Country overview

#60

Bahrain

Country stats

Rating Points

175

This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.

Crypto Penetration

0.9%

Estimated percentage of crypto users out of the country's total population based on public data.

Legal Entities

Number of crypto companies registered in the country based on regulator data if available or other types of public data.

Regulation Points

100

An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.

Amount of crypto users

12 600

Total amount of crypto users out of the country's total population based on public data.

Taxation points

This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.

Market volume points

42.8

A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.

Status of crypto

Legally allowed

General status of cryptocurrency regulation in this jurisdiction.

Crypto payments

Legally allowed

The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.

Security Level

Safe place

The overall level of security in a given country based on open data.

Crypto Salaries

No info

The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.

Business Climate

Good

Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.

Stablecoin Regulation

Low

This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.

Bad Factors

This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.

Types of licenses

Crypto-to-crypto

This license type allows VASP to provide legal exchange from one cryptocurrency to another.

Crypto-to-fiat

This type of license regulates the exchange from cryptocurrency to fiat.

Cryptofund

This indicator means that investment funds, trusts, and crypto funds can get regulator approval to provide their activity in the country.

Good

Medium

Bad

intro

Bahrain is a promising tax haven for crypto investors, with a small population located in the Middle East.

Security level

According to our rating, Bahrain is a safe place. The jurisdiction has 75.8 points (from 100) for safety in Numbeo crime rating (1). The homicide level (2) is 0.1 per 100,000 inhabitants a year.

Crypto Payments

We need to find out about legal acts allowing crypto payments in Bahrain. Don't hesitate to contact us if you have this information.

However, we have a confirmation that crypto may be legally used (3) in payments in Bahrain. Binance has a joint project with EazyPay (4) to implement legally allowed crypto payments by QR code. Also, local Telecom company Stc Bahrain (5) will enable paying bills with crypto.

Crypto Salaries

We need more information about legal acts that allow crypto salaries in Bahrain. Please get in touch with us with any information about legal actions or cases in this niche.

Legal

The Central Bank of Bahrain (CBB) regulates crypto assets in the country. The regulation Directive is called ”CRYPTO-ASSET MODULE” (6).

Crypto Penetration’s overview of legal crypto activities is in the spreadsheet below. The spreadsheet is based on Thomson Reuters’ overview (7) of the Central Bank of Bahrain (CBB) Capital Markets Regulation.

Type of license (tag)	Name of license in English	Description of licensed activity
#cryptofund	Crypto Asset Service Category 1	Crypto Asset Service Category 1 includes (i) receiving and transmitting orders and (ii) Providing investment advice about accepted crypto-assets.
#cryptotocrypto	Crypto Asset Service Category 2	Crypto Asset Service Category 2 includes (i) Trading in accepted crypto-assets as an agent; (ii) Portfolio Management; (iii)Crypto-asset custody; (iv)Investment advice.
#cryptotofiat	Crypto Asset Service Category 3	Crypto Asset Service Category 3 includes (i) Trading in accepted crypto-assets as an agent; (ii) Trading in accepted crypto-assets as principal; (iii)Portfolio Management; (iv)Crypto-asset custody; (v) Investment advice.
#wallet	Crypto Asset Service Category 4	Crypto Asset Service Category 4 includes: (i) Operate a licensed crypto-asset exchange; (ii) Crypto-asset custody service.

Mondaq (8) has provided an overview of CBB licensing procedures.

Details

Entities who intend to participate in cryptocurrency financing must obtain a license to do so from the CBB, in order to participate and service a cryptocurrency division, such entities are required to apply to the CBB under one of the four categories listed below:

Based on Freemanlaw (9), there are seven types of regulated crypto activities:

The following activities are excluded from regulated crypto-asset services:

-(a) Reception and Transmission of order: -(b) Execution of orders on behalf of clients; -(c) Dealing on own account; -(d) Portfolio Management; -(e) Crypto-asset Custodian; -(f) Investment Advice.

You can also check the list of registered entities here (10) on the Central Bank of Bahrain site. Currently, three licenses, Category 3 and 1, and Category 4 are registered on the site. Licensed legal entities include CoinMENA, EAZYPay, Binance Bahrain, and Rain Management W.L.L.

Taxation

Tax name	Index
PIT tax Min	0
PIT tax Max	0
Corporate tax (CIT)	0
Min Individual CGT (for crypto)	0
Max Individual CGT (for crypto)	0
Wealth tax Min	0
Wealth tax Max	0

According to GSL (11) there is no CGT in Bahrain and no PIT except social contributions for employed individuals. Based on PWC taxsummaries (12) there is no ordinary CIT in the country and all entities except Oil companies pay 0%. Regtechtimes (13) confirms no individual tax from crypto trading.

Links

1)Crime Index by Country 2023 Mid-Year

2)List of countries by intentional homicide rate

3 and 4) Binance, he's teamed up with Bahrain EasyPay for crypto payments. September 22, 2022. Post LinkedIn

5)Bitcoin.com. Bahrain Telecom Operator Starts Accepting Crypto Payments. Terence Zimwara. December 18, 2022. Article

6 and 10)CRYPTO-ASSET MODULE

7)Central Bank of Bahrain Rulebook. CRYPTO-ASSET MODULE. PDF-file

8)Monbaq. Bahrain: How Is Cryptocurrency Regulated In Bahrain? Nayel AlBorshaid. 08 February 2022. Article

9)FreemanLaw. Bahrain and Cryptocurrency. Article

11)Bahrain tax system - taxation of Bahrain's companies and individuals: VAT, income tax, and capital gains. Tax treaties of Bahrain. Article

12)PWC. Bahrain Overview.

13) Regtech. Cryptocurrency in Bahrain. A fresh new perspective. Tanya Parkhi. May 16, 2022. Article

Articles

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intro

Bahrain is a promising tax haven for crypto investors, with a small population located in the Middle East.

Security level

According to our rating, Bahrain is a safe place. The jurisdiction has 75.8 points (from 100) for safety in Numbeo crime rating (1). The homicide level (2) is 0.1 per 100,000 inhabitants a year.

Crypto Payments

We need to find out about legal acts allowing crypto payments in Bahrain. Don't hesitate to contact us if you have this information.

Crypto Salaries

We need more information about legal acts that allow crypto salaries in Bahrain. Please get in touch with us with any information about legal actions or cases in this niche.

Legal

The Central Bank of Bahrain (CBB) regulates crypto assets in the country. The regulation Directive is called ”CRYPTO-ASSET MODULE” (6).

Type of license (tag)	Name of license in English	Description of licensed activity
#cryptofund	Crypto Asset Service Category 1	Crypto Asset Service Category 1 includes (i) receiving and transmitting orders and (ii) Providing investment advice about accepted crypto-assets.
#cryptotocrypto	Crypto Asset Service Category 2	Crypto Asset Service Category 2 includes (i) Trading in accepted crypto-assets as an agent; (ii) Portfolio Management; (iii)Crypto-asset custody; (iv)Investment advice.
#cryptotofiat	Crypto Asset Service Category 3	Crypto Asset Service Category 3 includes (i) Trading in accepted crypto-assets as an agent; (ii) Trading in accepted crypto-assets as principal; (iii)Portfolio Management; (iv)Crypto-asset custody; (v) Investment advice.
#wallet	Crypto Asset Service Category 4	Crypto Asset Service Category 4 includes: (i) Operate a licensed crypto-asset exchange; (ii) Crypto-asset custody service.

Mondaq (8) has provided an overview of CBB licensing procedures.

Details

Based on Freemanlaw (9), there are seven types of regulated crypto activities:

The following activities are excluded from regulated crypto-asset services:

-(a) Reception and Transmission of order: -(b) Execution of orders on behalf of clients; -(c) Dealing on own account; -(d) Portfolio Management; -(e) Crypto-asset Custodian; -(f) Investment Advice.

Taxation

Tax name	Index
PIT tax Min	0
PIT tax Max	0
Corporate tax (CIT)	0
Min Individual CGT (for crypto)	0
Max Individual CGT (for crypto)	0
Wealth tax Min	0
Wealth tax Max	0

Links

1)Crime Index by Country 2023 Mid-Year

2)List of countries by intentional homicide rate

3 and 4) Binance, he's teamed up with Bahrain EasyPay for crypto payments. September 22, 2022. Post LinkedIn

5)Bitcoin.com. Bahrain Telecom Operator Starts Accepting Crypto Payments. Terence Zimwara. December 18, 2022. Article

6 and 10)CRYPTO-ASSET MODULE

7)Central Bank of Bahrain Rulebook. CRYPTO-ASSET MODULE. PDF-file

8)Monbaq. Bahrain: How Is Cryptocurrency Regulated In Bahrain? Nayel AlBorshaid. 08 February 2022. Article

9)FreemanLaw. Bahrain and Cryptocurrency. Article

11)Bahrain tax system - taxation of Bahrain's companies and individuals: VAT, income tax, and capital gains. Tax treaties of Bahrain. Article

12)PWC. Bahrain Overview.

13) Regtech. Cryptocurrency in Bahrain. A fresh new perspective. Tanya Parkhi. May 16, 2022. Article