Why Set Up Business in Bahrain?
- There are sundry free trade zones in Bahrain, setting up a business where brings along with it supplementary exemption from commercial taxes, import and export duties, land tax, building and property licence fees, and limits on the transfer of capital invested there.
- The Government of Bahrain has liberalized Bahrain's economy sizably. In recent years, Bahrain has passed laws liberalizing foreign property ownership and tightening its anti-money laundering laws.
- The Government of Bahrain has eased out trade and commerce with the US. The US-Bahrain Bilateral Investment Treaty (BIT) entered into force in May 2001. It provides benefits and protection to US investors in Bahrain, such as most-favoured-nation treatment and national treatment, the right to make financial transfers freely and without delay, international law standards for expropriation and compensation cases, and access to international arbitration.
- The Government has a liberal approach to foreign investment and is all set to enhance Bahrain’s attractiveness to international investors and businesses. New private firms, particularly in the information and communications technology, education and training services, tourism, financial services, business services, healthcare services and downstream industries, are welcome in Bahrain.
- The country has hassle-free visa policies. Entry visas for American citizens can be obtained upon arrival at the Bahrain International Airport. Also, the General Directorate for Immigration and Passports has developed a user-friendly electronic visa website which aims to expedite the visa processing system of the airport.
Types of Companies in Bahrain
In Bahrain, a business can be incorporated as one of the following business entities.
1. With Limited Liability Company
In a With Limited Liability (WLL) company in Bahrain, the partners are responsible for the debts and liabilities of the company only to the extent of their shareholding in the capital. It is the most commonly incorporated business entity by foreign entrepreneurs looking to set up a business in Bahrain because of its fewer requirements to pass resolutions than any other business structures in Bahrain.
2. Partnership Company
A Partnership Company in Bahrain can be formed by two or more parties by signing an agreement to share profits and losses together under a specific collective trade name for a commercial purpose. There are no provisions in the law concerning the minimum or maximum capital required of a partnership or the maximum number of partners allowed.
3. Bahrain Shareholding Company - Public
A Public Shareholding Company, or a Public Joint Stock Company, in Bahrain must have a minimum of 7 shareholders who subscribe to it by the way of negotiable shares. This type of company is ideal for businessmen looking to list their company in the Bahrain Bourse (BHB) and offering its shares to the public.
4. Bahrain Shareholding Company - Closed
A Closed Shareholding Company, or a Closed Joint Stock Company, in Bahrain consists of minimum 2 shareholders who subscribe to it by the way of negotiable shares that are not offered to the public for subscription. Such a company can be completely owned by a foreign national.
5. Single Person Company
A Single Person Company (SPC) in Bahrain is very similar to a Sole Proprietorship, but is a company with limited liability. It means that the shareholder’s liability is limited to the extent of their capital in the company.
6. Simple Commandite Company
A Simple Commandite Company in Bahrain is a limited partnership which is established between 2 or more partners, who are jointly liable to the extent of their personal wealth for the company's obligations and other partners who have invested in the company but are not involved in the management.
7. Branch of a Foreign Company
A Branch Office in Bahrain is meant for companies incorporated and registered outside Bahrain who want to start their offshoot in Bahrain to carry out certain activities.
Process of Setting up a Business in Bahrain
As per the Ministry of Industry and Commerce commercial registration law, a company must register at Bahrain Investors’ Center (BIC), located at the Seef Mall in the Seef District, before conducting business in Bahrain. The BIC is a hub which houses representatives from sundry ministries involved in the registration of a business, and also has representatives from financial institutions and telecommunication companies.
The Domestic Trade Affairs Directorate in the Ministry of Industry and Commerce regulates all commercial licenses and operations in Bahrain. The Commercial Registration Department issues commercial licenses, processes Commercial Registration (CR) applications, collects registration fees, publishes announcements in the official gazette, and extends counselling services to prospective investors.
Applicants may obtain a Commercial License Application Form from the Bahrain Investors’ Center (BIC), or from the website of Ministry of Industry and Commerce.
Registration Agents: The Ministry of Industry and Commerce appoints Registration Agents to provide commercial registration services for applicants. These agents include law firms, industrial property registration agents, auditing firms, and consulting companies. Applicants may choose to operate via such expert consultants, who often provide legal, financial, and other services. Registration agents usually ensure the best legal protection available in Bahrain in accordance with the applicant’s portfolio.
Special Economic Zones in Bahrain
Located between Shaikh Khalifa Bin Salman Port, Muharraq and 5 km away from Bahrain International Airport, Bahrain International Investment Park
Operated by Ports and Maritime Affairs (PMA) at the Ministry of Transportation and Telecommunication, Bahrain Logistics Zone