Schuettler, who lost his first three matches of the year before reaching the quarter-finals in Rotterdam two weeks ago, edged a tight first set against the qualifier.
But the 164th-ranked Kohlschreiber made the only break to take the second and, rallying steadily from the baseline, repeated the feat in the decider.
"I thought if I can hold my serve long enough I would get my chances on his serve because he's not the best server in the world," said 20-year-old Kohlschreiber, who travels without a conventional coach and is satisfied with the encouragement he receives from his girlfriend.
"At 5-4 in the second and the third sets he made a double-fault and then one more easy mistake each time."
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Bahrouzyan, the leading player in the United Arab Emirates, failed to win more than two consecutive points at any stage of the match and served eight double-faults.
Kuwaiti wild card Mohammed Al Ghareeb came tantalisingly close to becoming the first player from the Middle East to win a match on the ATP Tour.
Without a ranking, he held a match point in the final set tiebreak before losing 7-6, 3-6, 7-6 to Dutchman Dennis Van Scheppingen.
