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A proposed law that would allow NGOs in Bahrain to invest their surplus funds domestically in safe financial instruments will be reviewed during the weekly Shura Council session on Sunday.
The move is aimed at enabling such organisations to generate financial returns that would help them achieve greater financial sustainability and fulfil their core social objectives.
Under the proposed amendments to the 1989 Social, Cultural, Sports and Youths Clubs, Organisations and Societies, associations and non-profit organisations (NGOs) would be permitted to invest funds exceeding their immediate operational needs, provided the investments are made in Bahrain and limited to low-risk financial instruments.
The upper chamber’s financial and economic affairs committee endorsed the move, emphasising its potential to “enhance the financial efficiency of associations by freeing up surplus funds and injecting liquidity into the local market,” which could positively impact Bahrain’s GDP (gross domestic product).
Mr Al Maskati
“The bill is structured to restrict investments to the local market and to safe instruments such as government development bonds,” said committee chairman Khalid Al Maskati.
“This ensures the dual benefit of supporting national economic growth and enabling associations to better meet their objectives.”
He noted, however, that it is difficult to assess the full economic impact of the law due to the lack of comprehensive data on the amount of surplus funds held by associations.
He added that investment risk assessments would ultimately rest with the implementing authority, and advised the services committee to seek further clarity from the relevant regulatory bodies.
The legislation is not expected to have any direct fiscal impact on the state budget.
Dr Al Nuaimi
Information Minister Dr Ramzan Al Nuaimi affirmed the legislation’s alignment with national goals of empowering local civil society and strengthening their contributions through technical consultations and public engagement.
Mr Al Alawi
Social Development Minister Osama Al Alawi emphasised that the bill was compatible with ongoing efforts to improve governance and sustainability in the non-profit sector.
The minister pledged to co-ordinate with relevant Bahraini authorities to establish criteria ensuring safe, legally compliant investments.
“The investment mechanisms will be designed to minimise risk and ensure transparency,” said Mr Al Alawi.
“Each proposed investment must be accompanied by a detailed request including its type, value, funding source, board approval and minutes of an extraordinary general assembly approving the investment.”
Ms Tawfiqi
Youth Affairs Minister Rawan Tawfiqi highlighted similar legal reforms made in 2022 allowing youth organisations to establish commercial companies to support their services.
“The ministry continues to encourage investments by youth-related entities to generate sustainable income.
“However, such activities must align with core youth development goals and be subject to formal approval processes.”
Al Eslah Society, one of the oldest and most active NGOs in the kingdom, welcomed the bill as a “positive and prudent step” that allows civil society to avoid capital stagnation.
“Letting surplus funds sit idle in bank accounts contradicts sound economic behaviour,” said the society.
“We urge the government to define terms such as ‘unsafe’ or ‘high-risk’ investments clearly and apply these standards uniformly to all associations.”
The Good Word Society proposed separating the legal provisions on permitted and prohibited investment activities into two distinct articles.
This would, they argued, help organisations more clearly understand what types of investments are allowed.
The Abdulrahman Kanoo Cultural Centre emphasised that volunteer-driven non-profit organisations often face financial challenges due to dwindling community participation. The centre welcomed the law as a practical step toward ensuring the continuity and financial independence of civil society efforts.
“Allowing associations to invest safely is a positive move that helps them diversify income sources and continue serving the public good,” it stated.
Dr Al Salman
Shura Council services committee chairwoman Dr Jameela Al Salman said the current volume of surplus funds held by associations isn’t deemed much for investment to be unsafe.
“Our role is to ensure that the law enables civil society to thrive without exposing them to undue risk,” she said.
“Clear oversight, transparency and regulatory co-ordination will be key pillars of implementation.”
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