Bahrain

Bahrain is a hereditary constitutional monarchy and one of the six member states of the Gulf Cooperation Council. Its National Assembly has two chambers, an appointed Shura Council and an elected Council of Representatives, and the Constitution establishes a Constitutional Court. Article 2 of the Constitution names Islamic Sharia as a principal source of legislation, and the legal system follows the civil-law tradition, largely derived from Egyptian law. The resident population was about 1.59 million in December 2024, roughly 53 per cent of them non-Bahraini, on 786.5 square kilometres of land. The Central Bank of Bahrain (CBB) describes a free market economy with no restrictions on capital movements, foreign exchange, foreign trade or foreign investment, and the IMF reports non-hydrocarbon growth of 3.7 per cent in 2024, led by financial services.

The IMF's 2025 Article IV conclusion, published in January 2026, puts real GDP growth at 2.6 per cent in 2024 but also records an overall fiscal deficit of 11 per cent of GDP and gross government debt of 134 per cent of GDP, and Directors call for sustained medium-term fiscal consolidation. The dinar is pegged to the US dollar at 0.376 dinars per dollar, which the IMF calls a monetary anchor, and banks remain profitable and well capitalised. On financial crime, the joint FATF and MENAFATF mutual evaluation published in September 2018 found a moderate understanding of money laundering and terrorist financing risks, good in banks, insurers, securities firms and money transfer services but fragmented among designated non-financial businesses. Bahrain approved its first national risk assessment in 2019 and updated it in October 2021 to cover digital banks and virtual asset service providers. The sources reviewed do not name the country's main predicate offences, corruption risks or cyber risks.

The Commercial Companies Law (Decree-Law No. 21 of 2001) allows several company forms, including joint stock and limited liability companies. A Corporate Governance Code issued by the Ministry of Industry and Commerce applies on a comply-or-explain basis to joint stock companies other than those licensed by the CBB. For CBB licensees, the Code states that the CBB Rulebook complements and incorporates its provisions. The sources reviewed do not describe a register of beneficial owners of companies, and the 2022 MENAFATF follow-up report records that the 2021 update of the national risk assessment did not yet cover legal persons.

Bahrain implements UN Security Council terrorism-related sanctions through Cabinet Order No. 12 of 2021 on national terrorism lists. The Cabinet issues the national lists, the Ministry of Foreign Affairs submits listing proposals for UN designations, and funds must be frozen without delay, defined as within 24 hours at most. Supervisors send list-change notices to regulated firms, and the follow-up report records gaps in notices to lawyers, notaries and real estate agents. The sources reviewed do not describe any autonomous or GCC-level sanctions regime, or how exposure to foreign sanctions arises for firms operating in Bahrain.