Labour law, LMRA permits and Bahrainisation in 2026
Permit costs rise each year to 2029, workers can now be shared for up to three months, and the WPS is fully enforced. Here is how employing people in Bahrain works and what changed in 2026.
The Labour Law and the LMRA
Employment in Bahrain's private sector is governed by the Labour Law for the Private Sector, Law No. 36 of 2012, administered by the Ministry of Labour, which sets the rules on contracts, working time, leave, termination and end-of-service benefits for everyone. Foreign workers are additionally governed by the Labour Market Regulatory Authority Law, Law No. 19 of 2006, under which the LMRA issues and renews work permits, collects permit fees and monthly contributions, enforces Bahrainisation requirements and runs the Wage Protection System. Social insurance is administered by the Social Insurance Organisation (SIO).
In practice, every employer with foreign staff deals with all three: contracts and termination under the Labour Law, permits and fees through the LMRA's Expatriate Management System, and contributions through the SIO. The rules are clear and the systems digital, but they are cross-checked, and a failure in one, typically unpaid salaries in the WPS, quickly affects the others.
What changed in 2026
A foreign employee needs an LMRA work permit sponsored by the employer, issued for set periods and renewable, with a residence permit and the CPR identity card following. From 1 January 2026 the government increased work permit issuance and renewal fees, health care fees and the monthly contributions for employees' work permits, with the new rates rising in stages each year to 2029. Dependant visa fees and entity fees were not changed, and domestic workers are excluded.
| Monthly contribution per work permit (BHD) | 2026 | 2027 | 2028 | 2029 |
|---|---|---|---|---|
| Employer with 1 to 5 foreign workers | 7.5 | 10 | 20 | 30 |
| Employer with 6 or more foreign workers | 12.5 | 15 | 20 | 30 |
Figures as published for the 2026 increase. Work permit and health care fees rise on a similar schedule; the cost of each foreign hire should be budgeted on the 2029 rates for multi-year plans.
Moving workers within and between employers
In 2026 the LMRA amended the 2008 rules on work permits for foreigners through Resolution No. 2 of 2026, issued by the Minister of Labour as chairman of the LMRA Board. Employers can now deploy their authorised foreign workers between their own establishments, and, under strict conditions, allow a worker to work for another employer for up to three months without transferring the work permit. The worker must agree in writing, both employers must consent, and the LMRA must approve the request through the Expatriate Management System.
The change applies only to workers already authorised to work in Bahrain, excludes domestic workers, does not create a new recruitment route from abroad and does not alter the Bahrainisation percentages that apply to the employers' activities. It gives groups and contractors a legal way to share staff for short peaks, which previously led many employers into irregular arrangements.
The Flexible Work Permit, which allowed foreign workers to work without a fixed sponsor, was discontinued, and labour registration centres were introduced to regularise workers. Employers should not engage workers whose status depends on the former scheme without checking their current registration.
Percentages by activity
Bahrainisation sets the share of Bahraini nationals an employer must employ, by economic activity and sometimes by company size, and the LMRA checks compliance when it processes work permits. Employers below the required percentage face restrictions and additional costs on new permits for foreign workers, and government contracts and incentives can depend on compliance. Unlike the UAE's flat targets, Bahrain's requirements vary by sector, so the first step is to confirm the percentage that applies to the activities on your Commercial Registration.
Government programmes support the hiring and training of Bahrainis, notably through Tamkeen, the labour fund, which offers wage subsidies and training support for new Bahraini hires in eligible companies. In December 2025 the Shura Council rejected a proposal to impose a fixed ceiling on the number of work permits, preserving the current flexible approach, but the political pressure behind such proposals means Bahrainisation compliance is worth taking seriously.
Where disputes come from
Wage Protection System
Salaries must be paid through the WPS; enforcement became mandatory from February 2026, and non-payment through the system can be treated as a violation affecting the employer's work permits.
Social insurance
Bahraini employees are enrolled for pension and unemployment, with the employer's pension share at 18% of salary in 2026 and rising; for foreign employees, the employer pays work injury and both pay unemployment contributions.
End of service
Foreign employees' end-of-service entitlements are funded through contributions to the SIO under the mechanism introduced in 2024, rather than as a lump sum from the employer at the end.
Redundancy
A bill approved by parliament in May 2025 would require 60 days' notice to the Ministry and audited financial statements for terminations on economic grounds. Confirm whether it is in force before restructuring.
Disputes go first to the Ministry of Labour for amicable settlement, then to the labour courts. As elsewhere in the Gulf, they are usually decided on the paperwork: a written contract that reflects the actual terms, salaries paid through the WPS, leave records and correctly calculated entitlements.
Budgeting a team of eight
A newly formed Bahraini company plans to hire eight people in its first year: two Bahrainis and six foreign specialists. For the six foreign staff it budgets work permit and health care fees at the rates for six or more workers, monthly contributions of BHD 12.5 per permit in 2026 rising to BHD 30 by 2029, residence permits and medical checks, and the employer's social insurance and end-of-service contributions. For the two Bahrainis it budgets salary, the employer's pension contribution at 18% in 2026 and applies to Tamkeen for wage support.
Two decisions save money. Hiring the Bahrainis early helps the company meet the Bahrainisation percentage for its activity before it requests the foreign permits, avoiding restrictions. And because Resolution No. 2 of 2026 allows short-term sharing of authorised workers, the company can cover a three-month project peak by borrowing staff from a related company with LMRA approval rather than recruiting from abroad.
What every contract must reflect
| Topic | Position under Law No. 36 of 2012 |
|---|---|
| Contract | Written, in Arabic or with an Arabic version, fixed or indefinite term |
| Probation | Up to three months, with either party able to end the contract during it on notice |
| Working hours | Generally up to 48 hours a week, with reduced hours in Ramadan and overtime paid at a premium |
| Annual leave | At least 30 days a year after a year of service |
| Sick leave | Paid and partly paid sick leave on a sliding scale by length of illness |
| Notice | At least 30 days for indefinite contracts, or as agreed |
| Unfair dismissal | Compensation for dismissal without legitimate reason, calculated by length of service within limits set by the law |
Free zones and special areas apply the same Labour Law, and contracts should be checked against it even where an international group uses its own templates. Terms less favourable than the law are void, while more favourable terms bind the employer.
Residence for the people who run the company
Owners and partners of a Bahraini company obtain residence through the company, as investor or partner, and receive the CPR identity card that unlocks banking, leases and government services. Directors and managers working in the company need work permits like any other employee. Family members can be sponsored by residents who meet the salary or income conditions.
For owners who want residence independent of the company, Bahrain's Golden Residency offers a ten-year renewable route for property owners, retirees, investors and talented individuals, with the property threshold reduced to BHD 130,000 in 2025. Our Golden Residency guide covers the criteria and process.
Beyond the percentage
Meeting a Bahrainisation percentage with real roles is both cheaper and safer than meeting it on paper. Companies that do it well identify roles a Bahraini graduate or experienced hire can fill now, such as client service, operations, HR, finance and government relations, apply for Tamkeen support before the hire rather than after, and build training and progression into the role. Registering nationals in roles they do not perform exposes the company to penalties and to losing the benefit of the hire altogether.
Six things to have in place
Before hiring, a new employer in Bahrain should have: an active Commercial Registration with activities that match the roles; an LMRA account in the Expatriate Management System; a payroll set up for the Wage Protection System with a local bank; SIO registration; an Arabic employment contract template checked against Law No. 36 of 2012; and a note of the Bahrainisation percentage for its activities, with a plan to meet it.
Questions we get asked first
Which laws govern employment in Bahrain?
The Labour Law for the Private Sector, Law No. 36 of 2012, and, for foreign workers, the Labour Market Regulatory Authority Law, Law No. 19 of 2006.
What changed for work permits in 2026?
From 1 January 2026, work permit, health care fees and monthly contributions increased in stages to 2029, and Resolution No. 2 of 2026 allowed employers to deploy workers between their own establishments and share them with another employer for up to three months with approval.
Can a foreign worker in Bahrain work for a second employer?
Yes, for up to three months under Resolution No. 2 of 2026, with the worker's written consent, both employers' consent and LMRA approval, without transferring the work permit.
What is Bahrainisation?
The required share of Bahraini nationals by economic activity, checked by the LMRA when processing work permits. Employers below the percentage face restrictions and extra costs on foreign permits.
Is the Wage Protection System mandatory in Bahrain?
Yes; enforcement became mandatory from February 2026, and non-payment through the WPS can affect work permits.
What support is there for hiring Bahrainis?
Tamkeen, Bahrain's labour fund, provides wage subsidies and training support for eligible companies hiring Bahraini nationals.
Clear rules, rising costs, cross-checked systems
Hiring in Bahrain is straightforward, but the LMRA, the Ministry and the SIO check each other. Budget foreign hires on the 2029 fee schedule, meet the Bahrainisation percentage for your activity early, pay through the WPS, and use the 2026 sharing rules rather than informal arrangements.
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This article is general information, current as of 2026, and is not advice for any specific situation. Confirm current rules with the MOIC, the NBR or the relevant authority before acting.