Single Person Company in Bahrain
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. It is the most common form of company registration in Bahrain. A single person company can be owned by an individual as well as a company. An SPC can be 100% foreign owned but there are few activities in an SPC which are not permitted for a 100% foreign ownership. One of the advantages of an SPC in Bahrain is that there is no requirement to hold annual or extraordinary general meetings of the company; the company must simply file its audited financial reports with the Ministry of Trade and Commerce.
Features of an SPC in Bahrain
- There can be only one owner and no requirement of a partner
- The capital requirement to set up the SPC is as low as BD1,000 depending on the nature of the activity
- The Articles of Association is the main document of SPC
- Minimum number of shareholders, directors, and promoters is one
- Local operations are allowed
- Presence of local office is mandatory
How to Set Up an SPC in Bahrain?
Bahrain, more than other countries in the region, offers incredible support to the budding entrepreneurs. Due to which the minimum capital to set up a business is less and the process to register the business isn’t complex. The process of starting a company in Bahrain is as follows:
1. Company Name
The applicant must select a company name which is not similar to the other legal entity’s name in Bahrain. The company name must end with ‘Single Person Company’ or its abbreviation ‘SPC’.
2. Application Form
An application form filled with all the personal as well as professional details must be submitted to the Ministry of Industry, Commerce and Tourism (MOICT). The application should mention details of shares in the SPC, paid-up capital, and qualifications of the owner.
3. Articles of Association
As said earlier, the AOA is the main document of an SPC as it governs all the rules related to the company. Once the document is prepared and accepted by the Ministry it must be signed by the notary and a copy must be submitted online.
4. Commercial Registration
In order to obtain the commercial registration- in addition to meeting the activity/ownership criteria- the applicant has to be:
- at least 18 years of age (certain commercial activities require a minimum age of 21)
- of sound mind
- dedicated to his business (applicants employed in the private sector are required to provide a “No Objection” certificate issued by their current employer)
- free from any criminal record
5. Final Approval
After AOA you have to submit all the documents attached with a proper business plan to the MOICT for SPC registration. It takes up to two weeks for the application to be processed completely and once approved you are ready to start your business.
Documents Required to Set Up an SPC in Bahrain
- Application form of registering the company
- Draft copy of Memorandum and Articles of Association
- Capital Deposit Certificate (after pre-approval)
- Appointment letter from an external auditor
- Copy of Bahraini ID of the investor and the director
- Copy of company’s Commercial Registration
- Board of Directors resolution for the establishment of SPC
- Copy of the applicant’s educational qualifications
- Proposed commercial address under which the business is going to operate
Why Set Up an SPC in Bahrain?
A vast majority of investors wants to invest in Bahrain because of its business-friendly atmosphere, openness, and multicultural society, and an added advantage of wider outreach to GCC markets. Also, Bahrain imposes no tax whatsoever on SPC. This includes: income tax, corporation tax, capital gains tax, gift tax, inheritance tax, wealth tax, and withholding tax.
If you are looking to invest in Bahrain and start an SPC then it is one of the best times to open because as compared to other neighboring countries the cost of operating a business in Bahrain is still very low. The process can be quite complex without the help of local knowledge hence it is advised to take the help of an agent or an advisor as their help will be vital in protecting your assets and saving your time. We at Business Setup Worldwide legal and documentation formalities and take care of all the procedures related to setting up a company in Bahrain. Contact us today, and we'll be glad to assist you.