Bahrain has halved the fees for foreign workers, giving a massive boost to small and medium enterprises, a report said.

The proposal to reduce the BD10 ($26.36) Labour Market Regulatory Authority (LMRA) levy on businesses was approved by the Cabinet yesterday (August 18), reported the Gulf Daily News, our sister publication.

It agreed to cut the monthly fee per expatriate to BD5 for companies who employ less than five workers.

"Small business entities currently constitute 78 per cent of the total number of businesses operating in Bahrain that employ less than five employees and they will benefit from this reduction," said Minister of State for Information Affairs and government spokeswoman Sameera Rajab.

"This is now a new decision that is approved and waiting to be implemented."

She was speaking during the weekly Cabinet press conference held at the Gudaibiya Palace.

She said a proposal was presented by Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa regarding the LMRA fees.

Companies are supposed to pay the monthly levy for each expatriate they employ, but the tax has been waived since April 2011 to offset the financial impact of the unrest on the private sector.

The government initially suspended the fee for six months, but later extended the grace period for up to a year to help revive the economy.

However, it wanted to reintroduce the charge, but traders demanded its extension saying it would negatively affect business as some were still struggling to stay afloat.

The LMRA fees fund Tamkeen, which invests in the Bahraini workforce, trains them, creates jobs and provides social support. – TradeArabia News Service