To what extent can laws be reformed to enable a more attractive destination for foreign investors?
AL RUMAIHI: Over the next few years we have a number of priorities aimed at driving foreign direct investment (FDI). This includes a new bankruptcy law that introduces measures to allow company reorganisation, where the management can remain in place and continue business operations during the administration of a bankruptcy case. This new law is designed to nurture the start-up and small and medium-sized enterprise (SME) market whilst also increasing our footprint in the financial technology (fintech) space. To that end, we have recently launched Bahrain FinTech Bay, our first dedicated hub for fintech and a regulatory sandbox where companies can get business licences tailored specifically for start-ups. We are also implementing a new data protection law to support the growth of the digital economy, and a new competition law to encourage competition and innovation among companies.
In what areas does fintech innovation have the strongest potential to impact the overall economy?
AL RUMAIHI: Fintech innovation will have a wide-reaching impact on the economy as it will create new jobs, provide necessary training for our already highly skilled workforce and drive FDI in the kingdom. The financial services sector is currently going through an unparalleled period of disruption, and Bahrain already has the soft and hard infrastructure in place to not only handle this disruption, but to allow innovation to thrive. We have been working hard to create the ideal environment for fintech companies to access the vast opportunities across the GCC and internationally.
We see the strongest potential for fintech in the banking sector – we have had a strong history working across both conventional and Islamic banks. In September 2016 the banking sector’s total assets reached $192.7bn. The sector’s growth has been supported by an open market economy, stable and prudent macroeconomic and fiscal policies, a consultative regulatory framework in line with global standards and a strong, well-qualified local workforce.
How do you address investors’ concerns about the kingdom’s current fiscal position and the likelihood that this will lead to a higher level of taxation?