HOW TO START A BUSINESS IN BAHRAIN in 2024

About Bahrain: The Kingdom of Bahrain is located in the Middle East, a small island of 765.3 km² in the east of Saudi Arabia. Bahrain is known for its Business-friendly environment and exceptional lifestyle. Since Bahrain has NO corporate or income tax Bahrain’s economy mostly relies on petroleum exports. In 2019 Bahrain introduced VAT at the rate of 5% which was increased to 10% in 2022. Bahrain’s second major export is Aluminum. However, before starting a business in Bahrain in 2023, there are some things you should know to avoid potential pitfalls and challenges.

Major Developments in 2024: The year 2024 has brought significant changes that could impact the process of establishing a business in Bahrain. The banking sector has seen a positive shift, with the account opening process now streamlined to allow the setup of corporate bank accounts within 1-3 business days, marking a substantial improvement in efficiency. However, the Nationality, Passports, and Residency Affairs (NPRA) has introduced a new policy where visit visa holders are required to leave the country to apply for residency, potentially complicating the process for international entrepreneurs. Additionally, ongoing upgrades within Bahrain Municipality may introduce short-term delays in business-related procedures. These developments suggest a mixed landscape for new businesses, with improved banking processes but increased bureaucratic steps in visa and municipal matters.

How to start a business in Bahrain

To start a Business in Bahrain a person has to obtain a Commercial Registration (CR) A CR allows the investor to practice the commercial business activities.

Step# 1. Choose the Business Activity:

The first step to starting a business in Bahrain is to check the eligibility criteria to practice a business activity. The Kingdom of Bahrain has classified its business activities into the following 7 categories:

✓ Allowed up to 100% for Foreigners

✓ Allowed up to 100% for GCC Nationals

✓ Allowed up to 100% for Americans

✓ Allowed up to 100% for Singaporean

✓ Allowed up to 100% for Icelander, Liechtensteiner, Norwegian, Swiss

✓ Foreign ownership equal to or less than 49%

✓ Foreign ownership allowed, but must include a Bahraini shareholder

So as per your nationality, you must check your eligibility criteria before starting a business in Bahrain. If there is a requirement for a Bahraini partner, you can find a feasible partner, or we can assist you in finding one!

Step# 2: Choose a Unique Name for Your Business:

The second step is to choose a unique name for your business. As per “Law No. (18) of 2012 with respect to trade names” following are the rules for choosing a proper business name:

✓ 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# 3. Find a Suitable Business Location:

The third step is finding a suitable location for your business. We classify the business locations requirements in the following categories:

  • Administrative office
  • Retail Shops
  • Workshop
  • Factory

If you require an administrative office that does not require the display of your products, you can choose between an Incubation Centre, Business center or a Private office at the desired location

If you are going to start a business where a retail shop and display of products/services is required then you should investigate the market for a suitable location. Like many other countries, Bahrain has areas famous for some specific goods or services. For example, GOSI Complex is famous for mobile phones & accessories.

Workshops & Factories have requirements specified by relevant ministries and authorities. You should consult us before choosing a space for your workshop or factory. 

Indeed, finding the right location for a new business can be a daunting task, especially when trying to align with the nature of the business. PI Startup Advisory specializes in guiding startups through the intricacies of setting up in Bahrain, offering services that range from business registration to company formation and startup advisory. With their expertise, startups can navigate the corporate landscape more effectively, ensuring they secure office solutions that are both cost-effective and well-suited to their business needs.

Step# 4. Find an Experienced Consultant:

To start a business in Bahrain you require a Professional Body that is an authorized service provider in Bahrain and competent to provide you the following services:

  1. Consultation in choosing a business activity, business name, and location.
  2. Security Clearance of all shareholder’s
  3. Swift Bank Account opening
  4. Investor, Employee & Family resident permit processing.
  5. Compliance Guidance.
  6. Continuous support.

Choosing an authorized service provider for starting a business in Bahrain is crucial for several reasons. Firstly, compliance with local laws and regulations is paramount, and authorized providers are well-versed in the legal landscape of Bahrain, ensuring that your business adheres to all statutory requirements. Secondly, they offer reliability and trustworthiness, which are essential when dealing with sensitive business information and financial transactions. Thirdly, authorized providers have established networks and relationships that can facilitate smoother business operations, from banking to obtaining necessary permits. Additionally, they can provide valuable local insights and market intelligence that can be instrumental in making strategic business decisions. Ultimately, partnering with an authorized service provider can lead to a more efficient, secure, and successful business setup process in Bahrain.

Choose PI Startup Advisory For Your Business Registration

Starting a business in the Kingdom of Bahrain has been streamlined thanks to the comprehensive services provided by the PI Startup Advisory team. Our expertise in company formation and commercial business registration ensures that entrepreneurs can navigate the process with ease, allowing them to dedicate their efforts to other critical aspects of their business. This support is crucial in a country where a Commercial Registration certificate is a fundamental requirement for business operations.

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.

Apply For Business Registration in Bahrain

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

No Income Tax

No Corporate Tax

Investor Resident Permit

Govt Support for 1st 2 years

Easy closing within 2 years.

100% Ownership

Employee Resident Permits

No Audit for 1st year

Family Resident Permits

Request an Estimate

Nature of proposed business

Office Requirements

10 reasons to start Start Business in BAHRAIN

To start a business the first thing to consider is the benefit of setting up a business in Bahrain. The Kingdom of Bahrain is very welcoming toward startup businesses. Following are the 9 reasons to start a business in Bahrain:

  1. Strong Currency
  2. Strategic Location
  3. 100% Foreign Ownership
  4. No Geographical Restrictions
  5. Forward-thinking government
  6. Exceptional lifestyle
  7. Talented human capital
  8. Conductive business environment
  9. Business support programs
  10. Advanced banking system.

1. Strong Currency

Setup business in Bahrain with world 2nd strongest currency Bahraini Dinar. 1 Bahraini Dinar equals to 2.65 United States Dollar making it world 2nd strongest currency. Which means by investing in Bahrain you will not worry about depreciation of your money.

2. Strategic Location

Invest in Bahrain and connect to the $2 trillion GCC market: Bahrain is the natural gateway to the Gulf, with particularly favorable access to Saudi Arabia, the region’s single largest market and economy.

3. 100% Foreign Ownership

Unlike most of Gulf countries Bahrain allows 100% business ownership to foreign investors. There are 375 types of business that foreigners can own 100% in Bahrain without any local sponsor. This distinct policy provides you with freedom of choice and investment security. Find below table showing number of business activities allowed for 100% foreign ownership

100% Business Ownership

NationalityNo. Business Activities
All Nationalities375
American557
Singaporean387
Icelander401
Liechtensteiner401
Norwegian401
Swiss401
GCC566

4. No Geographical Restrictions

Bahrain does not beleive in the zones. Unlike other countries in the region, Bahrain has no geographical restriction for businesses. No matter what your nationality is you can open your business at any suitable location. Therefore you can target any market in Bahrain!

5. Forward-thinking government

With a track record of pioneering under its belt, enacting the most business reforms out of any country in 2019 as per The World Bank, Bahrain continues to move forward with policies and reforms that empower businesses and industries to establish themselves and grow.

6. Exceptional lifestyle

Bahrain ranks 1st globally for work/life balance and 1st in MENA for personal happiness, regarded highly for its job opportunities, career satisfaction rates, and its friendly culture – noted for being the world’s second easiest place to settle in.

7. Talented human capital

Access MENA’s top talent: Bahrainis join the workforce with both an exceptional array of skills and extremely high levels of motivation, achieving The World Bank’s highest scores in MENA for human capital development

8. Conducive business environment

Bahrain’s government works closely with businesses and regulators to explore opportunities to enhance Bahrain’s business environment and nurture optimum commercial conditions. This collaboration has seen Bahrain take solid steps towards introducing initiatives that create an enabling and innovative ecosystem, which allows businesses to thrive, achieving the distinction of the 4th most improved economy in 2019 (World Bank).

9. Business Support Programs

Every year Government of Bahrain launches multi-billion dinars support programs for startups and businesses in Bahrain. For first two years you can avail 50% Govt Support for Audit, Accounting services and many other services for your startup

10. Advanced Banking System

Kingdom of Bahrain has a strong financial system with over 362 financial institutions including 87 Banks (June 2022). There are multiple payment gateway service providers offering reliable online payment solutions.

Do’s and Dont’s while starting a business in Bahrain

If you are planning to start a business in Bahrain always choose a professional consultant who can get your business registered most legitimately. To avoid fraud check the reputation of the consulting firm. If you have two options to choose always choose the legitimate one against the economic one. We suggest the following Do’s and Dont’s to start a business in Bahrain:

Do’s

Conduct a Feasibility Analysis

Always consult an authorized service provider for company formation in Bahrain.

Sign engagement letter with your consultant

Dont’s

Don’t pay 100% in advance to your consultant

Don’t choose the local agents if you are a non-resident

Avoid Commercial Concealment

How to Start Online Business in Bahrain:

Starting an online business in Bahrain is very easy. The government has empowered the online business with an incredible eCommerce portal www.mall.bh. Foreigners can start services related to online business without the need for a local partner. However, Trade-related businesses require a local partner. Following is the procedure to establish an online business in Bahrain:

  1. Choose the suitable business activity
  2. Choose a unique business name
  3. Get an office solution at an incubation center
  4. Obtain Commercial Registration
  5. Register your busines at mall.bh

Following are the business ideas for online business in Bahrain:

  • Social Media Marketing
  • Management Consultancy
  • Life Coach
  • Accounting Consultancy
  • Web Development
  • SEO Services
  • Yoga
  • SEO Services

A journey through Business Friendly and Bahrain