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Navigating The Complexity of Ownership From The Lens of Sanction By Extension

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Lapses in UBO Identification, Sanctions Compliance, and Corporate data

Tuesday, 30th April. 13:00 - 14:00 London Time (GMT+1)

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Mark Bain

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Louie Vargas

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Michael Harris

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Current State of Business Verification in Bahrain

05 April, 2024

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In Bahrain’s dynamic business landscape, verifying a business’s legitimacy is paramount for investors across the globe. With its favourable geostrategic position, advantageous business ecosystem, and enhanced regulatory framework, Bahrain attracts diverse businesses, making corporate due diligence essential. Whether considering a business partnership or investment, understanding the current state of business verification in Bahrain is crucial for ensuring transparency and security. In this comprehensive guide, we’ll delve into the various steps and resources available for corporate due diligence during company verification in Bahrain.

This article will equip you with the knowledge to make informed decisions and mitigate risks effectively, from regulatory databases to industry-specific checks.

Business Verification Challenges in Bahrain:

KYB verification in Bahrain is subject to many challenges during the company verification due to multiple reasons that hinder the corporate due diligence process, a few of which are stated below;

  • Multiplicity of  Regulatory Authority:

The KYB MENA region presents unique challenges while dealing in trade zones, which are the center of attention for global investors that are also present in Bahrain. However, challenges in business verification in Bahrain significantly hinder company verification because multiple regulatory authorities deal with licensing and business regulations that hinder collecting business information due to multiple sources. This imposes the more substantial challenge of accessing business information from these regions for verification during business onboarding

  • Language Barrier: 

Arabic is widely spoken in Bahrain, and many business documents exist in the same language. Non-native investors have difficulty understanding Bahrain’s official language. This hindrance of language might become a hurdle in the KYB process due to the incorrect translation of crucial information. Mistranslated business information gives a chance to potential risks in correctly identifying the company and essential data about shareholders, making the KYB verification Bahrain less effective and more prone to risks. 

Primary regulatory bodies for compliance:

Central Bank of Bahrain:

The Central Bank of Bahrain monitors the financial sector and plays a crucial role in maintaining economic and monetary stability, thus facilitating business verification in Bahrain. CBB regulates various sectors within Bahrain, including banking, insurance, capital markets, money exchange, and financial infrastructures. The Central Bank facilitates business registration through its regulatory framework by providing guidelines and support to promote a transparent and stable business environment conducive to economic growth and investor confidence in Bahrain.

Ministry of Industry, Commerce & Trade (MOICT):

Bahrain’s Ministry of Industry, Commerce & Trade (MOICT) enhanced its oversight of business registration processes by developing a country portal named Sijilat. Sijilat helps in commercial Registration (CR), which is also essential for business verification in Bahrain, ensuring legal recognition and facilitating taxation and regulatory compliance. It serves as a public record that helps bring transparency to regulatory compliance. CR is essential for business agreements and contributes to statistical data collection for economic analysis and policy formulation, playing a pivotal role in Bahrain’s business landscape and economic development. MOICT ensures compliance with legal requirements that contribute to the fiscal growth of Bahrain aligned with critical regulations.

Data Score of Business Information for Bahrain:

The figure below shows the Data Score of information available and unavailable on the official registry for KYB verification in Bahrain. 

Current State of Business Verification in Bahrain

Key Beneficial Ownership Information – Bahrain:

The figure below shows the ultimate beneficial owner information available on the official registry, for business verification in Bahrain. 

Beneficial Ownership Information Bahrain

How can The KYB help?

The KYB has real-time integrations with official registries of 250+ countries and states and a dump of 300+ million companies that can be re-verified for their current status at the click of a button. It also provides ultimate beneficial owner information for businesses, especially for companies operating free zones. The KYB leads on-demand data delivery for enhanced due diligence for business onboarding. The Know Your Business verification in Bahrain  retrieves data for business verification in Bahrain from the following repositories;

  • Bahrain Chamber of Commerce and Industry: The KYB retrieves data from BCCI that provides licenses to the business and helps with the registration process. It facilitates businesses’ licensing and registration process. This helps establish new companies and ensures compliance with regulatory frameworks.
  • Bahrain Bourse: The data from Bahrain Bourse includes the trade listing and depositary services for the country’s various financial bodies
  • Central Bank of Bahrain: The data acquired from CBB ensures compliance with regulatory standards, including capital requirements and economic stability.  
  • Urban Planning and Development Authority: The data obtained from this source includes regulations for issuing permits for development considering urban planning and implementing resolutions.
  • Export Bahrain The data score from Export Bahrain includes exports and the credibility of the private sector’s products and services worldwide by promoting opportunities in foreign markets.  
  • Labour Market Regulatory Authority: This authority looks into labour market regulations, and ensures compliance with employment laws and standards.
  • National Bureau for Revenue: The KYB sourced data from NBR that facilitates tax-related affairs, including collection, assessment, and enforcement, to ensure compliance with Bahrain’s tax laws and regulations.
  • Ministry of Justice, Islamic Affairs & Waqf: The ministry offers justice services, oversees Islamic affairs, and manages religious endowments to uphold legal and religious principles in Bahrain.
  • Industrial Service System: It adds to the data score by providing details about the services to businesses in Bahrain’s industrial sector to enhance productivity, efficiency, and compliance with regulations.

The KYB offers business verification services across different regions around the world to stay compliant with regulations around the world to make business safer and trustable. You can Get in touch with us for any information.

Also read: Mapping Risks And Challenges of KYB in the MENA Region

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