The government of Bahrain is working on a draft law to create a new self-sponsored residency visa for foreign investors.
The island kingdom’s Crown Prince Aalman bin Hamad Al Khalifa instructed the minister of interior to prepare the legislation, Bahrain News Agency reported late Tuesday.
The visa is intended to boost Bahrain’s “position as an investment destination”. It will allow foreign investors to obtain a “10-year renewable residency permit on a self-sponsorship basis”, BNA said.
The announcement follows similar plans by the UAE, which last week said it would introduce a 10-year visa for investors, innovators and talented specialists in the medical, scientific, research and technical fields.
The country also said it would approve a new investment law allowing 100 per cent foreign ownership of companies by year-end.
The UAE’s law is expected to boost the property market in particular by creating an additional incentive for purchases.
Bahrain has been among the hardest hit in the Gulf Cooperation Council by lower oil prices.
Reuters reported last week that the cost of insuring Bahrain’s sovereign debt against default jumped to near multi-year highs because of concern the country will lose access to international capital markets.
The International Monetary Fund estimates the country’s budget deficit will be 11.6 per cent of gross domestic product in 2018 and predicts its debt will exceed 100 per cent of GDP in 2019.
The government is preparing to implement a regional 5 per cent value added tax introduced by Saudi Arabia and the UAE’s on January 1 and is also eyeing reforms to subsidies for citizens.
Should Bahrain’s financial situation worsen, its Gulf neighbours are expected to step in with support.
But there is speculation there may be conditions attached relating to fiscal reforms going forward.