Company Formation In Bahrain
Learn the best ways of starting a business in Bahrain, different types of business structures in Bahrain, and what is required to start a business in Bahrain.
- We will help you register your company in Bahrain
- We will help you look for and choose a suitable partner or sponsor from Bahrain
- We will help you set-up your business and associated requirements
- We will help you register for tax and licenses
Find out how to register a company/business in Bahrain in very easy steps. Our comprehensive list of services is here to help you.
The Kingdom of Bahrain is a group of Islands located in the Persian Gulf (southwestern coast) near Qatar and Kingdom of Saudi Arabia. Ever since the discovery of oil in 1932, the main industry has been oil production, which made Bahrain a very wealthy country. Bahrain is an ideal location for those with a strong business mindset, and for those looking for business opportunities to work in the oil and refining sectors.
Apart from the oil and gas, the petrochemical industries are also blooming in the country, along with refining of aluminium, manufacturing and repairing ship etc. As far as the Political system in Bahrain is concerned, it is a Unitary Parliamentary Constitutional System lead by King Hamad bin Isa Al Khalifa.
Helpline Group is a government approved agency with ISO 9001-2008 certification
The company has branches spread across the world. Established in 1998, Helpline Group’s Head Office is in Dubai to serve our special clients in Kuwait and the Middle East region. With a strong clientele base from India, Kuwait and the rest of the Middle East, we currently enjoy a strong presence in these countries, especially in Kuwait.
In terms of finance and commerce, Bahrain holds a significant position among other Gulf Countries, which makes it an ideal choice for investors. Helpline Group will guide you through every step involved in setting up a business, investing in ventures, obtaining necessary and basic licenses and registration and dealing with the taxation laws and regulations in Bahrain.
Company Formation Steps in Bahrain
Finding A Partner
You need partnership and support from a Bahrain citizen to get the fundamental licenses to work in the country. Helpline Group can guide you and help you gain a Bahrain partner.
Business set-up activities in Bahrain may change depending on the industry and type of company. Helpline Group can guide you and help you apply for business set-up.
You may need to apply for additional licenses to begin operations of your business in Bahrain. Helpline Group can guide you and help you get these licenses in Bahrain.
As a comprehensive service and solution provider, Helpline Group is a one-stop destination for all your international business services in Oman and other Gulf countries. As Bahrain has a strong legal and regulatory system, you would need support from a knowledgeable partner in the country to establish and operate your business easily.
Legal Structures of the Company
Before, starting a business in Bahrain, one must know its legal working structure, which has several ways of business incorporation. One of the most common and prevalent ways is to start a “Limited Liability Company”. Except this, one can also go for other legal business structures, discussed further. Company formation in Bahrain by the foreign citizens can be done in the following types of legal business structure.
- Limited Liability Company Formation
- Branch Offices
- Commercial Agencies
- Representative Trade Offices
- General Partnership Company
- Limited Share Partnership Company
- Holding Company
- Joint Venture
Foreign citizens can set up three different types of limited liability companies in Bahrain:
1. Bahrain SPC / The Single Person Company.
A Single Person Company (SPC) is a limited liability company that can be owned and controlled by a single person, including a foreigner. More than just a sole proprietorship, an SPC is an actual company. The Commercial Companies Law of 2001 governs SPC’s formation, registration, types of business activities, and termination. This law allows foreigners to own 100% of the shares in an SPC. The following benefits are available for a Bahrain SPC.
Complete foreign ownership, no taxes, one shareholder who can be the sole director and limited liability.
SPC’s must have a company name that is unique in Bahrain.
The company name must either end using the words “Single Person Company” or its abbreviation of “S.P.C.”.
Owners of an SPC only have liability to the extent of his or her capital contribution to the company.
A minimum of one shareholder (founder) is required.
The shareholder can reside anywhere in the world and be a citizen of any country.
Since this is a single person company, the only type of shares which can be issued are registered shares.
The SPC cannot issue public shares and is prohibited from issuing debentures or negotiable warrants.
Only one director is required to be appointed to manage the SPC.
The sole shareholder may be the only director.
If you have more questions about registration formalities and setting up a company in Bahrain, please feel free to get in touch with us.
2. With Limited Liability Company (BCS)
W.L.L needs at least two shareholders and two directors in order to be set up. Additionally, a local manager is needed. A WLL business should be registered with the registrar in Bahrain to get legal recognition. The registration process begins with determining a unique name, followed by determining an adequate business form or structure and move along with the registration process.
A WLL company should use the name which defines its working with “Limited Liability Company” (W.L.L. at the end).
It is suggested to keep three names as an option to be selected as the business name by the Bahrain Company Registrar.
3. Bahrain shareholding company (BSC)
Similar to a WLL, BSC requires at least two shareholders and directors, together with a resident manager. This structure is ideal for a large number of entrepreneurs for large projects. It is, therefore, ideal for those with large investment ideas.
BSC companies need only a minimum share capital, and the same is further divided into small share which is issued to the general public for subscription.
Shares of Bahrain Public Shareholding should be listed in the national Stocks and Security Exchange Agency -Bahrain Bourse (BHB).
In a Public Shareholding Company, minimum Board of Directors should be three.
All three types of LLCs in Bahrain confer limited liability to their shareholders and can be owned 100% by foreign citizens. It becomes quite monotonous at times to deal in with legal procedures; Hence, it is useful to use Helpline Group’s 20 years’ experience to make such processes easy and less cumbersome. If you still have any query on how to start a business in Bahrain, feel free to contact us. We are always at your service.
General partnership company is a business structure in which partners have unlimited liability. Liability in General Partnership Companies can be extended to partners’ full personal wealth. Minimum number of Board of Director and Promoters is limited to two. Minimum partners in this structure can be 2 and there is no limit to a maximum number of partners.
All partners in General Partnership Company have the same responsibility towards business until specified in the contract and share full liability.
Name of the Company should be kept in such a manner which should include the title of one or more partner.
General Partnership Company is not a suitable structure for businesses like banking, investment and insurance.
Minimum share capital requirement in a General Partnership Company is not specified.
Foreign investors are allowed to have full ownership in General Partnership Company in Bahrain
General Partnership Companies do not require any local sponsor or a company agent.
General Partnership Company structure is good for starting a small business in Bahrain.
Limited Share Partnership Company is established by two or more person and both of them are liable to the extent mentioned in the contract. This partnership has two type of partners, Firstly, General Partner responsible for making managerial decisions in the company and have full liability to the extent of their personal wealth. Secondly, Limited Partners who only contribute capital and have liability to the extent of their capital invested in it.
Limited partners in a Limited Share Partnership Company cannot take part in managerial decision or activities of the company. This business structure is not allowed to deal in businesses like banking, investment and insurance. There is no limit on the minimum requirement of share capital for setting up a Limited Share Partnership Company.
Holding company is formed to own shares in foreign or Bahraini Companies including limited liability or Joint Stock Companies. A holding company can have more than 50% of ownership on the capital of a subsidiary company. Holding company can also form a single person company or Joint Stock company or Limited liability company.
If you have more questions about registration formalities and setting up a company in Bahrain, and amendment in company structure, please feel free to contact Helpline Services.
Joint ventures do not enjoy the feature of a separate identity since it is formed between two organisations or entities working together to fulfil a common purpose. Both the companies working under a joint venture may have a common intention. A joint venture may come to an end when this common goal is achieved.
There are other conditions, under which a joint venture is dissolved, including incompetency of one or more companies, fulfilment of objective, the expiry of contract and other legal threats to the contract. In Memorandum of Association, all the rights, duties and obligations are supposed to be mentioned with the clear indication of limit to share profit and loss.
Under Commercial Company Law, Representative Office in Bahrain can be opened by foreign investors. Helpline Group can assist in this type of company formation in Bahrain. Representative Trade Offices cannot deal in profit-making activates. To run a Representative Trade Office in Bahrain, foreign investors need a local citizen to represent the company. This form of business structure is suitable to those, who are willing to conduct research in the local community of Bahrain or willing to do business promotion of their parent company.
Commercial Agency is established as an alternative to making a legal presence in Bahrain. A commercial agent can be appointed to represent the parent or main or foreign company. Commercial agencies are regulated by the legislation of The Agency Law or Commercial Agency Law of 1992 in Bahrain.
Foreign investors can use their local agent to provide services or distribute goods on behalf of the parent company.
The commercial agent can be a Bahraini citizen or Bahraini company (holding major share).
Each and every agreement related to the commercial agency must be registered in Commercial Agencies Register.
Opening a Branch Office in Bahrain is often a necessity of the company. Branch offices are suitable for customers dealing with engineering and financial activities. Commercial Company Law permits a foreign company to open up a branch office in Bahrain without setting up a subsidiary unit. This business entity can be fully owned (i.e.100% foreign ownership) by the non-residents. Full shareholding in Branch Office is allowed only when the operation of the business comes under the business allowed for Limited Liability Company by non–residents.
Foreign investors should get a bank guarantee from their parent company for a minimum amount of $133,000; this should be given to the Ministry of Finance and National Economy.
Branch Offices are given permission to collect invoices from the customers, to protect business premises, to sign a sales contract (locally) and to collect income from customers.
Branch office in Bahrain is required to appoint a local resident as an agent to look after visa sponsorship or other regional operational services.
Other Factors You Should Consider for Bahrain Business Formation
Real estate business is one of the fast-growing business sectors across the world. It requires a huge amount of financial investment, thus, real estate agents cannot think of starting a small business in Bahrain as it is having huge risks involved in it. The Bahraini government is continuously working in this field to make it easy for the investors to deal in this sector. It has introduced several initiatives that have helped in the growth of overseas investment. Now foreigners can also own land but in government-selected areas, these areas are specially developed for the foreigners to make investments.
Bahrain is one of the most favourable countries to work and do business in term of taxation. There are hardly any tax charges to be paid by business owners. The government of Bahrain does not charge any corporate tax, estate tax, gift tax, inheritance tax, capital gain tax, withholding tax or income tax. But there are few companies which are supposed to pay taxes to the government like, gas companies, petroleum companies, oil producing companies and refining companies. All the companies engaged in these businesses are entitled to pay taxes regardless of the place of business incorporation. Tax charged on these businesses is about 46% on the net profit gain in Bahrain.
Helpline Group can provide different services related to getting a business visa in Bahrain. Foreign visitors are required to have visa except for the residents of GCC states. Getting a work visa might need sponsorship, that can become a hurdle in your way to success but our contacts with Bahraini locals will help you in the visa. Getting a business visa in any foreign country entirely depends on the structure of the company and its related documents. If all the necessary documents are ready according to Bahraini Visa system, then it hardly takes time. Helpline Group experts will help you in attaining your objectives smoothly.
Foreign importers or local agents must provide a Customs Bills of Entry in order to import goods to Bahrain. It is mandatory to follow the import procedure, for this, foreign investors can hire a licensed and registered clearing agency. For example, in Bahrain, you may require the following documents for engaging in an import business.
- Certificate of origin of products
- Type of goods imported / hazardous / non-hazardous
- Delivery order from the person shipping the goods
- A duplicate copy of the supplier’s commercial invoice (both in English and Arabic)
- Packing list
- Bill of lading/Airway bill
- Bank voucher or payment receipt
Our Qatar Office Address
Helpline Group W.L.L
1st Floor, Office No: 6, Street No.230
Building No: 153, Zone:42
P.O Box:30606, Nearby Gulf Times,
Opposite Doha Petrol Station,
C-Ring Road, Doha, Qatar