Bahrain client case studies
Data management company sets up in Bahrain
Our Client is a global Firm providing advanced wellsite data management, real-time data solutions, engineering analytics to oil and gas operators around the world, helping them improve drilling operational effectiveness with data analytics.
In 2014, the Firm set their sights on Bahrain as it is generally a major market for oil and gas players based in the Middle-east. Furthermore, Bahrain is a reputable, and tax-efficient jurisdiction with excellent infrastructure for business and services.
The Firm will be targeting oil and gas Clients based in Bahrain, Saudi Arabia and United Arab Emirates, providing them with data management solutions and consultancy services.
The directors of the firm approached Healy Consultants and met our senior manager Ms. Chrissi Zamora at our Singapore office. Our Client explained their existing global business and their planned business activity in Bahrain in detail. Healy Consultants assisted the Client in choosing the optimum corporate structure of the Bahrain business and assured them we could assist their Firm secure the necessary business licenses and permits. Thereafter, Healy Consultants immediately sent them an engagement letter.
Healy Consultants team submitted the company name to the Bahrain Ministry of Industry and Commerce (MOIC) for approval. Through the MOIC, Healy Consultants also confirmed the exact business licenses and permits required for the Firm’s activities. Thereafter, we drafted the articles of association and declaration of incorporation and legalized the firm’s corporate documents with the Ministry of Foreign Affairs.
The Firm’s authorized personnel met in Bahrain to sign the documents prepared by Healy Consultants and attended a bank interview to open an escrow bank account. The Firm then deposited the paid-up share capital for their company.
The incorporation application package, including i) articles of association ii) name approval certificate iii) certificate of paid up share capital and iv) lease agreement was submitted to the MOIC and approval was received within a week.
Corporate bank account
With the Bahrain company successfully incorporated, Healy Consultants proceeded to assist the Client open an HSBC Bahrain corporate bank account to enable the company to send and receive funds. Our banking team drafted a business plan detailing the i) company profile, ii) business activities and iii) expected transaction volume to support the application. Together with a complete bank application package, approval from HSBC was received within 2 weeks.
Virtual office services
Before any Bahrain company incorporation can be completed, the Government must review and approve a lease agreement for office premises. Healy Consultants assisted our Client with finding and securing a lease agreement for an office space in Bahrain ensuring timely incorporation of the company.
Geophysical services company sets up Bahrain WLL
Kevin is the managing director of a successful Bahrain-based geophysical services company with a team of experts deployed on key projects in the Arabian Gulf.
Until mid-2005, Kevin had been based in the UK, servicing Clients in the country. However, successful bids for major survey contracts in Abu Dhabi and Qatar had led to increased time away from the UK supervising projects in the Gulf, and had prompted Kevin to consider moving to the Gulf to tap new opportunities.
The issue came to a head in April 2005 when Kevin submitted a bid on tenders for extensive offshore surveys in the Gulf to the north of Bahrain (on behalf of a gas exploration company), as well as onshore on reclaimed land close to the capital, Manama.
Given the promising outlook for the upstream oil and gas services industry, Kevin wanted to explore ways how he could also set up a new business in Bahrain which would enable him to carry out tax-efficient international business.
Kevin contacted Healy Consultants in April 2005 to find out how we could assist him, having already conducted preliminary research into the types of company available and the regulations for setting them up. It had become clear to him that a Bahrain limited liability company (known as a WLL in Bahrain) would be the optimum corporate structure to meet his international business objectives, since the alternative, the Bahrain Exempt Company, is not permitted to conduct any business in Bahrain.
One drawback of this corporate structure is that a Bahrain WLL requires a minimum of two shareholders, and the company must have at least 51% Bahraini shareholding. Since Kevin had no reliable business associates to fulfill this legal requirement, it was agreed that Healy Consultants would provide a nominee shareholder.
Although Kevin had conducted research into his requirements, he lacked the time to handle the whole business setup process, since he was overseeing the end of projects in the UK, Qatar and the UAE.
Having agreed on the corporate structure and total estimated engagement costs, Kevin signed our client engagement letter and remitted funds (including the initial minimum capital deposit) to enable us to begin the engagement. We also recommended at this point that Kevin visit Bahrain to meet the nominee Bahraini shareholder, Mubarak. The objective of this exercise would be to establish a face-to-face rapport between the two shareholders, as well as draft an agreement outlining Mubarak’s precise roles and responsibilities.
Kevin visited Manama during a break in his schedule, and our Client Relationship Officer James met him at the airport and drove him to his hotel, where we arranged for him to meet Mubarak.
Following a successful meeting between the two shareholders, our Bahrain office prepared a draft agreement between the two parties, which was signed by both.
With Mubarak’s role clearly defined, our Incorporation Team began the first step to register the company when our office assistant Mustafa visited the Bahrain Investors Centre (BIC), which handles company registration procedures on behalf of the Ministry of Commerce and Industry, to reserve a company name.
The next step was to prepare the company registration application. Our Bahrain Incorporation Team completed the Company Registration form from the Ministry of Commerce, as well as drafting a copy of the company’s Memorandum and Articles, and a board resolution to establish a company in Bahrain. These documents were then sent to Kevin (who was by that stage back in the UK) for his signature and return to us.
Since all oil and gas services companies in Bahrain must be approved by the National Oil and Gas Authority (NOGA), the Ministry of Commerce issued a letter addressed to the NOGA requesting approval. This letter was delivered by hand on the same day to the NOGA.
Meanwhile, while the documents were in transit from Kevin in the UK, our Banking Team prepared to deposit the minimum capital for a WLL of BD20,000 (US$53,000) into a local bank account at the National Bank of Bahrain (NBB), as per Bahrain corporate regulations. (Kevin had remitted this amount to us at the beginning of the engagement to cover this). Healy Consultants received a certificate confirming the deposit after two days.
Four days later, our Bahrain Incorporation Team received signed documents from Kevin in the UK. The following day our staff visited the BIC to submit the Commercial Registration Directorate documents and pay the company registration fee of BD20 (US$60). Our staff were advised that company registration would take seven working days, and when we had received no confirmation on the seventh day they called the BIC to check the status of the registration. A Commercial Registration (CR) number was issued and received by Healy Consultants’ office the following day, with written approval from the NOGA received the day afterwards.
To complete the incorporation process, a WLL is required to publish its details (including CR number) in the Official Gazette at the Ministry of Information, as well as in one local daily newspaper. Having issued the CR number to the company, the Ministry of Commerce also provided a letter addressed to the Ministry of Information, requesting it to publish the name of the new company and its activities in the Official Gazette, which is published every Wednesday. The processing fee for this task was BD30 (US$90). Our Incorporation Team also arranged for the company details to be published in the English-language Gulf Daily News newspaper.
With the Bahrain WLL now fully incorporated, the next stage of the engagement was to open a multi-currency corporate bank account to allow it to make and receive payments. Although Healy Consultants works with NBB to deposit the initial capital for the company, in our experience its corporate bank account is not suitable for international business people. Our Banking Team therefore approached HSBC Bahrain, which offers a multi-currency account and which is well-recognised around the world.
Our Bahrain Banking Team therefore prepared an application for a foreign currency bank account at HSBC Bank in Manama. At the same time, our Singapore-based Marketing Team prepared a detailed Business Plan for the company, explaining its core activities, its Clients and suppliers, as well as providing a financial forecast and information on the shareholders and directors. The application form and Business Plan were then couriered to Kevin for his signature and return to us, which he was able to do within one week.
Our Banking Team then submitted the complete application pack to HSBC in person, including the application form and Business Plan, as well as corporate due diligence such as the Commercial Registration number and due diligence on Kevin as the sole bank signatory (which was provided at the beginning of the engagement). Our staff then attended a brief bank interview on Kevin’s behalf, explaining why the company required a corporate bank account in Bahrain. Our Banking Team were informed that the application would take up to two weeks to approve, which we communicated to Kevin.
The next task in the engagement was to apply for a two-year work permit for Kevin. Our Bahrain staff completed an application form from the Ministry of Labour and Social Affairs, and prepared a draft letter on the new company’s letterhead requesting permission to employ Kevin.
At the same time, our staff applied for a No Objection Certificate (NOC) from the General Directorate of Immigration and Passports (GDIP).
The work permit was issued after five weeks, allowing Kevin to legally reside in Bahrain.
Healy Consultants continues to provide support services for Kevin’s Bahrain venture. Our Accounting Team prepared audited financial statements at the end of the first financial year, which were submitted to the Ministry of Commerce.
Through his Bahrain WLL, Kevin’s business is flourishing. He has clinched key contracts both in Bahrain and the neighbouring Eastern Province of Saudi Arabia, and he has advised Healy Consultants that he will enlist our help to obtain work permits for two more expatriate geophysicists some time in 2008.
Business consulting firm moves headquarters to Bahrain
A major US-based consulting and data analysis firm approached Healy Consultants back in early 2013. The company had decided to move their operational headquarters for the Middle East and Africa. While they already had a business up and running in Dubai, they found the real estate and labour prices of Bahrain more welcoming. By moving to Bahrain, they expected to see a reduction in their overall operating expenses by 20% for the next 5 years. After settling of fees and compiling of due diligence requirements, Healy Consultants began the engagement process through an in-depth analysis of their goals and preferred corporate activities.
Our Client Management and Economic Research teams spent two weeks developing a 30 page strategy document detailing the procedures, compliance obligations, fees, banking options, migration visas, and possible scenarios and solutions of what might go wrong with incorporation and future operations.
This document was built in coordination with our Client through several phone conversations and email correspondence, in order to develop a customized plan for the engagement. As such, we were advised the Client to proceed with incorporating a Bahrain single person company with a US corporate shareholder. While this corporate structure required a minimum share capital of US$133,000, it was a better vehicle to represent the large number of US and European shareholders of the mother company and removed the need for a local Bahrain sponsor.
Following consultation and deliberation for board approval, the consulting firm engaged Healy Consultants for business setup.
Incorporation and bank setup
In order to establish the company, company documents of the US mother company (M&AA, certificate of incorporation, board resolutions, audited financials, and powers of attorney) had to be legalized in the United States. Our clients’ legal team quickly prepared these documents and had the finalized steps completed at the Bahrain Consulate in Washington D.C. In addition to these documents, our Client was informed of Healy Consultants due diligence requirements and provided further information regarding the directors of the company.
As our Client was short on time with a pending Bahrain Client, Healy Consultants expedited several incorporation steps. As the firm was providing consulting services throughout the Middle East, we were able to provide them a virtual office for incorporation purposes. Only after establishing their business in Bahrain would the firm migrate to a working office for 5 employees.
From there, the company name was registered with the Ministry of Industry and Commerce (MOIC), deeds of establishment and articles of association were legalized by the Ministry of Foreign Affairs and submitted to the MOIC. Within 3 days, the MOIC issued approval and submitted the documents to the Ministry of Justice.
Healy Consultants assisted our Client open a corporate bank account with HSBC as they had a prexisting relationship in the US. We attended a 30 minute bank interview with the bank signatory, a director of the new company, and presented the bank officer with signed forms and a detailed business plan. The bank account was opened within one working day and our Client deposited the minimum share capital of US$53,000.
All the company documents, including the share capital certificate, were then submitted to the Information Affairs Authority. A formation announcement was published in the official Bahrain gazette. Our client’s commercial licensing application was approved within 2 days.
As the Client had several pre-existing contacts, the firm applied for work visas from the Labour Market Regulatory Authority (LMRA) themselves. This process through LMRA was quick and finished online in three weeks. In total, the company sponsored 5 work permits and visas over the following 3 months.
Healy Consultants couriered a complete company kit including all legal company documents and a feedback form. Healy Consultants remains the company secretary and annual accounting is managed by the firm’s large accounting staff.