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Businesses in Bahrain Unhappy with New Expat Fees

Bahrain is currently working hard to foster new businesses

and attract international talent to the Kingdom. For too long it has been a far

lower-profile destination for expat workers and businesses than its flashier,

better-known cousins like the UAE. Releasing that oil won’t last forever – and

that foreign investment will be key to their future development, Bahrain is

trying hard to attract talent from around the world.

However if local business owners are to be believed, a new

law being introduced could have a significant negative impact on this policy.

Like all the Gulf nations, Bahrain has a flourishing

expatriate population, however recently the costs of medical care for expats

has come under fire. In theory all expat workers are expected to have their own

health insurance policy to cover emergency care if necessary. While standards

of medical care in Bahrain are high, the same care can be quite expensive.

Health insurance is therefore essential – especially to less skilled expat

workers on lower salaries.

However the reality of the situation is often rather

different. The last few years have seen growing problems with expats either

possessing insufficient levels of insurance – or even none at all. In cases

where medical assistance is needed the Kingdom itself often ends up

out-of-pocket when offering medical care to foreign workers.

In a move to eliminate this problem, and ensure that every

resident of Bahrain receives the level of medical care that they need – and at

a price that they can afford – the government is following in the footsteps of

the UAE by making health insurance the employer’s responsibility.

While the movement has its supporters, small businesses in

Bahrain are concerned at the increased costs they will be expected to shoulder.

The work permits required to hire expat workers are increasing in price by

almost 200% and the money will have to come from somewhere. Whether Bahraini

business owners lower salaries to account for their increased costs, or raise

prices to consumers, isn’t clear.

What is quite clear is that the Bahrain Chamber of Commerce

has taken up the torch and is campaigning to over-turn this recent ruling. They

point to the possible negative impact on small and medium-sized businesses in

the kingdom. They also make clear that initiatives like this normally involve a

consultation period; something which has not occurred this time.

While work permits for expats will now be far more expensive

than ever before, even permits to hire Bahraini workers themselves are set to

rise by almost 10% in the coming months.

Expats considering visiting Bahrain for work should

therefore carefully investigate the situation before signing any new employment

contract. Try to ascertain exactly who will be shouldering the costs, should

they become law. Without this some expats could find a nasty surprise if the

costs are somehow passed onto them either by lower overall wages or by salary

deductions.

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