Bahrain Exempt Company

If properly sructured, a Bahrain Exempt Company is a legal, tax-efficient way to perform international business. The information below will help you determine if a Bahrain Exempt Company is the best corporate structure to fulfill your international business objectives.

A Bahrain Exempt company is legally exempt from corporation tax and withholding tax, provided the company conducts no business in Bahrain.

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An exempt Company can be 100% foreign-owned. However, a minimum of two shareholders and two directors are required, although they do not be resident in Bahrain. Corporate directors are not permitted.

Unlike some offshore jurisdictions such as the BVI and Cayman Islands, Bahrain is not considered an international 'tax haven'. Consequently, when used as an international trading vehicle, a Bahrain Exempt Company projects a good image to clients, suppliers, banks and even venture capitalists. That said, because a Bahrain company is less well-known internationally (in the same way and Singapore or Hong Kong) it is popular only for entrepreneurs performing international business within the Middle East.

There are few restrictions on the activities a Bahrain Exempt Company can carry out, although it is not permitted to carry out insurance, banking or brokerage activities.

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Healy Consultants is able to open a corporate bank account in Bahrain or internationally to support Bahrain company formation. Healy Consultants works with internationally recognised banks such as HSBC, Standard Chartered and Citibank to provide corporate bank account services.

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Bahrain is a regional financial centre, and a range of financial services are offered to support Bahrain company formation, particularly through the Bahrain Stock Exchange and the Bahrain Development Bank.

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Shareholders and directors details are not available on a public register.

Capital, profits and dividends can be freely remitted from Bahrain following Bahrain company formation.

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Under Bahrain corporate law, a Bahrain Exempt Company is unable to conduct business in Bahrain. Foreign entrepreneurs set up a Bahrain Exempt Company purely to conduct tax-efficient international business.

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Unfortunately, Bahrain ranks only the world's 46th least corrupt country in the 2011 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians.

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Compared to offshore jurisdictions such as the Bahamas or BVI, a Bahrain Exempt Company is expensive to set up. For example, an Exempt Company has a minimum capital requirement of BD20,000 (US$53,000), a percentage of which (determined by the Ministry of Commerce depending on the company's activity) must be deposited with the Bahrain Monetary Agency (Central Bank) to guarantee any liabilities which may be outstanding if the company is dissolved.

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Furthermore, an Exempt Company is required to maintain a physical office in Bahrain, even though it is not permitted to conduct business in the country.

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Following the registration of a Bahrain Exempt Company, it is challenging to obtain work and residence visas for expatriate employees. Healy Consultants will assist international entrepreneurs obtain Bahrain work permits for staff.

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A Bahrain company is required to prepare annual audited financial statements. Healy Consultants will assist our clients efficiently and effectively to complete this annual statutory obligation.

For more information on a Bahrain Exempt Company, contact email@healyconsultants.com or telephone us at (+65) 6735 0120.