Bahrain is one of the attractive places for starting a business and the government of Bahrain got very liberal approach for inviting investment in Bahrain. The aim of the government is to promote the investment and increase the investment opportunities in Bahrain by making the country as the ideal place with a diversifying economy.
One of the major focuses of Bahrain government is to increase investment in Bahrain in the foreign private investment sector, especially to the export and import sector. This is because this sector does not directly compete with the local industries.
The law applies the same for both Bahraini or foreign firms and both have to take approval from the government before conducting business investment in Bahrain. In this article, we are going to discuss investment opportunities in Bahrain.
Specific incentives for the investment in Bahrain
There are many incentives given by the Bahrain government for the investment in Bahrain. In below we are going to describe the incentives for the investment opportunity in Bahrain.
There are certain types of business in Bahrain where foreign ownership allowed.
For the investment in Bahrain, there is no withholding tax or the corporate tax or even there is no personal tax.
There is also no VAT or any kinds of sales tax for the goods and services.
Different kinds of soft loans are available for long-term basis from the Bahrain Development Bank and the loans given on few priority sectors like agriculture, industrial or small industry projects.
For the manufacturer, if they manufacture products inside Bahrain then they might have duty free access to the Gulf Cooperation Council (GCC). Additionally, there is a benefit of importing raw materials and machinery in duty-free quota for manufacturing purpose and the duty-free merchandise is available for re-export. In addition, there are many other customs facilities available in Bahrain.
For the investment in Bahrain, there is no restriction applies to the capital or the profit repatriation.
In Bahrain, the procedure for acquiring the commercial license is being simpler and one many finish all the official work within one week from the respective offices.
Additionally, the country establishes an efficient capital market and better portfolio investment with well-defined laws and business-friendly policies.
Tax Laws for the invest in Bahrain
Similar to the members of other GCC countries, Bahrain does not collect any form of personal, corporate, withholding, sales or value-added taxes. This is one of the major opportunities among the investment opportunities in Bahrain and the predominant consideration for the influx of foreign investment in the country.
However, there is a certain amount of tax applies to the oil, gas and petroleum companies in Bahrain. Additionally, the companies and individual have to pay municipal taxes for renting properties in the country.
Tax Laws, Customs law for Investment in Bahrain
Customs law and tariff for the investment in Bahrain
Bahrain follows the universal regulation laws for the GCC countries and different types of product enjoy different duty benefits. For example, there are free duty applies to the invest in Bahrain products such as Vegetables, fruits, and frozen fishes, books, meat, magazines and any form of catalogs.
Only 5% duty applies to products, such as many kinds of imported clothing, imported vehicles, all kinds of imported electronics and perfumes. Despite that, 100% tax applies to the products such as many kinds of tobacco and tobacco-related products.
Duty also applies on to the products based on the quantity or weight of any higher value for the product. Alcohol is an exception and 125% customs duty applies to the alcohol-based products.
For the investment in Bahrain, the customs duties exempted for all the Arab originated products and for the higher valued products, the priority released. There is also the duty-free transit facility and the duty-free drawback systems.
Additionally, the duties exempted for all the GCC originated products as well. In Bahrain, the duty-free shops are available and the products that imported for the exhibition purpose got refundable custom deposited.
General considerations for the investment in Bahrain
For conducting any kinds of business activities in Bahrain, the companies have to have the legal presence on the regions and this is governed by the decree law no 21 of 2001 which is known as the Commercial Companies Law (CCL). According to the CCL, the companies in Bahrain have to follow the local law and order based on the business activities they conduct in Bahrain.
There is a wide variety of business activity available and companies may choose any of this based on the provision.
The major business structures of the country include the Limited Liability Company or the W.L.L Company or the Joint Stock Company Closed (JSCC), Single Person Company (SPC), Holding Company (HC), General Partnership Company (GPC).