Bahrain Rolls Out New Taxes, Land Fees & Work Permit Changes to Boost Economy
Bahrain is shaking things up with a fresh set of economic reforms aimed at strengthening public finances while keeping citizen support front and center. Approved by the Cabinet, the new measures focus on cutting costs, bringing in new revenue, and pushing for long-term, sustainable growth.
From corporate taxes to land fees and changes to foreign work permits, here’s what’s changing — and when.
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Government Spending Gets a Trim
All government entities have been asked to cut administrative expenses by 20%. The message is clear: spend smarter, not less effectively. Services to citizens are expected to remain unchanged despite the cuts.
State-Owned Companies to Pay More In
Government-owned companies will start contributing more to the national budget, helping boost state revenue without directly impacting residents.
Corporate Tax Coming in 2027
A new corporate revenue law is in the pipeline, proposing a 10% tax on company profits above BHD 200,000, or businesses earning over BHD 1 million.
The tax is expected to kick in from 2027, pending legislative approval. Some key sectors tied closely to local jobs will be exempt, and incentives will be offered to companies that hire Bahraini nationals.
Higher Taxes on Soft Drinks
Bahrain is also targeting sugary habits. A proposed increase in selective taxes on soft drinks aims to encourage healthier choices and ease pressure on the healthcare system.
Fees for Undeveloped Investment Land
Starting January 2027, undeveloped investment land with full infrastructure will face a monthly fee of BHD 0.100 per square meter.
This applies to commercial, tourism, mixed-use, and service-related land — including malls, hotels, cafés, schools, hospitals, and fuel stations. Fees will be collected when applying for building permits or when properties are sold.
Sewerage Fees Start in 2026
From January 2026, new sewerage service fees will be introduced at 20% of water consumption costs. The first residential property owned by citizens will be exempt.
Foreign Work Permit Fees to Rise Gradually
To prioritize local employment, work permit fees for foreign workers will increase gradually over four years starting January 2026.
Permit issuance fees will rise from BHD 105 to BHD 125, monthly fees from BHD 10 to BHD 30, and healthcare fees from BHD 72 to BHD 144. Domestic workers are excluded from these changes.
Focus Still on Bahraini Jobs
The government stressed that these reforms go hand-in-hand with existing training and employment programs for Bahrainis, reinforcing their priority in the labor market.