company formation in bahrain
Manama, Bahrain.

Company Formation in Bahrain - Easy and Fast Processing

Company Formation in Bahrain – Why?

Company formation in Bahrain is the first step to set up your dream business in Bahrain. You can practice commercial activities in the Kingdom of Bahrain only by registering in the commercial registers.

The commercial register is established to facilitate local and foreign investors and entrepreneurs and choose an appropriate form of business. You can choose sole proprietorship, partnership, or a company as your business organization. However, a With limited liability company (WLL) is a preferred business structure.

Types of companies in Bahrain

The legal system in the Kingdom of Bahrain provides a variety of business structures. If you have chosen Bahrain for your business, you have a choice to form:

  • Individual Establishment (Sole Proprietorship)
  • Single Person Company (SPC / Single Member Company) 
  • Bahraini Partnership Company (BPC / Partnership Company)
  • With Limited Liability Company (WLL / Private Limited Company)
  • Limited Partnership
  • Bahraini Shareholding Company ( BSC / Joint Stock Company)
  • Branch of a Foreign Company 

Advantages of registering a business in Bahrain 

The Kingdom of Bahrain is known for its investment-friendly business and corporate environment in the middle east. As one of the leading countries in GCC, Bahrain has great potential for investment and innovative business ventures. The new commercial registers system (SIJILAT) provides a kind of one-window application process through the online submission and approval system.

The Kingdom of Bahrain provides an attractive business environment for local and foreign investors, including startups. By setting up a company in Bahrain, you can avail many of the advantages, including:

  • 100 percent foreign ownership
  • No corporate tax
  • No third-party involvement
  • Government support programs
  • Access from the heart of the Gulf to several developed and emerging markets
  • Businessman Visa
  • Work-Permits (Employee Visas)

Bahrain Free Trade Agreements (FTA):

The Kingdom of Bahrain has signed 5 free trade agreements with 22 countries, promoting business opportunities and reducing trade barriers. By signing these FTAs Bahrain has seen a remarkable increase of 32.60% in imports. Following is the list of Bahrain’s FTAs:

  1. Greater Arab Free Trade (GAFTA)
  2. GCC Free Trade Agreement
  3. GCC-Singapore FTA (GSFTA)
  4. GCC-EFTA Agreement
  5. US-Bahrain FTA

Govt. entities involved in Company formation in Bahrain:

How Company Formation in Bahrain Works?

The formation of a company in Bahrain is a multistep process and involves the approval of various ministries. Each ministry has its own requirements, and a company has to meet those requirements for successful business registration. Here is how to register a company in Bahrain:

  1. Power of Attorney 

The first step in the formation of a company is to execute a power of attorney in favor of our representative. We will apply on your behalf and complete all the procedures. PI Startup Advisory team provides full support to its clients from this step until final approval for the formation of the company.

  1. Name Reservation.

The next step for company formation is the reservation of the name of the company. PI Startup Advisory team helps its clients choose the appropriate name and applies for its reservation on behalf of the clients.

  1. Company Headoffice Registration

After the name reservation, the PI Startup Advisory team will apply for the company’s head office approval. It includes approval of office/shop/workshop Incubator commercial address. PI Startup Advisory team helps its clients find the most suitable business place keeping in view the requirements of the business.

  1. Memorandum of Company

The most important part of the company formation process is preparing the memorandum of association and Articles of Association. First, the PI Startup Advisory team drafts suitable clauses to meet the specific business structure. Then, the draft memorandum is shared with the clients. Upon their confirmation, the documents are submitted to MOIC for approval and further processing.

  1. Attestation from Notary

The next step in the company formation process is the attestation of legal documents from a public or private notary. PI Startup Advisory team manages the whole process of notary attestation for their clients.

  1. Company Bank Account

For company formation in Bahrain, it is mandatory to open a bank account in the company’s name. Then, the company’s bank account is opened in the desired Bahraini bank, and the amount of capital is deposited.

  1. Final Approval by MOIC

As the last step, the notarized memorandum and Bank certificate, are submitted to MOIC for final approval. Upon approval of MOIC, your company formation is declared officially.

Document Required for Company Formation in Bahrain

  1. Copy of Passport
  2. NOC (For employees in Bahrain only)
  3. Power of Attorney or E-key
  4. Office Address (Electricity Account)
  5. Memorandum of Association
  6. Bank Deposit Certificate

Requirements for Company Bank Account – Bahrain

Company incorporation requires opening a corporate bank account and deposit the authorized capital. With the help of our specialized company formation team, you will be able to open a company bank account in 1-3 business days. For under formation companies in Bahrain following are requirements to open a Bank Account:

  • Personal presence of all shareholders:
  • Last 6 months bank statements of all shareholders.
  • Copy of commercial registration (CR).
  • Original identification documents.
  • Account opening letter by company.
  • Capital amount in cash. 

Timeline for Company Formation in Bahrain

Since company formation involves multiples steps and approvals, the normal time period spans from 30-45 working days. However, in the fast-track process, the time period is reduced and may take 18-25 working days. Therefore, the PI Startup Advisory team works systematically to complete the whole process within the minimum possible time to start your business at the earliest.

Cost of Company Formation in Bahrain

The cost of company formation in Bahrain varies based on different factors.  A typical With Limited Liability (WLL) company, with the minimum capital requirement, costs around $2260However, if you are interested in a specialized commercial registration, the cost may vary. Calculate Business License Cost

Business Environment of Bahrain for Foreign Investors

Business in Bahrain – Free Zone

Unlike other gulf countries, the Kingdom of Bahrain has no geographical restrictions. The whole country is a free zone area. Therefore, you can set up a company in any city in Bahrain. However, there are certain restrictions related to business activities. 

Business in Bahrain – Tax Structure

  • Corporate Tax in Bahrain: 0%
  • VAT in Bahrain: 5%
  • Income Tax in Bahrain: 0%

Companies in Bahrain – Organizational Structure

  • Minimum Shareholders: 1
  • Maximum Shareholders: Unlimited
  • The requirement of Directors: Yes
  • Residency of Directors: Not Required
  • Residency of Shareholders: Not Required
  • Residency of Authorized Signatories: Not Required

Companies in Bahrain – Capital Requirements

  • Minimum Capital: USD 1.
  • Public disclosure of Share Capital: Yes.
  • Capital in cash: Allowed.
  • Capital in kind: Allowed.
  • Debentures: Allowed for Bahraini Shareholding Companies Only

Companies in Bahrain – Public Disclosure of Annual Reports

  • WLL Companies: No
  • Single Person Companies: No
  • Bahraini Shareholding Company: Yes
  • Foreign Branch: No
  • Partnership Company: No

Companies in Bahrain – Banking

  • Requirement for the personal presence of Shareholders to open company account: Yes
  • Online Banking: Available
  • Corporate Debit Card: Available for single-member companies
  • Current Account: Available
  • Saving Account: Available
  • International Funds Transfer: Available

Business in Bahrain Regulatory Bodies:

Commercial Register: The Ministry of Industry, Commerce & Tourism (MOIC) is responsible for commercial registration in Bahrain.  

Commercial Law: All commercial companies in Bahrain are regulated by The Commercial Companies Law Bahrain DECREE LAW NO. (21) OF 2001.

Employment Regulation: Labour Market Regulatory Authority Bahrain (LMRA) is responsible for implementing the Labour Law in Bahrain.

Tax Regulation: National Bureau for Revenue (NBR) is implementing tax regulations in the Kingdom.  Currently the only tax in Bahrain is VAT which is 5%.

Business in Bahrain – Business Development Programs

  • Incubation Centers: Available
  • Business Development Loans: Available
  • Govt Support Programs: Available
  • Business Centers: Available

Business in Bahrain – Foreign Ownership

  • Individual Establishment: Not Allowed
  • Single Person Company: Allowed
  • Partnership Company: Allowed
  • With Limited Liability Company: Allowed
  • Limited Partnership: Allowed
  • Bahraini Shareholding Company (Joint Stock Company): Allowed