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The agreement signed in Washington on April 17 between Bahrain’s Minister of Finance and National Economy Shaikh Salman bin Khalifa Al Khalifa and Swiss Federal Councillor Guy Parmelin comprises 33 articles divided into six chapters covering definitions, investment protections, dispute settlement and final provisions, a royal decree cited by News of Bahrain stated. It seeks to boost economic cooperation and create a supportive environment for sustainable growth between the two countries. The document reached lawmakers under Royal Decree No. 30 of 2026 after the government completed its internal review process.
Neither party could expropriate foreign-owned assets unless the action served a public purpose, adhered to legal procedures and avoided discrimination, according to the pact detailed in the News of Bahrain report. Investors facing such measures would receive compensation based on the market value of their investment immediately before the seizure, plus interest, payable without delay and transferable abroad. The treaty covers shares, real estate, business interests, intellectual property rights, contracts and other qualifying assets.
Investors would enjoy the right to transfer profits, dividends, royalties, loan repayments and proceeds from asset sales across borders, subject to relevant financial regulations, the newspaper reported. Disputes must begin with consultations between the parties, and if unresolved within 12 months, affected investors could pursue claims before international tribunals. Arbitration options include rules from the International Centre for Settlement of Investment Disputes, the United Nations Commission on International Trade Law or mutually agreed mechanisms.
Central Bank of Bahrain figures show the kingdom’s foreign direct investment stock stood at BD17.75 billion at the end of June 2026, up 2 percent year on year, with GCC investors holding 70 percent of the total. A Swiss government statement from the April signing noted that Bahrain had been the sole Gulf Cooperation Council member without such an investment protection pact with Bern. The U.S. Department of State 2026 Investment Climate Statement for Bahrain places total FDI at $47.1 billion in 2025, up from $43.6 billion the prior year, as the kingdom pursues Vision 2030 goals to attract $2.5 billion in annual inflows.
The treaty would remain in force for an initial 10 years and automatically renew unless one side provides 12 months’ written notice of termination, News of Bahrain reported. Investments established before any termination would continue to receive protections for an additional 10 years. The pact would enter into effect 30 days after both countries exchange notifications confirming completion of their respective legal requirements.
Switzerland’s updated negotiating template, first applied in its agreement with Indonesia that took effect in 2024, underpins the Bahrain deal with enhanced provisions limiting arbitral discretion and incorporating clauses on regulatory powers, corporate social responsibility and anti-corruption efforts, a Swiss federal authorities release indicated. Bahrain’s move aligns with broader reforms to streamline procedures and reinforce its position as a regional investment hub in finance, manufacturing and technology sectors.
