Bahrain, a small island nation covering an area of approximately 765 square kilometers in the Arabian Gulf, has traditionally been reliant on state owned enterprises as the primary driver of its economic growth. However, that’s beginning to change as government efforts to reduce hydrocarbon dependency and promote foreign direct investment (FDI) are resulting in rising levels of investor confidence and increased private sector participation in high potential sectors such as financial services, ICT, tourism and logistics.
This is opening up lucrative opportunities for investment and creating the ideal setting for foreign businesses to thrive.
Company formation in Bahrain is a straightforward and efficient process, thanks to the presence and support of various government initiatives and services such as the Bahrain Economic Development Board (EDB) and the Ministry of Industry and Commerce (MOIC). The steps for company registration in Bahrain can vary depending on the nature of your business and its ownership structure.
One of the draws of business setup in Bahrain is the ability to obtain a corporate bank account which is by far the easiest out of all the GCC countries. Bahrain business maintenance requirements are also far less onerous on business owners as Bahrain has relaxed minimum stay requirements for business visas.
CHOOSING THE RIGHT LEGAL ENTITY IN BAHRAIN
The With Limited Liability (WLL) company and free zone company are the most popular options for setting up a company in Bahrain. However, your decision should be informed by factors such as the level of liability you're comfortable with, the amount of capital you plan to invest, the number of partners, and your business objectives. The following are the available options:
After understanding and selecting the right entity type for your business in Bahrain, you will need to also follow the following process/ steps to complete the incorporation in Bahrain.
Security clearance
The next step is to get the security clearance approval. This involves drafting of initial KYC documents and submission of identification documents of all company signatories to Nationality Passport and Residency Affairs (NPRA) for approval. You’ll require the following documents:
Passport copies
Signed KYC forms
Signed engagement letter
Authorisation letter
Company name reservation
You’ll need to submit three proposed company names that comply with Bahrain's naming regulations, ensuring they are distinctive, not misleading, and do not infringe upon any existing trademarks or intellectual property rights.
Prepare the Memorandum and Articles of Association
These should be drafted in line with the chosen business structure and attested by a public or private notary. These documents should clearly define the company's structure, objectives, governance, and operating procedures.
Open company bank account
Choose a suitable bank, gather required documents like the Memorandum and Articles of Association, and visit the bank with these documents. Complete the application form, make an initial deposit, designate authorised signatories, and undergo compliance checks. Once approved, you'll receive your account details, which you can use to deposit initial funds and activate the account.
Get final approval
Final approval from the Ministry of Industry and Commerce (MOIC) is the last crucial step in setting up your business in Bahrain. This approval ensures that your business complies with all relevant regulations and that your application has been thoroughly reviewed. You’ll have to submit your notarised memorandum and bank certificate and then once you receive this approval, you're ready to operate your business legally in Bahrain.
Bahrain’s economy is relatively untapped when compared to other already well-developed regional business hubs like Dubai, Abu Dhabi or Doha.
Its strategic location in the Gulf, with a causeway connecting the island to the eastern province of Saudi Arabia, provides the same easy access to other GCC and global markets but at a fraction of the cost, with comparatively lower setup costs and overhead expenses such as office rentals and labour costs.
As with its other GCC neighbours, it boasts an open economy with minimal restrictions on foreign ownership. There are also no taxes on income, capital gains, or estates in the vast majority of situations other than for companies that operate in the oil and gas sector. There is VAT in Bahrain at a rate of 10%.
The presence of three free trade zones is also a significant draw. These hubs offer purpose-built environments designed to simplify the business setup process, with streamlined regulations, tax incentives, and a wealth of support services. The Bahrain Logistics Zone, for instance, focuses on logistics and distribution, making it an ideal location for companies seeking to establish regional distribution centres. The Bahrain International Investment Park (BIIP) is tailored for light and medium industries, while the Bahrain International Airport Free Zone (BIAF) is strategically positioned to facilitate air cargo, logistics and international trade operations.
In these free trade zones, investors can take advantage of efficient customs procedures, duty exemptions, and access to well-established infrastructure. Although, the free zones in Bahrain are slightly differing from those in other regions, as they require specific activities to be allowed in the free zone. For example, BIIP is an industrial area and BIAF is exclusively for cargo activities.
Bahrain's economic landscape is evolving rapidly, creating a range of promising investment opportunities. As the government actively reduces reliance on hydrocarbons and promotes foreign direct investment (FDI), several sectors have emerged as key growth areas.
At Sovereign PPG, we have 12 years of experience in the corporate services industry in Bahrain, as well as decades in the UAE and wider GCC and have developed key industry connections to help facilitate the successful incorporation of your business.
We can help you with business setup in Bahrain, providing a comprehensive suite of services that streamline the company setup process. We will offer insights on the best business structure that aligns with your business objectives, secure licences, navigate documentation, and liaise with government authorities on your behalf, eliminating bureaucratic hassles and saving you valuable time. We can further assist with establishing a corporate bank account, managing payroll services, and providing essential guidance on compliance matters.
If you need assistance with this or any other related onshore or offshore company setup, restructuring, local partner or PRO support matter in Bahrain, Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or KSA, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.
Liquidation of a company and deregistering with the local authorities and liquidator
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