Bahrain's Commercial Registry framework has recently undergone significant revisions, reflecting a commitment to streamlining processes, enhancing compliance, and creating a more adaptable system for businesses. These changes introduced through Ministerial Orders No. 62 and 63 of 2024, mark a pivotal evolution under Bahrain Decree-Law No. 27/2015, as amended by Decree-Law No. 52/2018 and Law No. 9/2022 (hereinafter referred to as the CRL).
This article highlights the key updates and their impact on businesses navigating Bahrain's commercial registration requirements.
Revised Penalty Structure for Delayed Registration Renewals
One of the most notable updates comes under Ministerial Order No. 63 of 2024, which introduces a revamped penalty framework for delays in renewing commercial registrations. The revised structure strikes a balance between encouraging timely compliance and avoiding excessive financial burdens. Delays exceeding three years now incur an annual penalty of BHD 500, with a total cap of BHD 5,000 to limit excessive financial burdens. Under the updated framework: (i) delays in the first year are charged at BHD 10 per month or part thereof, (ii) the second year incurs BHD 20 per month or part thereof, (iii) the third year sees an increase to BHD 30 per month or part thereof, and (iv) delays beyond three years are subject to an annual penalty of BHD 500, capped at a total of BHD 5,000. This progressive structure ensures that penalties remain fair and manageable, encouraging businesses to stay compliant while avoiding overly punitive costs.
Streamlined Delegation for Commercial Registration Submissions
Ministerial Order No. 62 of 2024 simplifies the process for delegating commercial registration submissions. Previously, registrants needed to issue an official power of attorney for representatives. The new amendment allows a standard authorization for submissions made by Approved professional bodies recognized by the Ministry of Industry and Commerce or employees of the registrant. This change reduces administrative overhead, making it easier for businesses to authorize trusted parties to handle their registration processes.
Automatic Deletion of Commercial Registrations
Amendments to Article 10 introduce automatic deletion of commercial registrations if necessary approvals and licenses are not secured within one year of registration. Notifications are issued via the Ministry's online portal, Sijilat, ensuring transparency. However, recognizing the complexities involved in certain industries, Ministerial Order No. 62 of 2024 allows for annual renewal of registrations for activities requiring extended processing times, such as factories, hospitals and schools.
This annual renewal option is contingent upon valid reasons for the delay, fulfillment of all requirements, and payment of applicable fees. These provisions aim to accommodate industries with inherently lengthy approval timelines, providing a more practical solution for businesses.
Reinstatement of Deleted Registrations
Changes to Articles 20 and 21 now offer greater flexibility for reinstating deleted registrations. Previously, reinstatement was limited to requests made within three years of deletion. The updated framework allows reinstatement at any time, provided the registrant meets all necessary conditions.
This amendment provides businesses with the opportunity to recover their registrations without a rigid time restriction, facilitating a more accommodating regulatory environment.
Concluding Remarks
The amendments introduced by Ministerial Orders No. 62 and 63 of 2024, effective from 17 October 2024, reflect Bahrain's efforts to modernize its Commercial Registry framework.
The Ministerial Order No. 62 of 2024 simplifies delegation requirements and accommodates industries with complex approval processes through annual renewal options. While Ministerial Order No. 63 of 2024 revises the penalty framework, capping financial liabilities to ensure fairness while encouraging timely compliance.
Together, these updates enhance clarity, flexibility, and efficiency, providing businesses with a more adaptable framework to navigate their registration obligations. For registrants, staying informed and proactive in understanding these changes is key to maximizing the benefits of Bahrain's evolving Commercial Registry system.
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