Bahrain to hike labour permit fees

In a move that could impact the huge expatriate community in Bahrain as well as the businesses, the government has decided to charge a levy of 200 Bahraini dinars (Rs 21,000 approx) every two years for work permits.

The cabinet, at a session chaired by Prime Minister Shaikh Khalifa bin Salman Al Khalifa, approved the BD200 levy. The fees package also includes a monthly BD10 payment for each expatriate worker -- to come into effect from July 1 next year.

At the meeting, the Prime Minister recommended the need to strike a balance between labour market reform requirements and its development. Businessmen have criticised the move and claimed it could put medium and small firms out of business.

However, Labour Minister Majeed Al Alawi denied that the cost of employing foreign workers would almost double.

"The average cost for the private sector for an expatriate worker is estimated at BD100 a month and with the new levy, this cost will increase by 10 per cent," he said.

Meanwhile, Bahrain will allow companies to employ fewer Bahrainis with the relaxation of the hiring policy for foreign workers from the middle of next year. The percentage of Bahrainis that must be employed by private sector firms is being lowered from July 1.