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Bahrain as a Base for Tokenized Securities: GCC Market Access Guide (2026)

Bahrain CBB rules for tokenized securities: investment firm categories, accredited investors, GCC fund passporting into Saudi Arabia, and UAE routes.

By Asset Haus ResearchPublished Updated 10 min read

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Bahrain has built a detailed rulebook for tokenized securities. The Central Bank of Bahrain (CBB) covers investment firm licensing, digital token offerings, crypto-asset services and AML/CFT in one rulebook, and it was among the first Gulf regulators to write crypto-asset rules.

Bahrain also applies the GCC fund passporting regime, in force there since 1 January 2025. For fund products, that regime gives a registered route into Saudi Arabia, which has adopted its own implementing rules — but only through a locally licensed agent, and it is not a licence passport for the Bahraini firm itself.

This guide examines the Bahrain framework for tokenized securities offerings aimed at UAE and GCC investors, including a hybrid Bahrain + ADGM structure. Figures were checked against the CBB Rulebook on 14 October 2026.

The Core Regulatory Finding: Investment Firm License Required

The most important point about Bahrain's framework for security tokens: regulated investment services — dealing, arranging, advising, managing or safeguarding — in relation to financial instruments require an investment firm licence under CBB Rulebook Volume 4.

The crypto-asset module (CRA) in Volume 6 covers crypto-asset services. Tokens that are financial instruments follow the investment business route. Confusing the two is the most common mistake operators make.

CBB RulebookModuleApplies to
Volume 4AU (Authorisation)Investment firm licensing, the starting point for security tokens
Volume 6DTO (Digital Token Offerings)Digital token offerings
Volume 6CRA (Crypto-Assets)Crypto-asset services
Volume 7CIUCollective investment undertakings, including GCC fund passporting (CIU-6)
Volume 4FC (Financial Crime)AML/CFT for investment firms

Whether a particular token is a financial instrument, and which module applies, is a classification question for Bahraini counsel.

Investment Firm License Categories

Bahrain's investment firm licences are tiered by activity scope and capital (CBB Rulebook Volume 4, CA-1.2.7, as amended April 2023):

CategoryMinimum capital (BHD)Approx. USDScope
Category 11,000,000~$2,660,000Full scope, including dealing as principal
Category 2250,000 (1,000,000 if safeguarding financial instruments as custodian)~$665,000 ($2.66M as custodian)Broad scope without dealing as principal
Category 325,000, plus liquid funds of 25% of the prior year's operating expenses~$66,500Arranging deals and advising only; must be independent and may not hold client assets

Category 1 and 2 firms must also meet risk-based capital requirements where these exceed the minimum (CA-1.2.2). Category 3 firms are limited to arranging and advising, cannot hold client assets and may not be paid by anyone other than the client (AU-1.1.17 to AU-1.1.18).

For a firm that structures token offerings and advises issuers and investors without handling client money or assets, Category 3 is the usual starting point. Anything involving client assets, dealing or custody needs Category 1 or 2, or a licensed third party.

Fees (AU-6):

  • Licence application fee: BHD 100 (AU-6.1.1)
  • Annual licence fee: 0.25% of relevant operating expenses, with a floor and cap by category — Category 3: BHD 1,000 to BHD 4,000; Category 2: BHD 4,000 to BHD 12,000; Category 1: BHD 6,000 to BHD 24,000 (AU-6.2.3 to AU-6.2.5)

The Accredited Investor Threshold

The CBB defines accredited investors (CBB Rulebook Volume 4, Glossary, as amended July 2022) as:

  • Individuals with a minimum net worth, alone or jointly with a spouse, of USD 1,000,000, excluding their principal residence
  • Companies, partnerships, trusts or other commercial undertakings with financial assets available for investment of at least USD 1,000,000
  • Governments, supranational organisations, central banks and state investment bodies such as state pension funds

Individuals and commercial undertakings may also elect in writing to be treated as accredited investors if they meet at least two of three conditions: significant trading of USD 200,000 or more over the past 12 months, a financial-asset portfolio of USD 500,000 or more, or at least one year in a relevant professional role in the financial sector.

Subscription documents should record which route each investor uses and keep the supporting evidence.

Investor Access Routes to the UAE and Saudi Arabia

Route 1: UAE Domestic Fund Passporting (for UAE-domiciled funds)

Since March 2019, the UAE's securities regulator (then the SCA, now the Capital Market Authority), the DFSA and the FSRA have operated a passporting arrangement for UAE-domiciled funds. An authorised firm notifies its home regulator and can then promote a domestic UAE fund to qualified investors in the other UAE jurisdictions named in its notification.

The arrangement does not cover funds domiciled outside the UAE. It helps a Bahrain-based sponsor only if the product is an ADGM or DIFC fund — which is one reason for the hybrid structure below.

Route 2: GCC Fund Passporting

The GCC regime is a product registration for investment funds, not a licence passport for firms (status checked 14 October 2026):

  • Framework. The GCC Committee of Heads of Financial Market Authorities approved the fund passporting regulations in November 2024. A passported fund is entered on the registers of both the home and host regulators.
  • Bahrain. In force since 1 January 2025. CBB Rulebook Volume 7, CIU-6.1 (added April 2025) requires operators of Bahrain-domiciled CIUs to apply through the prescribed form. Operators of other GCC funds offered in Bahrain need home-regulator approval and a designated placement agent.
  • Saudi Arabia. The CMA Board adopted its Cross-Border Passporting Guide for Investment Funds by Resolution 1-46-2025 dated 23 April 2025, published on 3 June 2025. A GCC fund is offered in the Kingdom through a CMA-licensed capital market institution acting as agent. The agent files a notification, pays the passporting fee and keeps a local unitholder register. Passported private funds may be placed only with qualified and institutional investors.
  • Other GCC states. We have not confirmed implementing rules for Kuwait, Oman, Qatar or the UAE from primary sources. Check with each regulator before planning distribution there.

What this means: a Bahrain-domiciled fund can be passported to Saudi Arabia, but it is still offered there through a CMA-licensed agent and within the investor limits above. The passport covers fund units only. It does not let the Bahraini investment firm market non-fund tokenized securities in the Kingdom. See our Saudi Arabia tokenization guide for the onshore routes.

Route 3: Foreign Fund Promotion in Onshore UAE

For foreign funds marketed to onshore UAE investors outside ADGM and DIFC, the SCA's foreign-fund promotion rules (Decision No. 02/RM of 2023) required registration and a UAE-licensed promoter. From 1 January 2026 the SCA became the Capital Market Authority under Federal Decree-Law No. 32 of 2025, and firms have a one-year transition to regularise their status under the new capital-markets law. Confirm the current promotion rules with UAE counsel.

The Hybrid Bahrain + ADGM Structure

For tokenized securities aimed at both UAE and GCC investors, some sponsors combine two regulated entities:

Bahrain investment firm handles:

  • Arranging and advising on the offering (Category 3 scope), or a wider scope under Category 1 or 2
  • Compliance with any applicable digital token offering requirements in the CBB's DTO module
  • Distribution of fund products to GCC investors via GCC passporting, where the product is a Bahrain-domiciled fund

ADGM entity with an FSRA Financial Services Permission handles:

  • Arranging or advising for UAE investors within its permissions
  • Access to ADGM professional clients, under the FSRA's client-classification rules (COBS Chapter 2)
  • Where an ADGM fund is used, promotion under the UAE domestic fund passport

The issuer is a separate decision from both regulated entities. Our ADGM tokenization structures guide shows how to map the issuer, permissions and investor journey before choosing vendors.

What it costs

Regulator fees and minimum capital are set out above for Bahrain. ADGM fees and capital depend on the permissions granted and are set in the FSRA FEES and PRU Rulebooks, which were amended for virtual-asset activities in June 2025. Professional fees, staff and systems usually exceed the regulator fees. We do not publish all-in cost estimates; scope them against current rulebooks with counsel.

AML/CFT Requirements

Both the CBB (FC module of the relevant volume) and the FSRA (AML Rules) run detailed AML/CFT frameworks. For tokenized securities:

  • Customer due diligence: risk-based CDD, including beneficial ownership identification
  • Travel Rule: required for virtual-asset transfers under each regulator's rules
  • Sanctions screening: UN lists plus national lists in each jurisdiction
  • Transaction monitoring: proportionate to the business, usually automated
  • Record keeping: retention periods as set in each regulator's AML rules

Timing

The CBB does not publish a standard processing time for investment firm licences, and the FSRA does not guarantee FSP timelines. ADGM's RegLab grants a restricted permission valid for up to two years for genuinely novel models, but it is a testing route, not a shortcut to a full licence. Plan the sequence — entity, bank account, application, regulator questions — rather than a launch date.

For Operators Considering Bahrain

Bahrain offers:

  • Regulatory completeness: investment firm, DTO, crypto-asset and stablecoin modules in one rulebook
  • GCC fund distribution: GCC passporting in force since 1 January 2025, with a route into Saudi Arabia through a CMA-licensed agent
  • Proportionate capital: Category 3 minimum capital of BHD 25,000 for arranging and advisory firms that do not hold client assets
  • FATF status: Bahrain is not on the FATF list of jurisdictions under increased monitoring published on 19 June 2026

Bahrain combined with ADGM covers regional and UAE institutional distribution, provided each entity stays within its permissions. Our legal setup coordination maps those permissions with qualified counsel in both jurisdictions, and the legal perimeter memo is a starting template.

Sources

This article is for informational purposes only and does not constitute legal advice. Regulatory frameworks change; verify current requirements with qualified legal counsel in each jurisdiction before proceeding. Asset Haus provides tokenization infrastructure and structuring support and coordinates legal setup with qualified counsel.

For the regional market picture, see the GCC tokenization market report and the MENA tokenization regulations guide.

Expert review

Written by Asset Haus Research

Reviewed by Omar Al-Farsi, Head of Legal (MENA). Review covers regulatory accuracy; this article is not legal advice.

15+ years of MENA corporate law; licensed in the UAE, Bahrain and Saudi Arabia; advises on GCC structuring and licensing.

Profile and articles: Omar Al-Farsi

Tags

  • Bahrain
  • CBB
  • GCC
  • tokenized securities
  • ADGM
  • UAE
  • passporting
  • RWA
  • investment
  • licensing
  • 2026

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