Bahrain company registration

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Bahrain company registration

DOING BUSINESS IN BAHRAIN

Since 2003, Healy Consultants Group PLC 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.

Press the link headings below to read detailed, relevant, up to date information.

  • Advantages and Disadvantages

    Advantages of Bahrain company registration

    Bahrain business registration services

    1. The country has relaxed some of its registration requirements, including:
      • In 2016, the Bahrain government decreased the paid-up share capital requirement to US$2,660 (BD1,000);
      • 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;
      • The country is a member of the GCC and GAFTA.

    2. There are many benefits for companies incorporated in the country, including:
      • Companies are exempt from corporate i) income tax ii) withholding tax and iii) value added tax;
      • Additionally, 100% foreign owned companies are allowed to be incorporated in Bahrain’s free zones, where they enjoy i) zero customs duties ii) exemption from national labor hiring and iii) annual rental.

    3. Our Clients can take advantage of Bahrain’s developed financial sector, including:
      • 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;
      • Bahrain has one of the most liberal business environments in the MEA. Consequently, the 2016 Heritage Foundation’s Index of Economic Freedom votes Bahrain as the freest economy in the Middle East and the 18th freest economy globally.

    Disadvantages of Bahrain company registration

    1. There are still some strict requirements for foreign investment, including:
      • 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;
      • When registering a company outside of one of Bahrain’s Free Zones, the employment of foreign workers is limited by a quota.

    2. Incorporation process can be very time consuming and expensive, because:
      • 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;
      • 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. 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;
      • 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.

    3. The country’s high corruption is still a major challenge for companies’ activities, because:
      • Government kickbacks are sometimes a normal part of business and should be anticipated for large contracts (though not necessarily required);
      • 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.

  • Best uses for a Bahrain company

    Regional headquarters

    Bahrain is an optimal choice for companies to establish their regional headquarters, because:

    • 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.

Company registration

  • Time to incorporate: Six weeks
  • Cost to set up: US$23,131
  • Minimum capital: US$2,660
  • Physical office required: Yes

Required appointments

  • Shareholders: 2
  • Directors: 2
  • Company secretary: Yes
  • Resident director: No

Key facts

  • Corporate tax rate: 0%
  • Corporate tax base: Territorial
  • Shelf companies: Available
  • Main company type: LLC

Frequently asked questions

Contact us

For additional information on our company registration services in Bahrain, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi