Bahrain’s trust services sector just received a significant upgrade. The Central Bank of Bahrain (CBB) introduced Resolution No. (43) of 2024 Bahrain. A new regulation has redefined trustee licensing in Bahrain, introducing three distinct trustee categories with specific rules that impact both new and existing service providers.
Each category has unique capital requirements ranging from BD 1,000 to BD 75,000. Understanding these differences helps companies choose the right licensing path. This guide breaks down every requirement in simple terms.
You’ll learn about licensing steps, compliance obligations, and operational standards. Let’s explore how Resolution 43/2024 shapes your trust business future.
Table of Contents
What is Resolution No. (43) of 2024 Bahrain?
The Central Bank of Bahrain issued this resolution on November 12, 2024. It replaces the old Resolution No. (33) of 2018 completely. Governor Khalid Ebrahim Humaidan signed this important regulatory update. The resolution modernizes the way trust services operate in Bahrain.
This new framework aligns with the goals of Bahrain Vision 2030. The Kingdom wants to strengthen its financial services sector. Better regulations attract international trust companies to the region, enhancing investor confidence. Commercial law in Bahrain now has clearer trustee guidelines.
The resolution builds on Legislative Decree No. (23) of 2016. That decree established the legal foundation for trusts in Bahrain. Resolution 43/2024 adds specific licensing rules on top of that. It also references several other essential regulations.
Legal Framework & Commercial Company Law Bahrain
Resolution 43/2024 rests on solid legal ground. The Central Bank of Bahrain Law from 2006 provides core authority. Regulation 1 of 2007 defines the term ‘regulated services.’ Resolution No. (43) of 2011 sets general licensing conditions.
Resolution No. (23) of 2015 covers board member approvals. The CBB Rulebook contains detailed standards for trustees.
Trustee licensing also aligns with the Commercial Companies Law (CCL) Bahrain, ensuring full compliance with the corporate framework. Companies must follow the Commercial Companies Law Bahrain requirements for proper incorporation and governance.
Trustee Licensing Categories Under Resolution 43/2024
Resolution 43/2024 creates three trustee types. Each category serves different business models and needs. The three categories offer increasing levels of operational flexibility. They also have different capital and management requirements. Let’s examine each category in detail.
Category A: Full Independence
Category A trustees operate with complete independence. They can provide all regulated trust services without restrictions. This category suits established trust companies seeking full control.
Legal Forms Allowed:
- A company established in the Kingdom of Bahrain
- Branch of a foreign company
Capital Requirement: BD 75,000 minimum (Bahraini Dinars, approximately USD 199,000)
Key Features:
- Must maintain a physical office in Bahrain
- All books and records are stored at the Bahrain location
- Can work with Category B trustees as partners
- Requires a full executive management team
- One executive needs 5+ years of trust services experience
- Two executives need 3+ years of trust services experience
Category A trustees implement their own compliance systems. They manage risk, Anti-Money Laundering (AML), and Counter-Financing of Terrorism (CFT) programs independently. This category demands the highest operational standards.
Category B: Co-Trustee Model
Category B trustees never work alone. They must always partner with another CBB-licensed trustee. This co-trustee arrangement defines their entire operation.
Legal Form: Must be a company in Bahrain
Capital Requirement: BD 1,000 minimum (approximately USD 2,650)
Key Features:
- Always operates with a co-trustee partner
- Cannot work with Category C trustees
- Records kept at the co-trustee’s business location
- No executive management team required
- The Board of Directors must meet CBB standards
- Exempt from certain application documents
Both trustees share joint responsibility for all trusts. They both ensure compliance with all laws and regulations. The partnership creates shared accountability for AML and CFT.
Category C: Managed Trustee
Category C trustees outsource administrative and operational work. They contract with a “managing trustee” for these services. This model suits individuals or entities wanting trustee status.
Legal Form: Must be a company in Bahrain
Capital Requirement: BD 1,000 minimum (approximately USD 2,650)
Key Features:
- Must contract with a managing trustee
- Cannot use Category B trustee as manager
- The managing trustee handles all operational processes
- Records kept at the managing trustee location
- Needs Board resolution from the managing trustee
- No executive management team required
The managing trustee maintains accounting records and compliance systems. They implement policies, procedures, and controls for operations. Both parties share joint responsibility for regulatory compliance.
Capital Requirements & Company Law Compliance
Capital requirements vary significantly across trustee categories. These requirements reflect the level of operational responsibility.
| Category | Minimum Capital | Legal Forms |
|---|---|---|
| Category A | BD 75,000 (~USD 199,000) | Bahrain company OR foreign branch |
| Category B | BD 1,000 (~USD 2,650) | Bahrain company only |
| Category C | BD 1,000 (~USD 2,650) | Bahrain company only |
Category A requires 75 times more capital than Categories B and C. This gap reflects greater independence and responsibility. The Central Bank accepts other currencies equivalent to these amounts.
Companies Law Bahrain, requires proper corporate company registration for all trustees. Foreign companies choosing the branch option must follow specific rules. They need approval from their home country regulators.
Founders must show a willingness to provide financial support. This commitment matters when the company needs additional capital. The CBB evaluates this support capacity during application review.
How to Apply for a Trustee License?
Getting a trustee license involves several clear steps. The Central Bank of Bahrain carefully reviews each application. Resolution No. (43) of 2011 sets the general application framework.
Applications go to the Financial Institutions Supervision Directorate. You must submit various documents showing your qualifications. Category B applicants are eligible for some document exemptions.
What CBB Evaluates
The Central Bank looks at five main areas:
1. Reputation Check
- Your company’s standing and track record
- Parent company reputation, if applicable
- Subsidiaries’ standing in their markets
- Overall corporate integrity assessment
2. Home Country Regulatory Opinion
- No-objection letter from your home regulators
- Confirmation of good supervisory standing
- Capital adequacy verification from authorities
- Compliance with home country requirements
3. Legal and Regulatory Environment
- Laws applicable to your company
- Regulatory conditions in your jurisdiction
- Parent and subsidiary regulatory frameworks
- Cross-border compliance considerations
4. Financial Position Analysis
- Current financial health documentation
- Projected financial performance
- Founder support commitment letters
- Capital sustainability evidence
5. Track Record Review
- Management team’s professional history
- Founders’ integrity and conduct records
- Any previous regulatory issues
- Overall business conduct assessment
Category-Specific Requirements
Category B applicants skip documents g, h, and i. These exemptions simplify their application process slightly. Category C applicants need one additional document.
Category C must submit a Board resolution. Their intended managing trustee issues this resolution. It confirms the managing trustee’s agreement to provide services.
Governance, Management & Compliance Requirements
All trustees need a Board of Directors. Board members must meet CBB fit and proper requirements. Resolution No. (23) of 2015 governs the approval process.
Category A trustees need more than just a board. They require a whole executive management team. This team must have experience with specific trust services.
Experience Requirements for Category A
| Position | Experience Needed |
|---|---|
| At least 1 executive | 5+ years in trust services |
| At least 2 executives | 3+ years in trust services |
The experience must specifically be in trust services. General financial services experience doesn’t count here. Officers need appropriate qualifications and competencies, too.
Categories B and C have simpler requirements. They only need a qualified Board of Directors. No executive management team is mandatory for them. Their operational partners handle day-to-day management functions.
Compliance and Operational Requirements
Compliance forms the backbone of trustee operations. The resolution sets strict standards for all categories. Anti-money laundering and counter-terrorism financing are priorities. Category A trustees build their own compliance systems. They implement policies, procedures, and controls independently.
Category A Compliance Framework
Category A must establish:
- Complete risk management systems
- Robust compliance monitoring programs
- Anti-money laundering controls
- Counter-financing of terrorism measures
- Regular internal audits
When Category A works with Category B, responsibilities expand. Their compliance systems must also cover joint trusts. Both trustees share accountability for all managed trusts.
Category C Compliance Model
Category C trustees rely on their managing trustee. The managing trustee handles:
- All accounting records maintenance
- Day-to-day compliance oversight
- AML and CFT program implementation
- Policy and procedure execution
- Operational process management
Despite this outsourcing, Category C remains legally responsible. Under Commercial Law Bahrain, both trustees remain lawfully accountable. Both parties are jointly and severally liable for compliance failures. Commercial Law Bahrain holds both entities accountable.
Record Keeping Rules
| Category | Where Records Stay |
|---|---|
| Category A | Physical Bahrain office (mandatory) |
| Category B | Co-trustee’s business location |
| Category C | Managing the trustee’s location |
All records must be available for CBB inspection. This includes accounting records and trust documentation. Transaction records and compliance files need proper maintenance.
Impact on Bahrain’s Financial Services Industry
Resolution 43/2024 strengthens the Kingdom’s position. The trust services industry now has clearer operational guidelines. Bahrain Vision 2030 emphasizes diversification of the financial services sector. Better trust regulations support this strategic goal. The Kingdom competes with Dubai, Qatar, and Saudi Arabia.
Benefits for the Market
The three-tier system offers real advantages:
- Lower Entry Barriers: Categories B and C need minimal capital. This opens doors for specialized trustees and family offices.
- Operational Flexibility: Companies choose the model that matches their capabilities. Foreign branches can establish Category A operations.
- Enhanced Confidence: Joint responsibility provisions strengthen accountability. Investors trust the robust regulatory framework.
- Economic Growth: More trusted companies mean more professional jobs. The entire financial services ecosystem benefits.
The resolution positions Bahrain as a regional trust hub. International companies see value in the clear framework. Cross-border wealth structuring becomes more attractive here.
Transitional Provisions for Existing License Holders
What if you already have a trustee license? Your license remains valid. The Central Bank automatically classifies you as Category A or B.
Article 9 protects existing licensees through transitional provisions. You don’t need to reapply under the new rules. The CBB determines your category based on current operations.
Resolution No. (33) of 2018 no longer exists. Resolution 43/2024 completely replaces it. Any contradictory provisions from old regulations are void.
The resolution took effect on November 13, 2024. This was published one day after publication in the Official Gazette. All new applications follow the new framework immediately.
Action Steps for Existing Trustees:
- Wait for the CBB classification notification
- Review operations against your assigned category
- Update policies to match new requirements
- Ensure ongoing compliance with applicable provisions
If you want to know more about Resolution 43/2024, you can check it here.
Frequently Asked Questions
What is Resolution No. (43) of 2024 in Bahrain, and what does it regulate?
Resolution No. (43) of 2024 is a regulation issued by Bahrain’s Central Bank. It governs trustee services licensing in the Kingdom of Bahrain. The resolution creates three trustee categories with different operational models. It took effect on November 13, 2024, replacing the previous 2018 resolution.
What are the three trustee categries under Bahrain’s Resolution No. (43) of 2024?
Category A trustees operate independently with complete trust services authority. Category B trustees work as co-trustees alongside another licensed trustee. Category C trustees outsource administrative operations to a managing trustee. Each category has different capital requirements and operational structures.
Can foreign companies obtain trustee licenses in Bahrain under the new resolution?
Yes, foreign companies can establish Category A trustee operations in Bahrain. They can operate as a branch of their foreign company. Categories B and C must be companies incorporated in Bahrain. Foreign branches need approval from their home country’s regulatory authorities.
What is the difference between a co-trustee and a managing trustee in Bahrain?
A co-trustee (Category B) works jointly with another trustee on trusts. Both share equal responsibility for trust management and compliance. A managing trustee handles administrative work for Category C trustees. The managed trustee retains legal responsibility while outsourcing operations.
Conclusion
Resolution 43/2024 transforms trust services licensing. The three-tier system effectively accommodates different business models. This framework aligns perfectly with Bahrain Vision 2030’s financial goals. Clear regulations combined with operational flexibility create growth opportunities.
PI Startup Advisory helps you navigate Bahrain’s regulatory landscape. Our experts guide you through trustee licensing applications from start to finish. Contact us today to explore which category best suits your business model.