Bahrain - Using an Agent to Sell US Products and Services Bahrain - Using an Agent
The U.S.-Bahrain Free Trade Agreement (FTA) and Bilateral Investment Treaty (BIT) ensure American companies no longer need to appoint a local commercial agent, though they may opt to do so. A commercial agency arrangement enables foreign investors to access the market without having to establish a direct presence in Bahrain. A commercial agent is any Bahraini party appointed by a foreign party to represent the foreign party’s product or service in Bahrain. Local law governs the relationship, whether the relationship is structured as a distributorship, sales agency, or otherwise. As in other Gulf countries, regular, personal contact is the key to success in trade relationships.
A company’s office qualifies as a regional office if the company services even one additional GCC country from the office. Bahraini law does not require foreign companies to hire a local agent or partner to establish a regional office in Bahrain. Nevertheless, U.S. companies setting up regional offices typically find it useful to have a relationship with a local representative, particularly to deal with the local bureaucracy.
The law governing the relationship between a Bahraini agent and foreign principal is the Commercial Agencies Law promulgated by Legislative Decree No. 10 of 1992 and its Implementing Regulations, Ministerial Order No. 2 of 1993. The law was amended by Legislative Decree No. 8 of 1998 and Legislative Decree No. 49 of 2002 (also known as the ‘Agency Law’).