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Sunday, April 30, 2017
Bahrain announced a new law to organize Investment Limited Partnership which allows investors to establish limited partnerships nationwide, as oppose to only in identified free zones. Bahrain has become the first country in the GCC region to integrate this type of laws into its legal system nationwide.The laws enhance the sector competitiveness and create new funding mechanisms. The Limited Partnership Law is expected to provide a strong boost to the sector, supporting growth in real estate funds, private equity funds, venture capital and technology funds, startups, and Sharia-compliant funds, as well as captive insurance.The introduction of the Trusts Law aims to regulate the creation of a trust and its liabilities, as well as allowing establishment of a trust for charitable and non-charitable purposes.Chief Executive of Economic Development Board (EDB) Khalid al-Rumaihi said there’s a great potential in the GCC for investors looking for strong returns, adding that the development of the local funds industry can play an important role in facilitating that investment.“These reforms will provide a strong boost to the sector, support growth in a number of areas and help to make Bahrain a highly competitive location for those looking to access the opportunities around the GCC,” he said.The new law aims to explain the importance of the Trusts Law, the Investment Limited Partnership and the Protected Cells Companies law to financial institutions and banks in the kingdom, while also promote discussion to support in further enhancing the sector’s performance.Executive director of financial institutions supervision at the Central Bank of Bahrain Abdulrahman Al Baker stated that the outreach program will facilitate an ongoing dialogue with industry to discuss opportunities of further boosting Bahrain’s position as a financial hub.“The kingdom has a strong and mature financial sector that is only growing in par with international markets, and we at the CBB are looking for ways to nurture this growth with the joint support of the EDB, our main partner,” he said.Brian Howard, partner at Trowers and Hamlins, stated that the addition of the new investment limited partnership law, the protected cell companies law and the new trusts law in Bahrain, opens the door to many new lines of business and investment structures not previously available.Howard said it would provide Bahrain with: “structuring options in line with the best modern international examples.”The new law provides an extra degree of flexibility for companies structuring investment in different areas in Bahrain. With partnership laws in line with Common Law jurisdictions such as in London, New York and Singapore, the new law will allow financial firms to be able to operate within a familiar legal framework.The Law will also support financial firms in establishing financial investment funds, and grant them access to new funding mechanisms.
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