Expanding one’s business signifies constant growth and is a perfect gateway to expand one’s presence.
As per the study, Bahrain is the second economic powerhouse in West Asia and the Arab World. The commercial law of the Kingdom of Bahrain allows foreign investors to step ahead and open their branch office in the zone.
Setting up a business in Bahrain has turned out to be much more flexible now and the establishment and operation of a branch office are subjected to an authority from the Ministry of Industry and Commerce to obtain a license.
Foreign Company Branch Setup in Bahrain
The companies incorporated and registered outside Bahrain can open a branch office in Bahrain to carry out specific business activities.
The name of the foreign company in Bahrain must be identical and shall be followed by a phrase, “ A Branch of a Foreign Company”.
There are certain norms that are to be followed regarding the business name to be chosen. Here’s a guide on Bahrain Trade Name Rules that you should know.
The business entity can also incorporate a representative office of the parent company in Bahrain, with specific objectives to be followed.
Features of a Company Branch Setup in Bahrain
The branch of a foreign company in Bahrain holds the following characteristics:
- The liabilities of the branch company are to be borne by the parent company
- The presence of a local office is mandatory
- The branch office must hold a local sponsor
- No minim share capital requirement
- Presence of a branch manager
- Activities related to banking, insurance and investment are not allowed
- The parent company needs to issue a bank guarantee in favour of the Ministry of Finance and National Economy
- The branch office is permitted to secure the invoice of the Bahraini customers, sign the local sales contract and receive the income from its clients
Conditions for Setting Up a Foreign Company Branch Setup in Bahrain
The Ministry of Bahrain allows the foreign company to have its branch only if it abides by the following conditions:
- The parent company must obtain a license to set up a branch company in Bahrain
- The branch company must have a Bahraini sponsor (can be an individual or corporate entity)
- The newly opened branch must register itself with the Commercial registry wit accordance with the laws
- Suppose a branch or agency undertakes the activities of the branch office before the completion of the stated points. In that case, the persons who have undertaken the activities will be liable personally and jointly.
- The parent company must issue a guarantee to the Ministry of Finance
- The selected business name must be a unique one from its competitors
Documents Required to Set Up a Foreign Company Branch in Bahrain
The company formation process in Bahrain can be completed only when the relevant set of papers are presented to the government authorities. The list includes:
- Filled application form
- Pre-approval from the external entities
- Sponsorship agreement signed with a Bahraini trader for operational branches
- A copy of the commercial registration certificate
- Copy of the memorandum and articles of association along with its amendments
- The resolution of the board of directors
- A guarantee from the parent company taking the full responsibility of the branch
- Authenticated power of attorney
What are the Benefits of Setting Up a Foreign Company Branch Setup in Bahrain?
The branch office is a perfect option to enter the international market at ease. A few of the benefits that one can gain by opening a branch company in Bahrain include:
- The branch company retains the complete ownership
- There is no mandatory capital requirement to set up a branch company
- The entity can get engaged in several permitted business activities
- The setup process is relatively easy and can be completed in a few days
- The branch company can be used as an international gateway to enter the other nearby countries
- The branch unit can also have access to the double taxation agreement
The Complete Process to Open a Branch Office in Bahrain?
Business establishment in the Kingdom of Bahrain is a straightforward process that can be completed within a couple of days if the steps are followed accordingly, which includes:
- Fill in the application form with the necessary details
- Draft the standard memorandum and articles of association with the relevant approvals from the Ministry of Commerce at the Bahrain Investment Centre
- Get a lease approval from the municipality to set an office
- Complete the notarization process and send an online copy to the ministry
- Submit the relevant documents to the appropriate authorities
- Obtain the required approvals from the authorities
- Once approved, obtain the Certificate of Registration
- In the next move, open a bank account in Bahrain and get the proof of capital
- Deposit a guarantee to the bank in the name of the branch
- Publish the incorporation notice in the official gazette
- Register the company and the employees with the General organization for social insurance
Once the appropriate steps are followed accordingly, the company incorporation process gets completed. Proceeding with the activities alone might be a challenging task as one may not be well with the legal proceedings.
Therefore, most business investors prefer to proceed ahead under professional experts who hold good knowledge on legal grounds.
Business Setup Worldwide is one of the top business consultants helping business investors take a step forward and set up their businesses globally.
Our expert’s team is well-versed with the legal proceedings and can help you set up your branch office in Bahrain with customized solutions.
For more information on the same, feel free to speak with our experts. Contact us today-we’d be glad to assist!