Bahrain’s Ministry of Industry and Commerce has introduced new regulations aimed at improving commercial payment practices for businesses. The new Ministerial Decision is designed to foster economic growth by enhancing the business environment and aligning with global trends in digital payments.
Under these regulations, all commercial establishments in Bahrain must open at least one dedicated business bank account per location, regardless of the number of branches. All transactions must be processed exclusively through this account, ensuring greater financial transparency and supporting the national economy.
Furthermore, businesses are required to link their business accounts to their commercial registration and provide at least one digital payment option for customers. This ensures compliance with the law and supports smoother, more secure financial transactions.
The primary goal of these regulations is to raise awareness of the need for regulated financial practices. They aim to enhance customer protection, improve the safety of money transfers, and expand payment options through digital methods. Additionally, the move will help businesses track cash flow more effectively, reduce money laundering risks, and improve compliance with VAT and other related laws.
The new rules apply to all commercial entities in Bahrain, including small and medium-sized enterprises (SMEs), registered individual businesses, and online stores registered under the Sijili system. New commercial registrations must update their information before issuance, while existing businesses will gradually integrate into the system to ensure a smooth transition.
The overarching goal of the decision is to reduce reliance on unregulated cash transactions, which can lead to tax evasion, and move towards a fully digital economy. The first phase of this initiative, which began in December 2024, focused on setting up business accounts and digital payment systems. The second phase, expected to be completed by June 2025, will involve integrating businesses into a central payment system.
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