Hiring Rules & Incentives for Private Sector Employers in Bahrain (2025)
Bahrain’s private sector continues to be a vital driver of economic growth, especially as the Kingdom focuses on diversification beyond oil. With progressive labor reforms, targeted incentives, and a skilled workforce, the government is encouraging local and foreign employers to expand operations and create sustainable jobs.
This guide explores Bahrain’s latest hiring rules, employer obligations, incentives, and support programs — along with practical tips for staying compliant and competitive.
Mandatory Private Health Insurance
Starting in 2025, all private employers must provide health insurance for full-time staff, under the updated Health Insurance Law. Employees cannot bear the cost. The Sehati portal will manage registration, compliance documentation, and renewals.
Bahrainisation Quotas & National Employment Objectives
Bahrain is reinforcing policies to increase the employment of Bahraini nationals, including:
A proposed cap on foreign workers at 30% of total workforce.
Targets to hire 20,000 Bahrainis and train another 10,000 by end of 2025.
Penalties, potentially up to 20% of the foreign worker’s salary, for non-compliance.
These underscore the urgency of integrating a Bahraini workforce effectively.
Visa Conversion Fee Increase & Restrictions
As of December 20, 2024, conversion of visit or family visas to work permits now costs BHD 250 (previously BHD 60). Non-compliance with Bahrainisation may lead to double the conversion fee.
There is also a proposed ban on converting visit visas to work permits entirely—employers should plan ahead.
Wage Support Programs via Tamkeen
a. National Employment Program (NEP)
Tamkeen provides substantial subsidies to employers hiring Bahraini citizens:
70% wage support in Year 1
50% in Year 2
30% in Year 3
Alternative tracks: 50% over 3 years, or 30% over 5 years
Specialized tracks exist for engineers, doctors, actuaries, and persons with disabilities.
b. Wage Increment Program
Employers can receive support for wage increases (5%–20%, capped between BHD 20–300) for Bahraini workers with at least 3 months tenure. 100% of the increment is subsidized for 24 months.
c. Wage Support for New Employees
If a Bahraini employee with 24 months’ experience transfers to a new company and gets a salary increase of at least 10%, Tamkeen covers the full difference (up to BHD 300) for 24 months.
Social Insurance Contributions
For Bahraini Employees: Employers pay 14% of salary (rising by 1% annually to reach 20% in 2028), while employees pay 7%.
For Foreign Employees: Employers pay 3%, employees 0%.
Unemployment Insurance: 2% of wages shared equally between employer and employee; government adds 1%.
Bahrainisation in Practice
Historically, policies have required new establishments with 10+ employees to include at least one Bahraini, with gradual increases toward a 50% target.
Recently, proposals suggest excluding Bahraini workers earning below BHD 600 from quota requirements, and mechanisms to recoup Tamkeen subsidies if Bahrainis are unjustly terminated.
Non-Compete Clauses & Labor Law
Non-compete clauses—like six-month restrictions after employment—may not hold under Bahraini law. Employers should consult with LMRA or Ministry of Labour before enforcing them.
Onboarding Best Practices (from industry experience)
One employer outlined the hiring process:
Publish job via LinkedIn and forums.
Conduct interviews, send rejection emails for transparency.
Formalize role: contract includes salary, benefits, working hours, etc.
Register Bahraini hires in SIO; social insurance ~15% employer share.
Apply for relevant Tamkeen support programs.
For non-Bahraini hires: transfer or apply for new work visa—requires newspaper announcement (BHD 30) and fees (~BHD 91 for 6-month visa).
Understanding Bahrain’s Labor Law Framework
Bahrain’s employment regulations are governed primarily by Labour Law for the Private Sector (Law No. 36 of 2012), alongside supplementary decrees and regulations from:
Ministry of Labour and Social Development
Labour Market Regulatory Authority (LMRA)
Social Insurance Organization (SIO)
Key principles:
Equal employment opportunities for Bahraini nationals and expatriates
Minimum wage standards for Bahrainis (BD 300/month in many sectors)
Standard working hours: 48 hours/week (8 hours/day, 6 days/week)
Mandatory contracts in Arabic (with possible bilingual versions)
Paid leave entitlements: annual leave (30 days), sick leave (55 days/year on a sliding pay scale), and maternity leave (60 days fully paid)
Employer Obligations in Recruitment
Employers must comply with strict procedural and documentation requirements when hiring, especially for foreign talent.
For Bahraini employees:
Register with SIO for social insurance coverage
Issue a written employment contract
Provide benefits as per Bahraini labor law
For expatriates:
Obtain an LMRA work permit (valid 1–2 years)
Provide health insurance before visa approval
Ensure employment contract matches LMRA details
Cover recruitment and visa costs (cannot be deducted from employee salary)
Quotas and Bahrainisation Requirements
Bahrain promotes local employment through the Bahrainisation program — setting minimum Bahraini employment quotas for each sector.
Example quotas (as of 2025):
Financial services: ~70% Bahraini staff
Hospitality: ~20–25% Bahraini staff
Construction: ~10–15% Bahraini staff
Compliance tip:
Employers not meeting quotas may face:
Higher work permit fees for expatriates
Restrictions on visa renewals
Exclusion from government incentive programs
Government Incentives for Private Sector Employers
Bahrain offers generous hiring incentives, particularly through Tamkeen, the Kingdom’s semi-government agency supporting economic growth.
Key programs include:
Wage Support Scheme: Up to 70% of Bahraini salaries subsidized for a fixed period
Training Grants: Fully or partially funded upskilling programs for local staff
On-the-Job Training Support: Salary co-funding for graduates and young professionals
SME Support: Reduced LMRA fees and business development assistance
New Digital Employer Services
The LMRA’s digital transformation has streamlined recruitment:
Online work permit applications
eVisa issuance
Digital contract verification
Integrated payroll and compliance portals
This reduces hiring timelines from months to as little as two weeks for fully compliant employers.
Recent Updates Affecting Employers in 2025
Stronger compliance checks before visa issuance (workplace inspections, quota audits)
Mandatory health insurance for all employees — expats and locals — via private providers
E-recruitment monitoring to curb unlicensed hiring agencies
Tamkeen program expansions for high-demand skills like IT, green energy, and advanced manufacturing
Penalties for Non-Compliance
Employers found violating labor laws may face:
Fines up to BD 500–1,000 per violation
Suspension of work permits
Blacklisting from future visa sponsorship
Mandatory compensation to affected employees
Steps to Ensure Compliance
Assess your hiring needs — identify roles, quotas, and training gaps
Use official LMRA/Tamkeen portals for applications and funding requests
Audit your employment contracts to match current legal requirements
Stay updated on quota changes and sector-specific regulations
Maintain detailed payroll & insurance records
Strategic Tips for Employers
Leverage wage support schemes to reduce hiring costs for Bahrainis
Invest in digital HR systems to manage LMRA and SIO requirements efficiently
Plan ahead for quota compliance to avoid higher work permit fees
Develop a training pipeline to upskill Bahraini hires into higher-value roles
How We Can Help
Our Business Setup & HR Compliance Services ensure your recruitment process in Bahrain is fast, compliant, and cost-effective.
Work permit & visa processing
Bahrainisation quota planning
Employment contract drafting & review
Payroll & SIO registration
Tamkeen incentive applications
📌 Contact us today to hire confidently and unlock Bahrain’s employer incentives.
FAQs – Hiring in Bahrain (2025)
Q1: Can I hire foreign staff without employing Bahrainis?
Yes, but only if you meet sector-specific Bahrainisation quota requirements. Falling short can increase visa costs and limit future approvals.
Q2: How long does it take to get a work permit in Bahrain?
With all documents in order, LMRA processing can take 2–4 weeks. Employers with a clean compliance record may see approvals faster.
Q3: Do I need to provide health insurance for employees?
Yes — since 2023, all employers must provide health coverage for locals and expatriates.
Q4: Can part-time staff be counted toward Bahrainisation quotas?
Generally, only full-time registered employees count, unless otherwise approved by LMRA.
Q5: Does Tamkeen support cover expatriate hires?
No, Tamkeen wage support is exclusively for Bahraini nationals.
Hire Smarter, Grow Faster in Bahrain’s Private Sector
Unlock the full potential of your team with our business setup and HR compliance solutions. Whether you’re an SME or a multinational expanding into Bahrain, we ensure you meet all hiring regulations, benefit from government incentives, and stay ahead of changing labour laws.
Why Compliance Matters for Employers in Bahrain
Non-compliance with Bahrain’s Labour Law or Bahrainisation quotas can lead to hefty fines, delayed work permits, and reputational risks. By partnering with us, you get:
Real-time updates on hiring regulations and incentive programs.
Guidance on Bahrainisation targets for your industry.
Full support in LMRA & Ministry of Labour approvals.
Advice on training subsidies and wage support schemes.
📌 See our [Business Registration in Bahrain] service for a complete employer onboarding process.
Private Sector Incentives You Shouldn’t Miss in 2025
The Bahraini government is actively encouraging private sector employment through:
Tamkeen Wage Subsidy – Up to 70% salary support for eligible hires.
On-the-Job Training Grants – Fully funded skill development programs.
Expat Permit Flexibility – Streamlined processing for high-demand roles.
Tax Exemptions & Fee Reductions for select business sectors.
💡 Combine these incentives with our [Investor Visa Assistance] for a seamless recruitment strategy.
End-to-End Employer Support
Step 1: Business Formation – We set up your legal entity, ensuring HR compliance from day one. (See: [Business Formation in Bahrain])
Step 2: Recruitment & Work Permits – We manage LMRA work visa applications for both locals and expatriates. (See: [Visa & Immigration Services])
Step 3: Payroll & Benefits Setup – Fully compliant payroll aligned with Bahrain’s wage protection system. (See: [Accounting & Payroll Services])
Step 4: Incentive Program Enrollment – Apply and qualify for government grants, subsidies, and tax relief schemes.
Common Mistakes Employers Make in Bahrain
❌ Ignoring Bahrainisation quotas in early hiring stages.
❌ Overlooking training subsidies that reduce long-term costs.
❌ Poor visa planning leading to onboarding delays.
❌ Not adapting to 2025 labour law updates.
We make sure none of these happen to your business.
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