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Company Formation in Bahrain

  • Post category:Formation

For the past few years, it has been observed that Bahrain has become a popular destination for investors, especially, by the time there is an amendment in the laws from the Bahrain government that allows 100% ownership for investors in various business sectors.

Such investment opportunities in the Kingdom of Bahrain consisting of excellent infrastructure, government stability, and adequate policies have now started gaining the attention of foreign investors in terms of company formation in Bahrain.

How to register a Company in Bahrain?

Company formation in Bahrain undergoes several phases which require acquiring permits from government sectors and other regulatory agencies. Following steps should be considered for registering and starting a business in Bahrain:

1. Which Legal Structure to be adopted for Business?

At the initial stage of company formation in Bahrain, the business owner’s biggest concern should be on what type of legal structure to select, as it will affect the nature of the business.

Below are the types of legal structure in Bahrain that a business owner should understand before starting a business/company formation in Bahrain:

Single Person Company

A single liability company for sole proprietors where a company is managed by only one shareholder.

With Limited Liability (W.L.L)

The formation of W.L.L requires a minimum of at least two shareholders along with two directors. Moreover, a local manager acting as company secretary is also required. It is not permissible for W.L.L to engage in any business activities for third parties in the insurance or banking sectors.

Bahrain Shareholding Company (BSC)

For Bahrain Shareholding Company (BSC), there is a requirement of at least two shareholders along with a resident manager, which is similar to that of W.L.L. It refers to the Investors interested in large-scale projects and is known as a public joint-stock company. In BSC, there are at least three members of the Board of Directors. A company can now be listed on the stock exchange, and shares can be sold publicly.

2. Guidelines in Selecting a Company Name

When it comes to company formation in Bahrain, investors/business owners should follow the guidelines as proposed by the Ministry of Industry & Commerce (MOIC) that make it easy in company name choice. Business owners/investors can propose four company names, and when the names violate the guidelines of MOIC, they will be rejected. Investors now need to propose another four names from the beginning.

3. Commercial Registration Documentation

The third step for company formation in Bahrain is about documentation required while registering a business. There is a different requirement of document submission for both individual investors and companies. The commercial registration papers are prepared at Bahrain Investors Center (BIC) for the individual establishments. The commercial registration papers are prepared at the Ministry of Industry and Commerce Registration Directorate (MOIC) for the Organizations/ Companies.

4. Obtain License and Authorization

Once the commercial registration documentation is approved by MOIC to start the business operation, then the companies must obtain approvals and licenses from regulatory agencies and government bodies in Bahrain.

Why is it Beneficial to Register a Company in Bahrain?

There are various opportunities for investors when they think of company formation in Bahrain in terms of outstanding infrastructure and business environment. It has been highly recommended for doing business in Bahrain because of factors like a competitive market, low operating cost, and worldwide easy access to trade activities.

Company formation in Bahrain allows the business to expand business in other GCC regions. Increased stability is offered to companies as they follow flexible rules and regulations. Individuals are allowed for 100 & foreign ownership in most of the sectors. If compared to other GCC regions, the operating cost in Bahrain is comparatively low for the business owners/investors. Access to modern financial services has been made easy for businesses and investors.

Government agencies provide flexibility for foreign investors and do not interfere in their operations. However, to enhance business opportunities in various sectors, the government authorities provide full support to the companies. The import and export tariffs are very low for the companies operating from Bahrain.

What Attracts investors for doing Business in Bahrain?

Investors/ Business Owners feel more satisfied as compared to other GCC regions when it comes to company formation in Bahrain. Through Bahrain, the visa policies and access to other Middle East countries are very easy.

It is quite clear that the cost of company formation in Bahrain is relatively low as compared to other GCC countries, which also include the rent of industrial land and office rent. It is a very fast-paced process to set up a company in Bahrain or to establish a branch office. Approximately 50% of expatriates are of multicultural nationalities.

Company formation in Bahrain is profitable for business owners, especially those who belong to the trade sector, as it enhances their business through the Persian Gulf. Other sectors like construction, aluminum production, oil, and finance are the major source of economic stability in Bahrain.

There are no special taxes associated in Bahrain like property tax, corporation tax, withholding tax, gift tax, etc. Only major sectors like oil production, refineries, oil industry, and distribution companies are liable to pay the taxes.