Doing Business in Bahrain

Bahrain is one of the most lucrative places for starting and doing business and the country remains as the regional pioneer for many decades in the field of trading, oil exportation and exploration, finance and education. The ICT sector and in addition to a few industrial sectors such as the aluminum manufacturing of the country is growing a very rapid rate. Bahrain is a member of GCC countries and other partners of the group are Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).

Benefits of doing business in Bahrain

Bahrain got one of the most liberal business environments in the Middle Eastern region with the lowest regional operational costs. The country also hosts highly skilled, bilingual local workforces and also very developed transport infrastructure. Following points are shows the key benefits of doing business in Bahrain.

  • Bahrain got the strategic geopolitical location and the country may use as the gateway of entering 1.5 trillion USD worth market.
  • Bahrain is the first country among GCC to enter into a free trade agreement with the USA in 2006 and the aim of the contract is to increase the trade between both countries by eliminating the barriers. The FTA allows Bahrain business to enter into US market with cost competitive services and products.
  • Bahrain along with all other GCC partners entered into a Free trade agreement with other countries such as Singapore and European free trade agreement. The free trade agreement between Bahrain and Singapore came into force in January 2015 and the contracts provide preferential tariff treatments benefits.

How to do business in Bahrain?

The process of starting a business in Bahrain is very simple and requires very few steps. All companies in Bahrain must establish in accordance with commercial company act 21 and the commercial company is the most popular business vehicle in the country. In Bahrain, the company can be 100% owned by the foreigner for certain types of business vehicles. However, there may be some sector based restriction applies to the foreign companies operating in Bahrain. For examples, there are few sectors in Bahrain that must be fully owned and operated by the Bahrain citizens or GCC or US citizen. Other than that, there are some business activities that may require a minimum amount of Bahrain citizen investment, such as 51%. These sectors, in general, cannot be fully owned and operated by the foreigners are the construction business, publishing houses, press and printing business, distribution business, vehicles such as car and motorbike rental, fishing, passenger and material transportation by land, foreign manpower supply, commercial agencies, trading, gas bottling services, real estate, gas cylinder distribution etc.

The foreign restriction also applies to the companies that are involving export and import business in Bahrain. However, the degree of restriction varies depending on the nationality of the business holder (GCC or US citizen). On contrary, one may apply for exemption of the restriction to the MOICT and if the minister considers that the respective investment is beneficial for the country then he may grant the permission. Other than that there are many industries that may be fully own and operated by the foreigner such as the consultancy, technology developers, manufacturer etc.

For doing business in Bahrain, foreigners are allowed to buy lands and the land must be situated in a certain designated area. The country does not charge any restriction on the repatriation of profit or on capital and also no restriction applies to the export or on import that may be done with foreign currencies. There is no tax on income or capital gain and also no tax on sales, estate interest, and royalties. There’s also a very flexible visa policy for the foreigner to come and start doing business in Bahrain.

Setting up for doing business in Bahrain

Bahrain got a very business-friendly business environment that is targeting foreign investment. The commercial law applies to any form of a newly set up company or a shelf company. The shelf company in Bahrain is a type of company that may be created and registered in the country without listing any activity or function. After registration, one may sell the shelf company by getting permission from the authority.

Business Structures for doing business in Bahrain

Bahrain got few types of business structures and in follow; the list shows the overview of some popular business structures in Bahrain.

  • Single person company – there are no minimum capital requirements
  • General partnership company – No requirements
  • Bahrain Shareholder company (BSC) – one million Bahrain Dollar
  • Closed Joint Stock Company – 250,000 Bahrain Dollar
  • Holding Company – the required amount of capital may vary based on the legal form of the business
  • With a limited liability company (WLL) - there are no minimum capital requirements
  • Foreign Company Branch – No capital requirements. However, a letter of guarantee must be provided by the parent company by agreeing to bear all liability.
  • Shelf Company - the required amount of capital may vary based on the legal form of the business

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