Having a sound insolvency legal framework is essential in
securing a business-friendly environment which fosters the
interests of entrepreneurs and start-ups. Insolvency and bankruptcy
regulation in the Kingdom of Bahrain are addressed under two
distinct regimes, targeting financial institutions, as well as
companies licensed under Decree Law 21/2021 Issuing the Commercial
Companies Law (the “Commercial Companies Law”).
The significance of insolvency regimes must be considered
against a broader context. The economic crises in the wake of the
global financial crisis of 2008 as well as the COVID-19 pandemic
have debilitated economies across the world. In recent years, the
Gulf Cooperation Council (GCC) members have recognised the need to
gradually decrease their long-standing dependence on oil revenues
and have since enhanced their efforts to secure a business and
investor-friendly environment. One facet of this is the reform of
the insolvency legal framework.
