Since 2003, Healy Consultants has been efficiently and effectively assisting our Clients with i) Bahrain business registration ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) virtual office solutions.
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Advantages and Disadvantages
Advantages of Bahrain company registration
Welcoming foreign entrepreneurs
- The majority of Bahrain companies can be 100% foreign owned;
- The 2006 Bahrain-US Free Trade Agreement (FTA) ensures US entrepreneurs to be afforded the same rights as Bahrainis. It is the first FTA between the US and an Arab state and i) allows for 100% US ownership in all Bahrain industries and ii) eliminates tariffs on industrial and consumer products (Oman passed a similar Free Trade Agreement in 2009);
- Bahrain is one of the few Arab countries open to Israeli entrepreneurs. Visas can be obtained and business established for those holding Israeli passports. While still a Muslim country, Bahrain has elected Jewish ambassadors and had as many as 1,500 Jewish residents. The 2002 Bahrain constitution guarantees religious freedom;
- Bahrain is the most liberal country in the MEA, the most tolerant of expatriates and women. Its business laws are also the most liberal and investment friendly. Consequently, the 2015 Heritage Foundation’s Index of Economic Freedom votes Bahrain as the freest economy in the Middle East and the 18th freest economy globally;
- The cost of living is also 20% lower than in its oil rich neighbors;
- In 2016, the Bahrain government decreased the paid up share capital requirement to US$2,660 (BD1,000).
- Bahrain is the easiest country in the MEA to secure corporate finance and to open corporate bank accounts;
- Bahrain is a central hub for Islamic banking. As these global financial services are growing 20% annually, Bahrain is likely to ride the tide;
- A foreign bank can set up a licensed subsidiary in Bahrain within three months and with a paid up share capital of US$2,690,000 and a license fee starting at US$16,000.
Disadvantages of Bahrain company registration
- The attractiveness of Bahrain as a business hub is lessened with the liberalization of foreign investment laws in the UAE and Saudi Kingdom which allow 100% foreign ownership;
- If the Arab Spring continues, so does the risk of civil war in Bahrain. The country is ruled by a royal family that is a Sunni minority of the population (30%). The Shia majority (70%) have been fighting for more representation. Consequently the Bahrain government has imposed restrictions on its people since 2011 including public gatherings, curfews and visa restrictions;
- The risk of a civil war is mitigated by i) the backing of the Saudi government and ii) the existence of a large US naval base in Bahrain.
Doing business in Bahrain
- Corruption is high, as with many oil rich Arab countries. Government kickbacks are sometimes a normal part of business and should be anticipated for large contracts (though not necessarily required);
- It takes 3 months to set up a company and open a corporate bank account in Bahrain. The Bahrain Government and Authorities are slow to provide the necessary approvals;
- Our Clients might struggle to find quality employees in Bahrain, as the staff can be of low competence. Companies are required prioritize locals when hiring, and thus locals have less incentive to compete;
- Bahrain business practices and laws still favor Bahrain nationals over foreigners in disputes over business and investments. Disputes with Bahrain shareholders and agents cause serious problems for foreign investors. Bahrain courts can impose precautionary restraint on foreign company assets pending the adjudication of a commercial dispute;
- During Bahrain business registration, the Government frequently requests documents to be attested by the Bahrain Embassy in the country of origin of our Client. This is both a costly and time consuming exercise and complicates the company incorporation process. Examples of documents include i) passports copies ii) parent certificate of incorporation and the M&AA and iii) power of attorney. To overcome this problem, our Clients’ appoint Mr. Aidan Healy as the temporary nominee shareholder, director and bank signatory, Consequently, Healy Consultants completes company registration and corporate bank account opening without i) an immediate need for our Client to legalized documents and ii) without employee travel;
- There is a lack of Bahrain embassies around the world. Consequently it is difficult for our Clients to attest the documents in the Bahrain embassy in the country of origin.
Some trade restrictions
- The cost of setting up a business in Bahrain is high including i) multiple government fees ii) compulsory office rentals iii) compulsory hiring of staff;
- Foreign ownership is forbidden in the industries of real estate, media, transportation of goods/people, automotive rental, oil product supply, Muslim services, foreign manpower sourcing, and accounting. If our Client requires to conduct such activities, Healy Consultants recommends to use nominee Bahrain or US shareholders;
- Foreign ownership of only 49% applies to the industries of trade and retail, travel and tourism, health care and pharmacies. For these industries, Healy Consultants recommends using a nominee Bahrain or US shareholder.
Best uses for a Bahrain company
- A Bahrain registered company will serve as an excellent base for our Clients to tap into the Middle Eastern and African markets (MEA), allowing them to extract dividends, management fees and royalties from other regional subsidiaries. Furthermore, it is easier to setup in Bahrain as the real estate and labor here is less expensive than in Dubai;
- A Bahrain company will allow our Clients to maximize their profits while legally minimizing their international tax liabilities i.e. there are no corporate taxes, personal taxes, withholding taxes, VAT, import & export taxes and capital gains tax levied in Bahrain. Consequently, a Bahrain company can be a great tax planning vehicle which also enjoys the benefits of 39 international double taxation agreements;
- Bahrain serves the Saudi Arabian market easier than the UAE, linked by the King Fahd Causeway. Riyadh is only a four hour drive and the main Saudi oil company headquarters is a 30 minute drive. Dubai, in comparison, has no major highways with KSA and travellers must fly to reach Riyadh or Jeddah;
- Bahrain comprises a cosmopolitan, multinational population living and working in Bahrain, a developed infrastructure for tourism, banking, entertainment and business, high quality office and residential accommodation, reliable power and utilities, first class hotels, hospitals, schools, and shops;
- As a member of the Gulf Cooperation Council (GCC), companies in Bahrain can do business through branches and subsidiaries in GCC nations more easily than is possible with foreign companies.
- Time to incorporate: Six weeks
- Cost to set up: US$23,131
- Minimum capital: US$2,660
- Physical office required: Yes
- Shareholders: 2
- Directors: 2
- Company secretary: Yes
- Resident director: No
- Corporate tax rate: 0%
- Corporate tax base: Territorial
- Shelf companies: Available
- Main company type: LLC
Frequently asked questions
How many directors must be appointed when starting a new business in Bahrain?At least 2 directors must be appointed for successfully registering a limited liability company in Bahrain, also known as a Bahrain private limited liability company.
How many shareholders are required to complete the business registration in Bahrain?If our Client wishes to register a business in Bahrain with the company registrar, they will need to appoint only 1 shareholder.
Will I be required to appoint resident directors/shareholders to complete company registration in Bahrain?No. Resident director/shareholders will not be required when registering a company in Bahrain.
How to register a new business in Bahrain?To complete the Bahrain business registration process, Healy Consultants, will on behalf of our Clients i) arrange for notarization of the requisite documents at the local embassy ii) reserve the new company name at the Bahrain Companies Register iii) prepare the company setup forms for our Client signature and submission at the Commercial Registration Directorate iv) registration of the local office address v) publish the company details in the Official Gazette and vi) arrange for necessary work visas for our Clients and their employees.
Healy Consultants is an expert at registering companies in Bahrain and will assist our Clients at every step of the engagement to complete all company registration requirements in Bahrain.
Can Healy Consultants assist my firm with Bahrain subsidiary company registration?Yes. Healy Consultants is a qualified and experienced Bahrain company registration agent and will be able to assist our Client in this regard. Kindly contact our Bahrain company registration specialists for further details.
Our Bahrain business registration services include i) business registration ii) business license registration iii) immigration solutions iv) employment strategies v) business banking solutions and vi) office rental requirements.
Useful links for Bahrain
Government and public authority websites:
- Bahrain Tax Authority
- Bahrain Company Registrar
- Central Bank of Bahrain
- Bahrain Stock Exchange
- Investment Authority
- Chamber of Commerce
- Bahrain airport
- Visiting Bahrain
- Bahrain E&Y – Doing Business
- KPMG Bahrain – Accounting
- PKF – Bahrain tax guide 2013
- Welcome to Bahrain
- Investor’s Guide To Bahrain
- Banks Bahrain
- Economic Vision 2030
- The Commercial Companies Law
- Economy Profile 2013