The Kingdom of Bahrain witnessed a sea of amendments in the year 2020 to their Commercial Companies Law under Bahrain Decree-Law No. 21/2001 on the Issuance of the Commercial Companies Law. One of the more unique (and much needed) additions was with respect to officially recognizing ‘Non Profit Companies’ (NPC) as a legal corporate entity. This update to Bahrain Decree-Law No. 21/2001 been passed under Bahrain Decree-Law No. 28/2020 Amending some provisions of Commercial Companies Law, and its implementing guidelines have been passed under Bahrain Resolution No. 62/2021.

Up until this recent amendment was passed, the concept of NPCs was not officially recognized under the laws of Bahrain. Individuals would instead have to come together as one of the other for-profit types of corporate entities that are recognized under Bahrain Decree-Law No. 21/2001, and declare that they were a not-for-profit organization within their corporate documents and Articles of Association. NPCs did not have specific rules governing them under Bahrain Decree-Law No. 21/2001. This practice consequently led to a lot of chaos and mismanagement.