Set Up a Company in Bahrain

Forming a company in Bahrain is an excellent way to take advange of opportunities in the economically-expanding Gulf Cooperation Council (GCC). Investors planning on incorporating a Bahrain company can choose between a Bahrain limited liability company (LLC), a Bahrain Exempt Company. The following will help you decide whether to set up a company in Bahrain.

1.	Investors who form up a company in Bahrain can take 100% foreign ownership, regardless of whether the company is a Bahrain Limited Liability Company (WLL), a Bahrain Exempt Company, a Branch, a Representative Office, or a Partnership. Exceptions for 100% foreign ownership include: (i) Companies that engage in certain business activities, reserved only for Bahraini citizens (ii) A public shareholding company (foreign investors can only own up to 49% of the company).
2.	Incorporating a Bahrain company also means that there is no restriction on repatriation of capital, profits or dividends.
3.	Investors who set up a company in Bahrain benefit from its reputation as a trading jurisdiction.
4.	Investors incorporating a Bahrain company are required to pay no corporate, personal, value-added or withholding tax, provided it does not conduct any business in Bahrain
5.	An Exempt Company can be 100% foreign-owned. However, a minimum of two shareholders and two directors are required, although they need not be resident in Bahrain. Corporate directors are not permitted.
6.	To encourage foreign direct investment, a limited liability company is exempt from customs duty on capital goods and goods for re-export, raw materials for manufacturing, semi-finished commodities imported for further processing, imports required for development projects, and initial import of capital goods by a manufacturing company.
7.	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.
8.	After forming a company in Bahrain, a WLL is required within three months of the financial year-end. This is required in order to prepare a balance sheet, profit and loss account and report on the company's activities and financial position, and recommendations for profit distribution.
9.	The minimum capital required to form a Bahrain Exempt Company is 20,000 Bahraini Dinars (US$53,800), which is required to be paid in full prior to incorporating a Bahrain company.
10.	High oil prices and investment-friendly policies have fueled the growth of Bahrain's economy in recent years. That said, Bahrain's economy is diversified. Consequently, the local market in Bahrain presents opportunities for foreign-invested companies operating in a range of sectors, including manufacturing and services.
11.	After incorporating a Bahrain company, investors can take advantage of Healy Consultants' range of post incorporation services.
12.	Many investors choose to set up a company in Bahrain to tap the Kingdom's strategic location at the heart of the Gulf. Forming a company in Bahrain offers excellent access to the GCC, especially Saudi Arabia, the largest market in the region.
13.	Bahrain has over 20 double taxation agreements in place, including with the UK.
14.	Investors incorporating a Bahrain company with 100% foreign ownership should note that the entity cannot operate solely in Bahrain. It can only conduct regional services.
15.	Investors who set up a company in Bahrain have good access to financing through the Bahrain Stock Exchange and the Bahrain Development Bank.
16.	Investors forming a company in Bahrain have good access to low cost skilled and unskilled labour.
17.	It can be difficult for a local company to obtain employment visas for expatriate employees to who are incorporating a Bahrain company.
18.	Investors forming a Bahrain company should note that a Bahrain Exempt Company is not allowed to conduct any business or undertake any commercial activity in Bahrain.
19.	Investors forming a company in Bahrain should note that, according to a 2008 Investment Climate statement by the US Department of State, Bahrain has emerged as one of the most attractive and preferred investment destinations in the Gulf.
20.	Investors who set up a company in Bahrain often complain of the country's inefficient bureaucracy.
21.	Investors incorporating a Bahrain company should note that despite streamlining procedures, forming a company in Bahrain is time consuming.
22.	Unless the company fulfils the foreign investment requirements, a limited liability company is required to have a minimum 51% shareholding by Bahraini citizens, in accordance with the Commercial Companies Law. A limited liability company requires a minimum of two shareholders and directors.
23.	According to the Heritage Foundation's 2012 Index of Economic Freedom, Bahrain ranks as the 12th freest economy in the world, particularly for its business, trade and fiscal freedom. Consequently, foreign investors can expect to freely conduct international business. For example, a limited liability company is able to remit capital, profits and dividends freely from Bahrain

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For more information on to set up a company in Bahrain, please email email@healyconsultants.com or telephone us at (+65) 6735 0120.

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