Bahrain implements new LP law

Bahrain is set to implement a limited partnership law expanding the available structures for private funds.

“Existing laws allowed funds to be established in the country through a unit structure, which was widely recognized across the Gulf region, but was not attractive to international investors, who commonly prefer limited partnerships,” Brian Howard, head of international funds at Trowers & Hamlins, told pfm.

The new laws, which Howard assisted in creating, mean Gulf Cooperation Council countries now offer and can set up a full range of flexible investment structures under the long-established onshore regulator, the Central Bank of Bahrain.

“In addition, the laws, and the structures they allow, will be immediately recognizable by the asset management industry across the globe and should be particularly attractive for structures which have a Middle East nexus on the investor or investment side,” Howard added.

The law also allows for more flexible investment terms, and for existing partnerships to convert into the new investment limited partnership.

Its aim is to allow Bahrain to compete with offshore centers in other Gulf states – especially Dubai, which has challenged the kingdom’s primacy as a fund domicile in recent years, according to Howard.

The limited partnerships will be available to international managers who meet the criteria established in the Central Bank of Bahrain's Rule Book.