A proposal to impose strict legal controls on foreign investors and flexible-visa workers – ensuring they do not leave Bahrain permanently without settling outstanding debts – has been approved by Parliament.
MPs yesterday underscored the significance of the move, arguing that unresolved debts were draining the economy, undermining the investment climate, and negatively affecting thousands of local businesses.
The proposal by five legislators led by Strategic Thinking Bloc spokesman MP Khalid Bu Onk has now been officially referred to the Cabinet for review.
An explanatory memorandum attached to the proposal describes the issue as a ‘growing phenomenon’ that casts a shadow over the national economy.
According to MPs, many expatriate business owners and flexi-workers leave Bahrain abruptly, often after accumulating debts owed to government entities, banks, landlords, and private companies.
“These practices affect the economic cycle and weaken confidence in the integrity of commercial transactions,” they said, adding that small and medium enterprises are the hardest hit as many Bahraini entrepreneurs extend credit, services or partnerships to foreign investors who later disappear without settling dues.
Financial and economic affairs committee vice-chairwoman MP Zainab Abdulamir stressed that the problem has been worsening because expatriate investors enjoy the same commercial and banking benefits as Bahrainis – but with fewer exit restrictions.
She said many take bank loans, avail Tamkeen support or credit facilities from local traders, only to leave the country and return at their convenience.
“The system is being abused, and Bahraini traders are paying the price,” she added.
MP Mohammed Al Marafi noted that neighbouring Gulf states impose strict rules to prevent individuals with outstanding dues from leaving their countries, while Bahrain remains lenient.
“GCC states except Bahrain prohibit travel unless payments or guarantees are presented,” he said. “Good luck getting Interpol to catch them once they flee.”
He argued that Bahrain must align its controls with regional practices to safeguard its investment reputation and protect local creditors.
Services committee chairman MP Mamdooh Al Saleh highlighted the scale of the challenge, revealing that 29,000 active commercial registrations in Bahrain – equivalent to 35 per cent of all CRs – are owned by expatriates.
“There should be proper procedures to monitor all expat investors,” he said.
“We must ensure the market remains fair, transparent and protected from exploitation.”
He added that while Bahrain welcomes investors, the absence of control mechanisms prior to final departure has encouraged some individuals to exploit legal loopholes.
MP Mohammed Al Rifai said the impact on local traders has been devastating, with many finding themselves dragged into legal disputes after trusting expatriate partners who vanish after some time.
“This is harming families, businesses and the wider economy,” he said.
The proposal does not call for restricting lawful economic activity but for establishing ‘balanced controls within the limits of applicable laws’ that require expatriate investors and flexi-visa workers to settle debts before leaving the country for good.
These may include financial guarantees, improved verification procedures when issuing CRs, enhanced co-ordination with banks and government agencies, and mechanisms to temporarily block travel until contractual obligations are fulfilled.
MPs said tough measures would boost confidence in Bahrain’s market, support entrepreneurship and attract quality investment.
The government will study its legal, economic and administrative implications before sending a formal response back to Parliament.
Legislators are optimistic the move will spark much-needed reforms.
“This is about fairness, economic stability and protecting the hard work of Bahraini entrepreneurs,” MPs said. “If we don’t act now, the problem will only grow.”
mohammed@gdnmedia.bh
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