A shareholding company, commonly known as a Joint Stock Company, is one where the investors are liable to the company debts to the extent of their investment in the company. In Bahrain, a shareholding company is of two types: closed and public.
Bahrain Shareholding Company – Closed
A closed shareholding company or a closed joint stock company consists of minimum 2 shareholders who subscribe to it by the way of negotiable shares that are not offered to the public for subscription. The company must have a minimum of 2 directors and the closed joint stock company can be completely owned by a foreign national. It means that there is no requirement of local sponsorship. However, depending on the type of business activity, there can be a requirement of minimum Bahraini ownership.
Features of a Shareholding Company in Bahrain
- The liability of the shareholders is limited
- Annual submission of audited financial statement is required
- GCC nationals and foreign investors are permitted to own the company shares
- Commercial, Banking, and Insurance activities are not allowed
- 100% repatriation of capital is allowed
- No corporate or personal tax shall be paid
How to Set Up a Shareholding Company in Bahrain?
To set up a Bahrain Shareholding Company (BSC), an investor has to follow a few steps:
1. Name Search
The first step an investor needs to perform for company formation in Bahrain is searching for the company name with the Commercial Registration Directorate at the Ministry of Commerce and Industry. If there is an availability to register your name then you can go ahead with it. But if the name is already taken then you cannot continue with the same name. Hence, it is advised to keep an alternate name ready during such cases.
2. Application Form
An application form can be filled online or by physical presence at the Ministry. You have to fill the complete details about the shareholders, directors, company name, with an attached copy of the business plan. Later submit it to the authorities who will communicate back within a few days.
3. Office Lease Agreement
Bahrain authorities require foreign investors to lease an office space before the company incorporation can be approved. Therefore, before registering the business, you have to find an office space so that your business can be approved by the authorities.
4. Document Submission
A set of documents have to be submitted to the Bahrain Company Registrar and Ministry of Justice who will notify you with the further steps. The list of documents includes name reservation application, share allocation documents, lease agreement, and directors/shareholders details.
5. Corporate Bank Account
Once you have submitted the documents the approval from the Ministry will come in a few weeks after which you have to open a corporate bank account in Bahrain.
Documents Required for Setting Up a Shareholding Company in Bahrain
- Company registration application form
- Draft of Memorandum of Association (MOA)
- Board of Directors’ resolution resolving to establish the company in Bahrain (for corporate partners)
- National ID card (Central Population Registry (CPR)) copies of the company’s representatives. If the partners are not present themselves to register the company, copies of the ID cards of their lawyers/other representatives must be provided
- CVs of individual partners
- Lease agreement as proof of the company’s commercial address
Why Set Up a Shareholding Company in Bahrain?
Corporate law in Bahrain is not unlike that in western countries. Government supports the commencement of new companies and hence provides them with all the needful facilities. Due to this, firms are eager to utilize new market opportunities and are open to new ideas in Bahrain. If you are looking to set up a Bahrain shareholding company, then we at Business Setup Worldwide can help you establish your company and make the process hassle-free. We guide you through your company formation, with your business objectives at the centre of our ecosystem, all the way. Contact us for business setup in Bahrain – our advisors will be glad to understand your requirements and fulfil them at the earliest.