Bahrain Amends Law to Help Startups Raise Capital

A night view of Bahrain's capital Manama. (AFP file photo)
A night view of Bahrain's capital Manama. (AFP file photo)
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Bahrain Amends Law to Help Startups Raise Capital

A night view of Bahrain's capital Manama. (AFP file photo)
A night view of Bahrain's capital Manama. (AFP file photo)

Startups and scale-ups in Bahrain are set to benefit from a funding boost following the launch of two new schemes that make it easier to raise capital.

A new amendment to the Bahrain Commercial Companies Law (BCCL) will enable firms to introduce employee share schemes and to raise funding via convertible notes – a type of loan which means lenders can be repaid in equity rather than cash.

The change is intended to further improve Bahrain’s business environment and bring the BCCL in line with global best practice.

The amendment allows closed shareholding companies to introduce employee share schemes, enabling them to retain talent and incentivize their employees.

The amendment will also allow these companies to raise capital through convertible notes, making Bahrain the first main land jurisdiction in the Gulf to provide for the use of these debt instruments.

Commenting on the amendment, Head of Startups at the Bahrain Economic Development Board (EDB) Pakiza Abdulrahman said that by granting employees the option to own or buy equity in the company, loyalty is increased and employees are incentivized to act as owners.

“Convertible notes are a debt instrument that provide startups with a simpler, cheaper and faster means of raising capital without having to establish a valuation at an early stage,” she added.

“By granting incentives for early investors such as discount rates, this instrument can attract a wider range of capital. These developments are empowering new growth for locally registered businesses – especially startups and SMEs with global ambitions.”

Director and Fund Manager at Al-Waha Fund of Funds, Areije al-Shakar said the startup and SME sectors have emerged as increasingly prominent pillars in Bahrain’s economic diversification and growth strategies.

“In fact, across the entire Gulf region, they are significant contributors to non-oil GDP and job creation and are widely regarded as being the engine of the Gulf’s post-COVID-19 economic recovery,” she noted.

Other enhancements include allowing for the establishment of non-profit companies, enabling online voting and candidacy submissions for board appointments, further increasing the rights of minority shareholders and further strengthening corporate governance and transparency.

The amendment comes in line with the World Bank’s naming Bahrain the world’s fourth most improved economy for doing business.



Abu Dhabi's XRG Targets Gas, LNG Capacity of 20-25 Million Tons a Year by 2035

Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo
Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo
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Abu Dhabi's XRG Targets Gas, LNG Capacity of 20-25 Million Tons a Year by 2035

Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo
Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo

XRG, the international investment arm of Abu Dhabi National Oil Company (ADNOC), is aiming to have a gas and LNG business with a capacity of between 20 million and 25 million metric tons a year by 2035, the company said in a statement on Tuesday.

XRG was set up last year as an investment company focused on lower-carbon energy, gas and chemicals, with assets of more than $80 billion.

On Tuesday, its board, whose members include former BP CEO Bernard Looney and Blackstone's Jon Gray, approved the capacity target and a new five-year business plan.

Board members also supported the assessment of potential gas acquisitions and LNG opportunities in North America, Reuters reported.

ADNOC's current US investments already sit under XRG, and the oil giant's Chief Executive Sultan Al Jaber said in March that XRG would make a significant investment in US natural gas in coming months.

XRG has also changed the name of its low carbon energies platform to Energy Solutions to reflect the full scope of the company's strategy, including energy demand linked to artificial intelligence and the digital economy, a company spokesperson said on Tuesday.

The board "endorsed the company's ambition to create a top three global chemicals platform," XRG said.

ADNOC had agreed in October to buy German chemicals maker Covestro for 14.7 billion euros ($16.73 billion) including debt. Jaber later said it would sit under XRG.