more efficient and streamlined processes that would benefit potential investors.

The MPs are also calling for a significant overhaul of Bahrain's infrastructure—including roads, transport links, telecommunications, and utilities—so that the country can remain competitive against neighbouring economies.

The MPs are additionally urging embassies and trade attachés to play a more active role in promoting Bahrain’s investment potential abroad.

A closer working relationship between the government and private sector is also on the table. The MPs argue that stronger collaboration could foster more successful partnerships and that the government should actively encourage this partnership to help drive investment.

Ibrahim highlighted that, “This proposal is a crucial element of economic development strategies for nations and regions,” adding that Bahrain must ensure "a stable and reliable investment environment" to maintain investor confidence and avoid potential capital flight.

The committee, however, disagrees. It points to the EDB, established in 2000 under Royal Decree No. 9, as proof that the government already has a dedicated body handling these matters. With the proposal facing strong opposition, the debate on Tuesday is likely to focus not on whether investment policies need reform, but on whether the MPs' calls for change are necessary at all.