BCA Middle East
BCA Middle East
Company Formation in Bahrain for Foreign Investors
Interest in Bahrain is skyrocketing. Setting up a company in Bahrain has many advantages, including a competitive tax regime, strategic location and a business-friendly environment, making it an ideal hub for businesses looking to expand in the Middle East and beyond.
The process of setting up a company in the Kingdom of Bahrain can vary depending on different factors, such as type of shareholders and business activities. However, here are some general steps that are typically involved in setting up a company in Bahrain:
KYC
To ensure compliance with relevant regulations, kindly furnish us with a copy of your passport / ID. Alternatively, if you intend to establish a subsidiary of an existing company, please provide copies of the corporate documents of the parent company. The clearance of documents may take up to two (2) business days.
Choose a business activity and trade name
Choose the business activity that you want to engage in and select a unique trade name for your company. The company name will be approved by the Ministry of Industry, Commerce and Tourism (MOICT).
Sign tenancy agreement
We offer office spaces that meet the requirements of obtaining approval from the Municipality.
Sign the Memorandum
The Memorandum shall be signed in front of a notary, but there is no need for your physical presence. You can authorize our representative to sign on your behalf through a Power of Attorney, and the entire process can be completed remotely.
Apply for a bank account
Apply for a corporate bank account with a local bank, such as Ahli United Bank, Bank of Bahrain and Kuwait, BNP Paribas and Bahrain Development Bank.
Plan your visit to Bahrain
We will complete all procedures such as bank account authorisation, medical checks and obtaining a Bahraini identity card.
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Why do business in Bahrain?
Bahrain is a small but dynamic country in the Middle East that offers many advantages for businesses looking to expand in the region. It is strategically located between the major markets of the GCC, offering easy access to Saudi Arabia and other countries in the region. Bahrain also has a well-developed infrastructure, including modern airports, seaports, and road networks, which facilitate transportation and logistics.
Bahrain also has a competitive and low-cost tax regime that makes it an attractive destination for foreign investment. The country offers a range of tax incentives and exemptions, such as no corporate or personal income taxes and no withholding taxes. Moreover, Bahrain’s regulatory framework is transparent and efficient, providing a conducive environment for businesses to operate with ease.
Finally, Bahrain is a cosmopolitan and multicultural country that offers a high quality of life for expatriates and their families.
Bahrain also has a competitive and low-cost tax regime that makes it an attractive destination for foreign investment. The country offers a range of tax incentives and exemptions, such as no corporate or personal income taxes and no withholding taxes. Moreover, Bahrain’s regulatory framework is transparent and efficient, providing a conducive environment for businesses to operate with ease.
Finally, Bahrain is a cosmopolitan and multicultural country that offers a high quality of life for expatriates and their families.
Documents required to establish a company in Bahrain
The documents required to form a company in Bahrain may vary depending on the founder and planned business activities. Nevertheless, we have prepared a list of common documents required to set up a company in the Kingdom of Bahrain.
Required Documents for Individual shareholder:
- Passport / ID copies of all shareholders and directors are required for registration.
- Power of attorney (POA): A power of attorney is required if the business owner is not present in Bahrain for company setup.
- Bank reference letter: A bank reference letter is required to confirm the financial standing of the business owner and shareholders.
- Bank statement for the past 6 months: required for all shareholders.
Required Documents for Corporate shareholder:
- Certificate of incorporation: A certificate of incorporation is required from the parent company.
- Extract from the register of companies
- Articles of association of the parent company
- List of shareholders of the parent company
- Board resolution: A board resolution from the parent company authorizing the establishment of a subsidiary in the UAE is required. We will provide the draft.
- Passport / ID copies: Passport copies of all shareholders and directors.
- Bank reference letter: A bank reference letter is required to confirm the financial standing of the parent company and shareholders.
- Bank statement for the past 6 months of the parent company;
- Audited financial report for the past financial year;
- Power of attorney (POA): A power of attorney is required if the business owner is not present in the UAE and needs to appoint a representative to act on their behalf.
Ready to take the first step towards your company in Bahrain? Just fill out the application form
How companies are taxed in Bahrain?
The current corporate tax rate in Bahrain is 0%. However, companies in certain sectors (such as financial services and oil and gas) may be subject to a corporate tax on their profits.
- 0%Corporate tax rate in Bahrain
- 0%Withholding tax on dividends, interest and royalties
- 10%VAT on sales within the territory of Bahrain
What we do
We assist in the formation of companies in Bahrain, including advising on the legal structure, drafting and reviewing legal documents and registering the company with the relevant authorities.
We offer comprehensive support for opening a bank account in Bahrain, which includes assisting with the completion of all necessary forms, filing an application and introducing clients to a bank officer for a seamless account opening process.
We provide expert guidance to businesses to ensure compliance with all relevant tax and regulatory requirements in Bahrain, helping them to align their operations with local laws and regulations to avoid any potential legal issues.
We provide assistance in drafting, reviewing, and negotiating a wide range of commercial contracts, ensuring that our clients' interests are protected and all contractual obligations are clearly defined and agreed upon.
We assist companies in protecting their intellectual property rights, including registering trademarks, copyrights, and patents in Bahrain.
We provide expert guidance to expats and investors who own property in Bahrain on the legal procedures involved in transferring the property as an inheritance, ensuring a seamless and hassle-free process for our clients.
FAQ: Doing business in Bahrain
What is the legal system in Bahrain?
The legal system in Bahrain is a mix of Islamic law, civil law, and common law.
When incorporating a company in Bahrain, foreign investors may choose to adopt the common law system in their company's articles of association.
However, it is important to note that the overall legal framework in Bahrain is based on Islamic law and civil law principles. Therefore, businesses operating in Bahrain should also be familiar with these legal frameworks and ensure compliance with all relevant laws and regulations.
When incorporating a company in Bahrain, foreign investors may choose to adopt the common law system in their company's articles of association.
However, it is important to note that the overall legal framework in Bahrain is based on Islamic law and civil law principles. Therefore, businesses operating in Bahrain should also be familiar with these legal frameworks and ensure compliance with all relevant laws and regulations.
What is the process for setting up a business in Bahrain?
The process for setting up a business in Bahrain involves several steps, including obtaining approval for the proposed company name, preparing the company’s articles of association, submitting an application for registration with the Ministry of Industry, Commerce, and Tourism, and obtaining any necessary licenses and permits. Once the registration process is complete, the company will receive a commercial registration certificate.
How long does it take to register a business in Bahrain?
The registration process for a new business in Bahrain typically takes 3-4 weeks, but it can vary depending on the type of business and the specific requirements of the registration process.
What types of business entities can be registered in Bahrain?
Foreign investors can register a variety of business entities in Bahrain, including limited liability companies, joint ventures, partnerships, and branches of foreign companies. The specific entity that is best for a particular business will depend on factors such as the size of the business, the type of activities it will undertake, and its ownership structure.
Can foreigners own 100% of a business in Bahrain?
Yes, foreign investors can own 100% of a business in Bahrain, with no requirement for local ownership or sponsorship. Bahrain's government is actively seeking to attract foreign investment, and the legal framework is designed to support foreign businesses.
What is the minimum capital required to start a business in Bahrain?
There is no minimum capital requirement to start a business in Bahrain, but some industries may have specific capital requirements. The amount of capital needed will depend on the type of business and its projected expenses.
What are the banking and financial services available in Bahrain?
Bahrain has a well-developed banking sector and is known as a regional financial hub. There are several local and international banks operating in Bahrain, offering a range of banking and financial services, including commercial and retail banking, investment banking, and asset management.
What is the process for opening a bank account in Bahrain?
The process for opening a bank account in Bahrain involves providing identification documents and other information to the bank, as well as completing the necessary forms and signing an account agreement. The specific requirements may vary depending on the bank and the type of account being opened.
What is the process for importing and exporting goods in Bahrain?
Importing and exporting goods in Bahrain requires compliance with local customs regulations. Importers must obtain an import license from the Ministry of Industry, Commerce, and Tourism, while exporters must obtain an export declaration. Additionally, there are various taxes and duties that may apply to imported goods.
What is the tax system in Bahrain?
Bahrain has a very competitive tax regime, with no corporate income tax or personal income tax. However, there is a 5% value-added tax (VAT) that was introduced in 2019.
What is the process for filing taxes in Bahrain?
The process for filing taxes in Bahrain involves submitting tax returns to the National Bureau for Revenue (NBR) and paying any applicable taxes. Businesses are required to maintain accurate records and comply with tax laws and regulations.
What is the deadline for filing tax returns in Bahrain?
In Bahrain, businesses are required to submit an estimated income tax statement no later than the 15th day of the third month of the taxable year.
What is the process for registering for VAT in Bahrain?
The process for registering for VAT in Bahrain involves submitting an application to the National Bureau for Revenue (NBR). Businesses with an annual turnover exceeding BD 37,500 (approximately USD 100,000) are required to register for VAT.
What are the financial statements requirements in Bahrain?
Businesses in Bahrain are required to maintain accurate financial statements. The financial statements must be prepared in accordance with International Financial Reporting Standards (IFRS) and must include a balance sheet, income statement, cash flow statement, and notes to the financial statements.
Financial statements must be prepared annually and must be audited by a licensed auditor in Bahrain. The auditor must provide an audit report that expresses an opinion on the accuracy of the financial statements.
Financial statements must be prepared annually and must be audited by a licensed auditor in Bahrain. The auditor must provide an audit report that expresses an opinion on the accuracy of the financial statements.
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