The Kingdom of Bahrain has taken significant strides in modernising its real estate sector in 2025, introducing both a comprehensive legal framework for time-share activities and a cutting-edge electronic property registration system. These developments aim to enhance transparency, investor confidence, and consumer protection, while streamlining processes for all stakeholders in the real estate market.
Law (1) of 2025: Regulating Time-Share Activities
On January 19, 2025, His Majesty King Hamad bin Isa Al Khalifa ratified and issued Law (1) of 2025 (the “Timeshare Law”), establishing a robust regulatory regime for time-share activities in hotel and tourism projects across Bahrain. A time-share is a property arrangement where multiple individuals share ownership of a unit. The Timeshare Law, approved by both the Shura Council and the Council of Representatives, marks a pivotal shift in the governance of time-share products, aiming to align Bahrain with international best practices and foster a secure environment for both investors and consumers.
The law’s primary objectives include:
- Regulation and Standardisation: Establishing clear rules for the licensing, management, and operation of time-share projects, including vacation exchange and points systems.
- Investment Promotion: Encouraging investment in time-share activities and enabling projects to maximise their value through innovative time-share products.
- Consumer Protection: Safeguarding the rights of beneficiaries before and after entering into time-share contracts, with mechanisms for complaint resolution and withdrawal rights.
- Transparency and Efficiency: Mandating integrity, transparency, and fairness in all licensing and operational procedures.
Licensing and Oversight
The Bahrain Tourism and Exhibitions Authority (“BTEA”), designated as the ‘Competent Authority’ pursuant to the Timeshare Law, is empowered to:
- Grant and renew licenses for time-share projects and managers.
- Set technical standards and operational requirements.
- Maintain a public registry of time-share contracts and oversee compliance.
- Coordinate with other government entities to streamline licensing and enforcement.
It is now prohibited to offer or sell time-share products to the public without a valid license from the BTEA. The licensing process involves documentation, real estate register annotations, and compliance with all regulatory requirements. Notably, the Timeshare Law provides for both initial and final licensing stages, with clear timelines and grievance mechanisms for applicants.
Beneficiary Rights and Protections
The Timeshare Law introduces several protections for beneficiaries, including:
- Right of Withdrawal: Beneficiaries may withdraw from a time-share contract within ten days of signing, recovering any advance payments.
- Escrow Arrangements: Financial obligations are to be fulfilled through mechanisms such as escrow accounts, ensuring that beneficiary funds are protected from the general creditors of project owners or managers in the event of insolvency.
- Prohibition of Overselling: Strict rules prevent the overselling or overbooking of time-share products, safeguarding beneficiaries’ access to their accommodation units.
- Transferability and Inheritance: Beneficiaries can transfer, sell, or mortgage their time-share rights, and these rights pass to heirs upon death.
- Complaint Resolution: Time-share managers must implement effective systems for handling beneficiary complaints, subject to standards set by BTEA.
Enforcement and Penalties
The Timeshare Law grants BTEA broad powers to inspect, investigate, and enforce compliance. Violations can result in administrative fines up to BHD 50,000, license suspension or cancellation, and, in severe cases, criminal penalties including imprisonment. Legal entities can also be held criminally liable, with fines up to double the maximum prescribed for individuals.
Digital Transformation: The New Electronic Property Registration System
Bahrain has launched a comprehensive electronic property registration system, transforming the way real estate transactions are processed. This digital platform offers:
- Online Applications and Payments: Property registration applications and payments can be made electronically, significantly reducing processing times.
- Immediate Property Transfers: Property transfers are now processed instantly, as long as all requirements are met.
- Integrated Data Systems: The system connects personal and commercial data with government databases, using QR codes and barcodes to ensure secure and swift processing.
- Geographic Information System (“GIS”): This system provides detailed data on over 300,000 properties, including historical records spanning more than a century.
- Ownership Statement Service: After payment of the transfer fees, ownership statements are automatically issued and sent to the registered phone number, enabling users to complete related transactions even before the final document is issued.
Implications for Stakeholders
These legal and technological advancements position Bahrain as a regional leader in real estate regulation and digitalisation. For investors, developers, and consumers, the new framework offers greater certainty, protection, and convenience. The integration of robust legal safeguards with cutting-edge digital infrastructure, Bahrain is poised to attract further investment and raise industry standards across the sector.
For further guidance on compliance with Law (1) of 2025 or navigating the new electronic property registration system, their Real Estate Department stands ready to assist.
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