Whether it’s GDPR or the similar global and regional regulations that followed, startups must understand and comply with complex data protection laws. Failure to do this properly means fines, reputational damage, and, potentially, the business itself being closed.
This article takes all of our experience at Crown Records Management to explore steps that you can take to ensure your Bahrain-based startup or small business is (and remains!) data compliant
“What do you mean by data compliance?”
This is the first and most obvious question. The answer?
“Ensuring that your company’s data practices adhere to data regulations.”
In Bahrain, data protection and privacy are governed by the Personal Data Protection Law (PDPL), which aims to safeguard personal data. Non-compliance with these laws can result in hefty fines, operational restrictions, and damage to your business reputation in a competitive market like Bahrain’s.
For startups and smaller businesses, data compliance was sometimes overlooked in favor of growth. In Bahrain’s rapidly digitalizing market, the risks of non-compliance are too significant to overlook anymore. Not only could your startup face financial penalties, but customer trust would also be on the chopping block—and that trust is what drives future growth.
While Bahrain’s Personal Data Protection Law (PDPL) is a key regional regulation, and the EU’s General Data Protection Regulation (GDPR) is one of the most well-known globally, it’s important to remember that there are many other data privacy laws worldwide. The California Consumer Privacy Act (CCPA) in the U.S., LGPD in Brazil, and PIPEDA in Canada all have their own data protection requirements, for example. If you’re operating in or aim to operate in multiple markets, you need to be mindful of these, but it’s also worth noting that GDPR forms the “gold standard” of data privacy regulation.
This means its principles are heavily replicated in other national or transnational regulations. “Data localization” (ensuring that copies exist within the national jurisdiction), ensuring the “explicit consent” of the customer/data provider, etc., are generally found in all legislation of this type as of 2024.
What are the key regulations around the world?
While global regulations like the GDPR or CCPA are important for companies operating internationally, Bahrain’s PDPL governs how businesses handle personal data within Bahrain. Companies trading globally should also be mindful of international laws that apply to their operations, ensuring compliance with both local and international regulations:
- GDPR (Europe): The GDPR governs how companies collect, store, and process personal data of EU residents. Non-compliance can result in fines of up to 4% of annual global turnover or €20 million, whichever is higher.
- CCPA (California): The California Consumer Privacy Act provides residents of California with the right to know what personal data is collected, request its deletion, and opt out of its sale. It also imposes hefty fines for violations.
- PDP/DPDP (India): India’s Digital Personal Data Protection Act regulates how companies handle personal data in India. Having entered force in 2024, it mirrors many provisions of the GDPR, with some regional adjustments.
- LGPD (Brazil): Brazil’s Lei Geral de Proteção de Dados is similar to the GDPR and applies to businesses processing personal data in Brazil.
- PIPL (China) The Personal Information Protection Law harmonizes China’s data protection practices with global standards like GDPR, ensuring a consistent framework for businesses operating in China.
For Bahrain-based startups with global reach, it’s essential to stay compliant with both local and international data protection laws. Each jurisdiction has its own set of requirements, and non-compliance can lead to financial penalties and reputational damage.
What can I do to ensure compliance, given I’m a small organization/startup?
If you’re resource-strapped it’s understandable that a maze of impenetrable legalese will seem daunting, but it’s also very achievable. Remember! While the legal language may seem scary, a lot of data-privacy compliance is essentially just common-sense best practice for in a digital age for sensitive information:
- Data Mapping: Begin by understanding what you collect, where it’s stored, how it’s used, and who has access to it. The main output here is risk assessment, you want to audit potential risks or vulnerabilities in your data-handling processes. You can do this manually as a startup: e.g. seeing how your financial statements are shared by email, looking at what you’re printing on a regular basis, or alternatively, there are tools that can be used.
- Develop a data-privacy policy: Sometimes called, or part of an “Information Governance Policy”. This will depend slightly on the type of business you’re running (e.g. B2B/B2C). However, every startup needs a data privacy policy that explains how they handle personal data, including how they collect, store, and protect it. This should also include a plan for responding to data breaches, which is required by several regulations, including GDPR.
- Data Minimization: Collect only the data that is necessary for your business operations. Excessive data collection increases your risk and makes compliance more difficult (it also increases your cloud-based overheads and carbon footprint!). By practicing data minimization, you can simplify compliance and reduce risk in one fell swoop.
- Security measures: This one is more basic and should be being done already. Many regulations require companies to implement strong security measures to protect personal data. Encryption, access controls, and secure cloud storage are some of the key measures to consider. Learn more about data security best practices.
- Employee training: Perhaps the most important step on this list: Compliance isn’t just an IT issue. Everyone in the company needs to understand the importance of handling data correctly. Regular employee training can prevent unintentional violations of data regulations and reinforce best practices for data privacy. Making it part of onboarding employees as you grow can also make sure you’re doing what you need to do from the moment they start working.
What are the costs of non-compliance?
Here’s why the cost of non-compliance can be far more damaging than just a fine:
Reputational damage: Data breaches or non-compliance issues can be very public and damaging to a company’s reputation. As stated at the beginning, trust is a critical component of growth (especially for startups) and any indication you’re not doing your due diligence as an organisation can result in the loss of customers.
- Operational disruptions: Being found non-compliant can also lead to operational disruptions. Regulators may impose restrictions or require companies to implement corrective measures. Costs of this aside, it greatly hampers any startup plan.
- Legal costs: In addition to fines, non-compliance can also result in civil suits (something that is becoming more common now legal precedent is being set down).
For startups in Bahrain, data compliance is now mandatory. Although some initial grace periods for enforcement exist, especially for smaller companies, the Bahraini government has made it clear that compliance with the PDPL will be strictly enforced, and non-compliance could result in fines, operational limitations, and legal proceedings. It’s essential to prioritize data protection from day one. Audit or run a data protection impact assessment to determine how you measure up to compliance
Ready to ensure your startup is data compliant?
Start today by auditing your data practices and implementing best practices for privacy and security. If you need help navigating the complexities of data compliance, reach out to our team at Crown Records Management for expert guidance tailored to your business. Contact us now to get started on the path to compliance!
