Bahrain Plans Trust Law Overhaul to Lure Wealthy Families and Family Offices

"Our trust law we consider to be outdated," Noor bin Ali Alkhullaif, chief executive of the Bahrain Economic Development Board, told AGBI on the sidelines of the Gateway Gulf investor event in Bahrain. She declined to say when the new law would take effect.

The gap Bahrain is trying to close is wide. The UAE is home to 53 percent of family offices in the Middle East and North Africa, against 5 percent for Bahrain, according to a 2024 HSBC report. Bahrain's public finances add urgency to the effort to attract new sources of capital: the kingdom has faced rising debt pressure as oil revenue falls.

Beyond the changes to trust duration and sharia requirements, the draft would clarify licensing, including whether a family office needs a licence depending on how it is structured, and which courts would hear disputes and litigation. Alkhullaif said Bahrain had studied the regimes in Jersey and Guernsey, two established centres for trusts and private wealth, while preparing the proposals.

She said wealthy families were looking for trust management, more professional services and access to international lawyers. "There is a lot of openness by family offices to look into new markets," she said.

The overhaul would build on a dedicated family-office licence that the Central Bank of Bahrain introduced in 2023 for firms providing regulated wealth-management and investment services to multiple families.

The pool of money at stake is large. A UBS survey of 307 family offices this year found the families taking part had combined wealth of $627.4 billion. Gulf financial centres have spent recent years competing for that business, with Dubai's DIFC and Abu Dhabi's ADGM drawing the largest share of family offices relocating to the region.

The revised law is still under government review, and Bahrain has not published a timetable for it to pass or come into force.