Pursuant to Section 5 of the Foreign Direct Investment Regulations, foreign direct investment is permitted in all sectors except those enumerated in Schedule IV. This schedule encompasses, inter alia, news media and “activities included in the Prohibited List of the Royal Government.” The latter list could not be found online, and therefore, it remains uncertain whether the activities specified in Schedule IV extend to the digital domain.

In addition to the sectors where foreign investment is prohibited, the Foreign Direct Investment Regulations 2019 provide that all other sectors, with the exception of certain sectors in Schedules I-III that have ad hoc conditions, are subject to a maximum foreign investor shareholding of 74% (Section 8). The 74% limit therefore applies to virtually all sectors of the economy.

Section 3.7 of the 2019 Foreign Direct Investment Policy provides that any commercial activity carried out by a foreign company requires prior approval, as well as a commercial license, prior to starting operations.
As specified in Sections 56–64 of the Foreign Direct Investment Regulations 2019, investors must register their investment in accordance with the FDI Application Guidelines and comply with the prescribed minimum project cost and equity requirements. Sections 71–76 of the Regulations further stipulate that the Department of Industry reviews and approves priority sector activities listed under Schedules I and II, while proposals for all other sectors are decided by the Project Approval Committee. Once approved, investors are required to obtain a business licence from the relevant Regional Trade and Industry Office within three months.
Schedule V of the Regulations additionally sets out the criteria for the approval of all activities that are not included under Schedules I-III, including a minimum of 40% value addition, positive foreign exchange flows, employment generation, and a long-term plan for skill transfer and progressive Bhutanese employment.
In this regard, Section 40 of the Regulations stipulates that foreign companies may only obtain work permits for foreign employees when qualified and experienced Bhutanese personnel are not available. Sections 45 and 46 further require all foreign companies to implement technical knowledge transfer programs and to progressively increase the employment of Bhutanese nationals, including the requirement to hire at least five permanent Bhutanese workers for each foreign employee before the fifth year of commercial operations.

Section 8 of the Foreign Direct Investment Regulations 2019 provide that, in sectors where foreign investment is allowed, there are minimum project costs, with the exception of certain sectors in Schedules I-III that can have different requirements. The minimum project cost is set at BTN 50 million (approx. USD 600,000) in the manufacturing sector and BTN 25 million (approx. USD 300,000) in the service sector. Schedule I explicitly mentions that manufacturing of (i) electronics, (ii) electricals, and (iii) computer hardware is subject to a minimum project cost of BTN 50 million (approx. USD 600,000).

Bahrain has not adopted national legislation based on or influenced by the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Signatures.

It is reported that the registration of “.bh” and “.com.bh” domain names requires the presence of a local representative. Also, each applicant is permitted to register only a single domain name.

Law No. 35 of 2012 on Consumer Protection, together with its Executive Regulations, the Law on Electronic Communications and Transactions, and supplementary legislation, establishes a comprehensive legal framework for consumer protection, which extends to online transactions.

Bahrain has signed and ratified the United Nations (UN) Convention on the Use of Electronic Communications in International Contracts.

Bahrain has enacted national legislation, namely the Electronic Communications and Transactions Law, which is derived from or informed by the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce.

In accordance with Law No. 81 of 2006 with respect to Approving the Common Industrial Law of the Gulf Cooperation Council (GCC), Bahrain imposes a regime for import licensing for certain products. Importers of several products must obtain an industrial licence from the Ministry of Industry, Commerce, and Tourism (MoICT), which can be issued only to a firm or an individual resident in Bahrain. It is valid for one year (renewable) and is transferable between importers. This requirement applies to importers of several products, including electric motors, generators, transformers, and electricity distribution and control apparatus; batteries and accumulators; wiring and wiring devices; electric lighting equipment; domestic appliances, other electric equipment; and machinery and equipment.

Self-certification is allowed in Bahrain for radio transmission, electromagnetic interference (EMI) or electromagnetic compatibility (EMC). The country allows foreign companies to self-certify that they comply with these standards, through a Supplier Declaration of Conformity (SDoC). It is reported that, when applying for equipment type approval, the submission must include a manufacturer’s declaration of conformity, together with electromagnetic compatibility (EMC) and radio-frequency safety test reports issued by an internationally accredited telecommunications laboratory. These documents shall support the conformity assessment and be accompanied by a detailed technical description of the equipment and its associated units, including the frequencies that may be tuned or utilised.

Arts. 1 and 2 of Decision No. 51 of 2024 authorise engagement in the commercial activities enumerated in Table No. 1 through a virtual commercial store, subject to assessment by the competent directorate of the Ministry of Industry and Commerce and the nature of the activity for which the licence is sought; applicants must be Bahraini nationals, operate exclusively as a sole proprietorship, and provide a permanent correspondence address. Art. 4 requires licence holders conducting online sales to maintain an operational website and prohibits them from trading in any products listed in Table No. 2, while Art. 5 forbids the recruitment of foreign labour for licensed activities. Table No. 1 includes, among others, online sales.

It is reported that the de minimis threshold, defined as the minimum value of goods below which customs authorities do not levy duties, is 300 BHD (approximately USD 800). However, this threshold applies exclusively to business-to-consumer (B2C) consignments, whereas for business-to-business (B2B) transactions no de minimis threshold exists.

Art. 3 of Order No. 43 of 2022 states that controllers should conduct a Data Protection Impact Assessment (DPIA) in the following cases:
- Cases stipulated in Art. 22.1 of Law No. 30 of 2018, or a systematic and extensive evaluation of personal aspects relating to natural persons which is based on automated processing, including profiling, and on which decisions are based that produce legal effects concerning the natural person or similarly significantly affect the natural person;
- When processing on a large scale special categories of data or of personal data relating to instituting and pursuing criminal proceedings and related judgements referred to Art. 7 of Law No. 30; or
- When processing amounts to systematically monitoring a publicly accessible area on a large scale.