A bitter war of words erupted in the parliamentary chambers over plans to impose a minimum capital of BD100,000 for foreign investors seeking to set up fully, or partially-own, businesses in Bahrain … leading to a vote on the proposal being pushed aside for seven days.
Parliament was set to debate and vote on the suggested amendments to the 2001 Companies Law, presented by five MPs led by Mamdooh Al Saleh, which stipulated the new financial demands.
As Mr Al Saleh was trying to speak, Parliament’s financial and economic affairs committee chairwoman Zainab Abdulamir described the proposal as ‘boiling eggs’, an Arabic expression sometimes used to express dissatisfaction, comments which quickly trended on social media.
This prompted Parliament’s first deputy speaker Abdulnabi Salman to jump from his seat shouting that the committee’s recommended rejection to the move was ‘fraudulent’, accusing it of having its own agenda’ and ‘gibberish’ reasoning.
Parliament Speaker Ahmed Al Musallam demanded the MPs show respect, asking Mr Salman to calm down repeatedly as Ms Abdulamir continued the verbal jabs.
In despair, and in a bid to retain order of proceedings, he moved the vote for a week.
Industry and Commerce Minister Abdulla bin Adel Fakhro warned that the proposal, if implemented, would harm Bahrain’s efforts to attract foreign investments. He also pointed out that it would hinder economic reforms, putting agreed plans already set for implementation in jeopardy.
“This is a restriction on the open market policies that Bahrain is a regional pioneer in,” the minister pointed out.
The Bahrain Chamber, however, backed the move, claiming the unregulated manner in which foreign investments are currently attracted harms the business sector.
“In general, the current rules lack justice, harm competitiveness and damage business sustainability,” the chamber suggested.
The Bahrain Businessmen’s Association also backed the move saying the move would encourage local businesses, particularly small and medium sized enterprises, to develop, grow and increase their profit margins.
Parliament’s financial and economic affairs committee has recommended the rejection of the amendment, asserting that it would hamper the government’s plans for economic growth.
“This move sends a wrong message to foreign investors and could result in negative outcomes at a time when the country is making huge efforts to attract businesses from all around the world to set up facilities in Bahrain,” said Ms Abdulamir. “Economic growth is at stake as there are fields where foreign investments are vital, without any such minimum capital being met.”
Meanwhile, ministries, government bodies and fully-owned companies could be forced to present contracts worth BD100,000 or more to the Legislation and Legal Opinion Commission for review, under another proposed bill.
Parliament unanimously carried an amendment presented by MP Dr Ali Al Nuaimi to the 2006 Legislation and Legal Opinion Commission Set-up Law during the weekly session.
Currently, contracts valued at BD300,000 or higher are reviewed by the commission before they are approved.
The commission warned MPs in writing that the move would complicate the purchase and investment process leading to missed opportunities. It pointed out that ministries, government bodies and state-owned companies could voluntarily present contracts for review below the set amount, if they want an opinion on particular terms and conditions.
MPs also unanimously approved amendments to the 1972 Judicial Fees Law presented by Dr Al Nuaimi.
It would exempt Bahrainis on social welfare lists and those with monthly pensions below BD1,500 from paying judicial fees. The current fees ranges from 40 fils to BD194.500 depending on the case.
Parliament also unanimously approved amendments to the 2018 Value Added Tax Law that would force the government to release items from customs before VAT is collected from the importer. The proposal has been presented by MP Mohammed Al Marafi in a bid to ease the entry of items in cases where importers do not have the VAT money with them.
The Finance and National Economy Ministry said it was already working on an arrangement with the Interior Ministry to delay the collection of VAT up to a certain period.
The Interior Ministry pointed out that it was working on a VAT payment delay system to be implemented once electronic links with the National Bureau for Revenue is completed.
Ministries and government bodies could be given up to three weeks to reply on parliamentary probe queries. It comes under an amendment to the 2002 Parliament Bylaws Law presented by five MPs led by Jameel Hassan and approved by MPs unanimously yesterday.
Recent amendments have given parliamentary probe committees four months to investigate and present its findings on the open floor.
The next step is for them to be drafted into proper law by the government – with the exception of the companies’ bill – before being referred back to legislators.
mohammed@gdnmedia.bh
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