Preface: Registering a company in Bahrain becomes a hassle-free experience when you’re well-versed in the entire incorporation process. Given Bahrain’s reliance on foreign investment and tourism due to limited natural resources, the country warmly welcomes international entrepreneurs, making it an ideal hub for business start-ups.With Fionza Consultants efficient approach, trust our team of experts to guide you seamlessly through the entire registration process. Our commitment is to have your business operationally ready within the specified time frame
Our comprehensive service package covers all your needs for company registration in Bahrain:
- Efficient company registration with the Bahrain Ministry of Industry Commerce and Tourism (MoICT)
- Local company secretary and a registered address
- Streamlined corporate bank account opening
- Annual accounting and tax services.
WHY DO COMPANIES REGISTER IN BAHRAIN?
- The Bahraini government maintains a pro-business commercial environment and supports business start-ups.
- According to the rankings for the Index of Economic Freedom 2022, Bahrain is the fourth freest economy in the Middle East and North Africa (MENA) region and is the 74th freest economy in the world.
- The Kingdom of Bahrain was ranked among the top 20 global economies in attracting direct investment, according to the Financial Times’ Greenfield FDI Performance Index 2021. Bahrain ranked 15th among 84 countries from around the world that were included in the report. The Kingdom also ranked 2nd in the Gulf and 3rd in the Middle East and North Africa (EDB Bahrain, 2022).
- Bahrain has become a country that possesses a modern global economy. It boasts a long track record of economic achievements over the past few decades. Furthermore, the financial services sector in Bahrain has witnessed continuous thriving for over 40 years.
- Bahrain’s financial sector has been selected as the most advanced and secured place in the Arab Gulf, as mentioned in the Global Competitiveness Report of 2019 published by the World Economic Forum. Accordingly, the Kingdom of Bahrain was ranked 4th among 141 countries.
- Ranked 43rd among 190 economies in the ease of doing business report of 2020, Bahrain has also been recognized as a High-Income country by the World Bank and the country’s high income can be attributed to oil and natural gas, aluminum export, and tourism.
- Bahrain is considered one of the most open economies in the Middle East and North Africa (MENA) region. With several free trade agreements, excellent infrastructure, and strong financial institutions, Bahrain is well-positioned to provide traders and investors access to regional and international markets.
- Bahrain is only one of two Gulf Cooperation Council (GCC) member countries to have a Free Trade Agreement (FTA) with the United States. In most sectors, Bahrain permits 100 percent foreign ownership of a business or branch office, without the need for a local partner, and has no tax on corporate income, personal income, wealth, capital gains, withholding, or death/inheritance. Additionally, Bahrain has no restrictions on the repatriation of capital, profits, or dividends.
- After previously ranking 62nd in 2019, Bahrain strengthened business climate conditions and improved to 43rd out of 190 countries in the World Bank’s “Doing Busines 2020” report. The World Bank recognized Bahrain as one of the top 10 most improved economies after implementing the highest number of regulatory reforms, improving in almost every area measured by the Doing Business report.
- Bahrain has climbed by a spot to rank 78th on the Global Innovation Index 2021, which checks the pulse of the most recent global innovation trends.
- Bahrain features the region’s highest internet and social media penetration rates, reaching 99% in 2020, according to government surveys. Bahrain is currently upgrading the internet infrastructure and featured 5G network coverage of 95% in 2020.
- Bahrain has some of the best quality infrastructures in the world, Bahrain ranks first globally in Telecommunication Infrastructure Index (TTI) calculated and published by the United Nations in 2020.
- Bahrain’s economy is the lowest in terms of basic constituent costs. This is an added value for investors, as the rental value of office and industrial space is less than any other country in the Gulf Cooperation Council (GCC). The cost of living is low, which makes the income levels more competitive than all other neighboring countries.
- The Bahraini workforce is characterized by being the highest in the Gulf Cooperation Council (GCC) in terms of educational attainment, skills, and efficiency. This allows investors to reduce the size of the necessary spending to bring in foreign labor.
- Bahrain is a welfare state. Medical care is free and comprehensive for both nationals and expatriates.
- While the Kingdom of Bahrain had ranked first in the Gulf region and sixth in the Middle East in the Environmental Performance Index (EPI) 2016, issued at the World Economic Forum. The quality of air is decreasing ranking Bahrain at the 90th position under the Environmental performance index released by the World Economic Forum in association with Yale University 2022.
WHAT ARE THE BENEFITS OF REGISTERING A COMPANY IN BAHRAIN?
- 100% foreign ownership in most sectors, whether you are an entrepreneur or an established business you can choose your own partner.
- Free-holding of properties for foreigners
- No restrictions on repatriation of capital and profits and no exchange controls
- No excessively strict visa, residence, and work permit requirements to inhibit foreign investors and expats from moving freely in Bahrain
- No free zone restrictions, operate your business in the area that works for you
- Lower operating costs, run your business or corporation for 30% less than elsewhere in the region.
- Transparent regulation and increased stability.
- With business-friendly tax laws of 0% corporate tax rate, you can keep more of your profits.
- Excellent support services from local government authorities
TYPES OF COMPANIES IN BAHRAIN
n Bahrain, you have a variety of business structures to choose from, each with distinct features related to personal liability protection, tax implications, ownership, management flexibility, and compliance requirements. Before we embark on our engagement, Fionza Consultants thoroughly assess your business needs to recommend the most suitable business entity for your operations in Bahrain. Key considerations include your business activity, tax obligations, and the nationalities of shareholders and directors. Our expert consultants will provide detailed information on the requirements associated with setting up these entities.
Foreign citizens can establish various types of companies in Bahrain with 100% foreign ownership, including:
1. Bahrain Shareholding Company (B.S.C.) – Public
- Public limited companies can be publicly listed on stock exchanges.
- Limited liability protection and easier access to capital.
- Requires a minimum of 5 directors and 7 shareholders, with a statutory minimum share capital of BHD1,000,000.
- Mandatory Annual General Meeting and other compliance regulations.
2. Bahrain Shareholding Company (B.S.C.) – Closed
- Closed joint stock companies consist of a minimum of two shareholders.
- Minimum share capital of BHD250,000 (50% to be paid initially at incorporation).
- No requirement for a local director.
- Compliance with Ministry of Industry and Commerce regulations.
3. Will Limited Liability Company (W.L.L.)
- Requires a minimum of 2 and a maximum of 50 partners.
- Minimum share capital of BHD20,000, with no issuance of public shares.
- No requirement for a local resident director.
- Less stringent resolution requirements.
4. Partnership Company
- Formed without limited liability between two or more natural or corporate persons.
- No minimum share capital requirement.
- Must have at least one manager.
- 100% foreign ownership with no need for a local director.
5. Commandite by Shares
- Partnerships with joint and limited partners.
- Minimum share capital of BHD20,000.
- A minimum of three members on the company control board from among the limited partners.
- At least one manager required.
6. Single Person Company (S.P.C.)
- Fully owned by a single natural or corporate person.
- Minimum share capital of BHD50,000.
- No requirement for annual or extraordinary general meetings.
7. Foreign Company Branch
- Established as an operational office, representative office, or regional office.
- Liability is aligned with the parent company.
- Parent company provides a guarantee and appoints a branch manager.
- Adherence to the laws of the parent company in decision-making.
Fionza Consultants offers expert guidance in choosing the most appropriate business structure for your specific needs, ensuring a seamless entry into the Bahraini market.
LIST OF FREE ZONES IN BAHRAIN
Designed strategically, the Free Trade Zones in Bahrain help business investors to experience a specialized infrastructure with world-class facilities. With a multi-modal connectivity route, the destinations help the business investors to carry out their business operations at ease. The Kingdom of Bahrain boasts three Free Trade Zones (FTZs) that include:
BAHRAIN LOGISTICS ZONE (BLZ)
- Bahrain’s Logistics Zone (BLZ) is regulated and managed by the Ports and Maritime Affairs at the Ministry of Transportation and Telecommunications. Located along 1-2 km of land, the BLZ turns out to be an ideal place for a more straightforward and cheaper logistics business. Designed to suit the end-to-end requirements, the BLZ provides tailored solutions satisfying business needs.
BAHRAIN INTERNATIONAL INVESTMENT PARK (BIIP)
- Established in the year 2005, the Bahrain International Investment Park (BIIP) is Bahrain’s flagship site that has been built to attract multinational and export-oriented global businesses. Designed to attract Foreign Direct Investment (FDI), the region of BIIP is one of Bahrain’s free zone that provides multiple business options to foreign investors. The companies located in the BIIP enjoy duty-free access to carry out business operations in the Kingdom of Saudi Arabia, the United Arab Emirates, and Oman.
BAHRAIN INTERNATIONAL AIRPORT (BIA)
- The Bahrain International Airport (BIA) was established in 1927 as the first airport in the Arabian Gulf and has been a magnificent business setup locally for global investors. Located in Muharraq, the island is situated in the northeast of Manama, the capital city. The free zone is maintained by the Bahrain Airport Company (BAC), a wholly-owned subsidiary of Mumtalakat.
- The BIA is one of the critical drives of Bahrain’s economy and is reputed in the aviation and financial center.
ACCOUNTING AND TAX OBLIGATIONS IN BAHRAIN
- Bahraini companies are completely free of taxation except for companies in oil, gas, oil exploration, mining, and refining sectors taxed at 46%.
- Value-added tax (VAT) is imposed on goods and services at a uniform rate of 5%. Financial and insurance services and real estate businesses are VAT exempt. No VAT is levied on food items and education. Oil and gas exploration is also free of VAT.
- Foreign Commercial and residential properties attract 10% Municipal Tax and 2% stamp duty is levied on sales and registration of real estate properties.
- The import duty of 5% is levied on imported goods. Alcohol and cigarettes attract 125% and 100% duty. All imported goods in Bahrain need customs clearance from the Director-General of Customs.
- Bahrain is free of withholding tax, capital gains tax, and payroll tax.
- All companies are required to submit audited financial statements within 6 months of financial year-end and file quarterly tax returns as a formality to show the authorized share capital and any change in the company. Non-compliance with such requirements attract 1% monthly fines.
- Bahrain has a Double Taxation Avoidance Agreement (DTAA) with more than 40 countries motivating foreign entrepreneurs for company formation in Bahrain.
HOW LONG DOES IT TAKE TO REGISTER COMPANY IN BAHRAIN AND OPEN A CORPORATE BANK ACCOUNT?
Experience a swift Bahrain company registration process with Fionza Consultants, completing it within just 10 weeks. Upon receiving the necessary due diligence documents from directors and shareholders, we initiate checks for your preferred company name’s availability and prepare the essential incorporation documents.
Our commitment to convenience extends to providing non-travel solutions throughout the entire company registration process in Bahrain. Once the setup is finalized, we’ll efficiently courier your new company’s documents, including the Certificate of Incorporation and Memorandum of Association, to your chosen address.
Post-registration, Fionza Consultants expedites the process of opening a bank account for your company, typically taking about 4 weeks. Even in this phase, we prioritize non-travel banking solutions for your ease.
Engage with us, and within a brief 14 weeks, your company will be fully established and poised for business in Bahrain. Trust Fionza Consultants for a streamlined and efficient registration journey.
WHAT ARE THE DOCUMENTS REQUIRED TO REGISTER COMPANY IN BAHRAIN?
This is dependent on the type of company intending to be registered. However, the general documentation required does not differ substantially when taking this into consideration.
- Name of the Company
- Notarized passport copies and details of all its managing directors, supervisory directors, and any existing proxy holders
- The company’s registered address details
- Article and memorandum of association
- A description of the company (purpose)/ business plan