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Company Formation
IN BAHRAIN

Bahrain is becoming a top choice for entrepreneurs and investors. They want to start businesses in the Gulf region.

People recognize Bahrain for its friendly business environment and 0% corporate tax. Its strategic location provides many opportunities for companies of all sizes. Starting a small business or growing a substantial one in Bahrain can be extremely advantageous. It gives you access to a strong economy, GCC markets, and helpful regulations.

Establishing your business in Bahrain is a streamlined process with the right guidance. Bahrain offers 100% foreign ownership, low bureaucracy, and strong infrastructure. This mix of tradition and modernity makes it a great place for ambitious businesses. This guide will walk you through the key steps and insights needed to successfully navigate company formation in Bahrain.

Apply Online Learn 7 Steps Types of Companies

Key Information

Ownership100% Foreign Ownership Allowed
Tax0% Corporate Tax, 0% Income Tax
Available Business Structures– With Limited Liability (WLL)
– Branch of a Foreign Company
– Joint-Stock Company
– Partnership Company
Minimum Capital RequiredNo minimum capital requirement specified.
Registration TimeframeApproximately 11–20 Business Days
Platinum Package
Required Documents– Clear copies of passports
– Duly signed KYC forms
– Duly signed Engagement letter
– Authorization letter

7 Simple Steps of Company Formation in Bahrain

Company formation also called company registration in Bahrain is a multi-step process and involves the approval of various ministries. Each ministry has its requirements, and a company has to meet those requirements for successful business registration.

Following is the new procedure for company formation/registration in Bahrain:

Last Updated: 19-12-2024

company formation in bahrain

Step #1: Security Clearance

The first step is to get the security clearance approval. The PI Startup Advisory team will draft the initial KYC documents for the client to sign. After getting the signed documents, the PI Startup Advisory team will send the client’s IDs to Nationality Passport and Residency Affairs Bahrain for approval.
The following are the required documents at this step:

  1. Clear copies of passports
  2. Duly signed KYC forms
  3. Duly signed Engagement letter
  4. Authorization letter

Step #3: Register Headoffice of The Company

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. To register the headoffice we require Shop Photos (Pre-Approval, Lease Agreement (After approval) and, EWA (After approval). Samples are as below:

Step #5: Notarize the Memorandum

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

For the notarization of the company’s Memorandum (Deed of Association), the following are the requirements:

  1. The physical presence of the shareholders.
  2. In case of attorney signing the documents, original Power of Attorney will be required.  
  3. All shareholders shall present the original passport to the notary. 
  4. All shareholders will sign the Memorandum by Passport Signature. 

 

 

 

Step #7: Get Final Approval from 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. Following is a sample of active Commercial Registration:

Step #2: Reserve Commercial Name

The second step of the company formation in Bahrain is to reserve the commercial name of the company. You can provide us three proposed commercial names according to your preference. Following are the rules and regulations for chosing the commercail name of the company:

✓ The business name can be a person’s name.
✓ The business name can be a part of a person’s name.
✓ The business name can be a an innovative name.
✓ The business name can be a a combination of above mentioned.
✓ The business name may include the description of business activity.
✓ The name must be unique and must not have been registered already. It must not be similar to an existing business.
✖ The name should not consist of a common word Only. Such as Mechanical Workshop, Hospital, School, etc.
✖ It must not contradict the undertaken business activities.
✖ It must not contradict local laws & values.
✖ It should not be the same as an internationally known company.
✖ It should not reflect any religious, political, or military affiliations.
✖ It should not be similar to any honorary name, emblem, or social organization.
✖ It should not be a translation or imitation of reputable marks, brands, or third parties.

    Step #4: Prepare 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.

     

     

    Step #6: Open 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.Here is a sample of capital deposit certificate:

    Company bank account opening requirements:

    To open a company bank account, you will need to provide the following documents and meet the following conditions:

    1. A bank statement that covers the last six months of your business activity, with a bank seal on each page to verify its authenticity.
    2. The physical presence of all the shareholders of your company at the bank branch where you want to open the account.
    3. Supporting documents that show the source of income for your company, such as business bank statements or salary slips from your employees.
    4. A business summary that outlines the nature and scope of your business, as well as a financial plan that projects your expected revenue and expenses.

    Company bank account Features

    • Online Banking Facility: Yes
    • Multiple Authorized Signatories (singly/jointly) yes
    • International Wire Transfers Facility: Yes
    • Trade Finance: Yes
    • Corporate Debit Card: Some banks allow others not.
    • Multiple Currency Accounts: Yes

    Types of Business Entities in Bahrain

    1. Limited Liability Company (WLL) - Recommended

    Following are the features of a WLL Company in Bahrain

    • Structure: A private company where there is restriction of number of shareholders , each shareholder is liable only to the extent of their share in the capital.
    • Capital Requirements: No minimum capital requirement specified; however, the capital should be sufficient to achieve the company’s objectives.
    • Foreign Ownership: Permits up to 100% foreign ownership in most sectors.

    The WLL (With Limited Liability) structure is recommended because it offers limited liability protection to shareholders, requires no minimum capital, and is ideal for small to medium-sized businesses seeking a flexible and cost-effective setup.

    2. Single Person Company (SPC)
    • Structure: Owned by a single individual, who can be a natural person or a corporate entity.
    • Liability: The owner’s liability is limited to the company’s capital.
    • Capital Requirements: No specific minimum capital; it should align with the company’s activities

    Note: SPC’s have been merged with WLL. Now you can setup a WLL without restriction over number of shareholders

    3. Branch of a Foreign Company
    • Allows foreign companies to establish a branch in Bahrain without creating a new legal entity.
    • The parent company is fully liable for the branch’s obligations.
    • Must be registered with the Ministry of Industry, Commerce, and Tourism (MOICT).
    • Cannot engage in activities beyond what is permitted by Bahraini law.
    4. Joint-Stock Company (Public Shareholding Company)
    • Structure: Capital is divided into freely transferable shares, and shareholders’ liability is limited to their shareholding.
    • Capital Requirements: Minimum capital of BHD 1 million.
    • Shareholders: Requires at least two shareholders; shares can be offered to the public.
    5. Bahrain Shareholding Company (Closed) – BSC(C)
    • closed joint-stock company where shares cannot be offered to the public.
    • Shareholders’ liability is limited to their contributions.
    • Minimum Capital: BHD 250,000.
    • Ideal for businesses with a limited number of shareholders.
    • Management is overseen by a board of directors, elected by the shareholders.
    6. Bahrain Shareholding Company (Public) – BSC(P)
    • A public joint-stock company where shares are offered to the public and traded on the stock exchange.
    • Shareholders’ liability is limited to their share value.
    • Minimum Capital: BHD 1,000,000.
    • Requires at least two shareholders and a board of directors.
    • Suitable for large-scale businesses requiring public investment.
    7. Partnership Company
    • A general partnership where two or more partners jointly manage the business.
    • Partners share profits and are jointly and severally liable for the company’s obligations.
    • Management: Managed directly by the partners.
    • Suitable for small businesses and professional firms.
    8. Simple Commandite Company
    • A limited partnership comprising:
      • General Partners: Fully liable and responsible for management.
      • Limited Partners: Liability restricted to their contributions.
    • Does not involve shares and is simpler than a “Commandite by Shares” company.
    • Suitable for partnerships seeking clear distinctions between management and investment.

    Source: Commercial Companies Law Bahrain

    Business for Foreigners in Bahrain

    Foreigners can own businesses in Bahrain 100%! Foreigners can avail following benefits by owning a business in Bahrain

    Investor Resident Permit

    Family Resident Permits

    Govt Support for 1st 2 years

    No Corporate Tax

    Multi Currency Bank Accounts

    100% Ownership

    No Income Tax

    No Audit for 1st year

    Employee Resident Permits

    Easy closing within 2 years.

    Business Visa in Bahrain

    During the company registration process, PI Startup Advisory provides sponsored business visas to its clients.

    The requirements are as follows:

    1. Copy of passport
    2. Copy of resident ID
    3. Copy of previous visit visa (If any)

    Why choose PI Startup Advisory for Company formation?

    PI Startup Advisory is an Authorized Service provider regulated by the Ministry of Industry and Commerce Bahrain. Working with us ensures you that your company is being incorporated by a legitimate, competent, and trustworthy service provider.

    Though SIJILAT provides a streamlined application processing and approval system for prospective investors. However, it is no surprise that people who are just starting their business might find it overwhelming to go through the entire process of company formation.

    This is why the PI Startup Advisory team is here to help. With our services, you can easily set up your business in the Kingdom of Bahrain without any inconvenience. With our dedicated team of company formation and commercial business registration professionals, you will be able to focus on other business tasks and save a lot of time and hassle.

    All you have to do is to get in touch with us. Our consultants will discuss all the details and advise you on the best organizational structure that suits your business goals.

    PI Startup Advisory team has helped numerous local-funded, as well as foreign-funded businesses in lawfully registering their businesses in Bahrain. It’s your turn now! Contact us with confidence and get your business set up in the hub of the middle east.

    Why Register a Company in Bahrain?

    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.

    Since Bahrain has 0% Corporate & Income Tax, setting up an offshore company in Bahrain is very practical.

    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.

    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 provides an attractive business environment for local and foreign investors, including startups.

    Why Bahrain

    Following are the advantages of company registration in Bahrain

    ✓ 100 percent foreign ownership
    ✓ No corporate tax
    ✓ No Income tax
    ✓ No third-party involvement
    ✓ Access from the heart of the Gulf to several developed and emerging markets
    ✓ Businessman Visa
    ✓ Work-Permits (Employee Visas)
    ✓ Exceptional Lifestyle
    ✓ Free Zone Everywhere
    ✓ Strong Currency

    COVID-19 and Business Registration in Bahrain

    COVID 19 brought the world to a halt. For Bahrain a critical regional hub the outlook was uncertain. The supply chain destructed risking profits, jobs, and livelihoods, threatening the companies calling the Kingdome “Home”. But time like this can bring the best in us. Standing apart yet together as one supporting those who place their trust in us. After a great struggle of Government and with the cooperation of big supply chain firms and IT giants, Bahrain is Open for Business!

    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

    Company Formation types 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.

    1. Individual Establishment (Sole Proprietorship)
    2. Single Person Company (SPC / Single Member Company)
    3. Bahraini Partnership Company (BPC / Partnership Company)
    4. With Limited Liability Company (WLL / Private Limited Company)
    5. Limited Partnership
    6. Bahraini Shareholding Company ( BSC / Joint Stock Company)
    7. Branch of a Foreign Company

    Govt. entities involved in Company formation in Bahrain

    1. Nationality Passport & Residency Affairs
    2. Ministry of Industry Commerce & Tourism
    3. Ministry of Works, Municipalities Affairs & Urban Planning
    4. Labor Market Regulatory Authority
    5. Other licensing authorities according to the type of business.

    Requirements for Company Bank Account

    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 Registration 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 $2260. However, if you are interested in a specialized commercial registration, the cost may vary. Calculate Business License Cost

    PROFESSIONAL COMPANY FORMATION AGENTS IN BAHRAIN

    Business Environment of Bahrain
    for Foreign Investors

    At PI Startup Advisory, we help our customers stream through the corporate world in Bahrain with startup advisory and specialized company formation services. In doing so, we sit down with our customers, note their wants, and customize our services accordingly.

    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.

    Tax Structure

    • Corporate Tax in Bahrain: 0%
    • VAT in Bahrain: 10
    • Income Tax in Bahrain: 0%

    Organizational Structure

    •  Minimum Shareholders: 1
    •  Maximum Shareholders: Unlimited
    •  The requirement of local Directors: No
    •  Residency of Directors: Not Required
    •  Residency of Shareholders: Required by banks
    •  Residency of Authorized Signatories: Not Required

    Capital Requirements

    •  Minimum Capital: No restriction by law.
    •  Public disclosure of Share Capital: Yes.
    •  Capital in cash: Allowed.
    •  Capital in kind: Allowed.
    •  Debentures: Allowed for Bahraini Shareholding Companies Only

    Public Disclosure of Annual Reports

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

    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

    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 10%.

    Business Development Programs

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

    Foreign Ownership

    •  Individual Establishment: Allowed for Americans and GCC national foreign investors.
    •  Single Person Company: Allowed
    •  Partnership Company: Allowed
    •  With Limited Liability Company: Allowed
    •  Limited Partnership: Allowed
    •  Bahraini Shareholding Company (Joint Stock Company): Allowed

    FAQ’ s

    Can a foreigner open company in Bahrain?

    Yes. Kingdom of Bahrain allows foreign ownership of Companies.

    How long does it take for company formation in Bahrain?

    A typical company can be formed in 18-25 working days.

    Can company formation be done online in Bahrain?

    Around 90% of the company formation procedure can be done virtually. However, Personal presence is required to open company bank account.

    What are the requirements for company formation in Bahrain?

    Following are the requirements for company formation in Bahrain:

    1. Passport Copy.
    2. NOC (For employees in Bahrain only).
    3. Power of Attorney or E-key.
    4. Office Address (Electricity Account).
    5. Memorandum of Association.
    6. Capital Deposit Certificate.
    How many Resident Permits (Visas) I will get by setting up a company in Bahrain??

    By setting up a company in Bahrain each shareholders will get a “Businessman/Investor” resident permit and resident permits for their dependents (Spouse and Children). Initially you can avail 2 work-permits for your employees. Later you can increase the work-permits by providing the workload document to LMRA.