The Kingdom of Bahrain is an island state in the Persian Gulf. Bahrain has the most diversified economy among the Gulf Cooperation Council (GCC) countries, with strong capabilities in such sectors as financial services, information and communications technology (ICT), manufacturing, logistics and tourism. Bahrain’s pro-innovation business policies and laws give businesses of all sizes the opportunity to thrive.
As a business-friendly hub, Bahrain offers high-yielding opportunities for investors owing to a favourable tax environment, ease of doing business, and unparalleled access to the USD 2.07 trillion GCC market. Alongside a highly skilled workforce, maintaining this liberal economic environment is a key differentiator in the country’s value proposition as Bahrain pursues a national economic recovery plan and works towards attracting more investment in the Kingdom.
A mainland company is a company registered with the Ministry of Industry and Commerce (MOIC) of Bahrain.
Mainland companies can be registered in various legal forms:
A limited liability company (LLC) must have between 2 and 50 shareholders (members) whose liability is limited to the value of their share in the company’s capital.
A foreign citizen can own up to 100% shares (interest) in a company, depending on its type of business activity.
All activities can be divided into 4 categories:
Some activities may require additional approvals from the industry-specific regulatory authorities.
The authority in charge of registering companies is the Ministry of Industry and Commerce.
The registration of a mainland company in Bahrain includes the following steps:
1) It is necessary to select:
Some activities require special approval from the various authorities (federal and local).
2) Paying fees.
3) It is necessary to provide documents for the managers / members / attorneys (originals or notarized copies):
The shareholders need to additionally provide personal data in writing (phone number, email, residential address, country of residence, mother’s name, marital status, religion, and nationality).
For compliance check, the shareholders will also need to sign a client information form and a contract for administration.
Company registration can be carried out remotely by power of attorney (which must be apostilled).
4) Submitting a company registration application to Bahrain’s Ministry of Industry and Commerce (MOIC). The application must contain details of the shareholders, managers, and business activities of the company. After the assessment of the application, MOIC issues a Commercial Registration (CR) certificate without a licence.
5) Based on Commercial Registration (CR) without a licence, an office lease agreement is made, and approval from the municipality is obtained to register the company.
6) Obtaining additional permits from the industry-specific regulatory authorities (for some activities).
7) Signing and notarization of the Articles of Association.
8) Opening a temporary bank account at any accredited Bahraini bank and paying in the capital.
9) Submitting to the Ministry of Industry and Commerce the original Articles of Association and a bank letter confirming payment of the capital, based on which a Commercial Registration (CR) certificate with a business licence is issued. After the registration of the company, the manager must publish a relevant notice in the Official Gazette and in one of the local daily newspapers.
10) Registering the company with the Bahrain Chamber of Commerce and Industry (BCCI) and obtaining a TIN from the National Bureau for Revenue (NBR).
Upon registration, you will receive the following documents:
A company seal is also issued.
Bahrain does not have such a concept as permanent residence. Bahrain’s migration rules require obtaining a residence permit (RP), which in practice is similar to a permanent residence document.
A visa can be obtained:
The application for a work visa includes the following steps (a visa can only be applied for after the company is registered):
The applicant needs to:
3. Obtaining a work visa and residence permit (Bahrain ID).
A Bahrain ID is issued to an applicant for a period of 1 to 2 years and can subsequently be renewed. The card is ready in 7 working days.
A company is required to annually renew its Commercial Registration and licence by paying relevant fees, and to renew its office lease agreement.
Company registration and licence must be renewed 30 days before their expiration date.
Bahrain’s Commercial Companies Law (Article 286) requires companies registered in Bahrain to prepare their financial statements in accordance with International Financial Reporting Standards (IFRS).
The first financial period may last more 12 months or less, but it must not be less than 6 months or more than 18 months from the company’s incorporation date.
The tax return and supporting audited financial statements must be made in BHD (Bahraini dinar).
The audit must be submitted within 6 months of the financial year-end.
The board of directors must publish the balance sheet, profit and loss account, summary of the director’s annual report, and the full auditor’s report in a local daily newspaper in Arabic at least 15 days before the general meeting of shareholders. Companies must submit financial statements to the Ministry of Industry and Commerce within 6 months of the end of the financial year.
Companies operating in the oil and gas sector are taxed at a rate of 46%.
Stamp duty only applies to the transfer and/or registration of real estate and is charged at 2%. If stamp duty is paid within two months of the transaction date, the stamp duty rate is reduced to 1.7%.
The employer’s social security contribution is 12% for Bahraini employees and 3% for non-Bahraini employees. This contribution is levied on the employee’s monthly salary and is capped at an income ceiling of BHD 4 000 (~ USD 10 610).
Lease of commercial and residential property by foreigners attracts 10% municipal tax.
On 1 January 2019, Bahrain introduced value added tax (VAT).
VAT as a general consumption tax applies to all transactions with goods and services unless such transaction is exempted or taxed at 0% rate.
The standard VAT rate in Bahrain is 10% (from 1 January 2022).
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Services
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Fees (USD)
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Registration of a mainland company in Bahrain, including:
- company incorporation (name check; collection, preparation and submission of documents for incorporation; selection of a licence; delivery of original corporate documents); - liaising with government authorities regarding all matters of the company; - monitoring changes in legislation, informing about changes and the need to revise the activities/structure of the company; - postal services (collection/delivery of documents and other correspondence); - company seal. This fee also includes the government fees charged by the registration authority for registering a company and issuing a licence. Other options – upon request. |
from 14 500
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Finding an office for registration and further operation of the company
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from 6 500
(including rent) |
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Annual renewal of the company, including:
- liaising with government authorities regarding all matters of the company; - monitoring changes in legislation, informing about changes and the need to revise the activities/structure of the company; - keeping track of the deadlines and making payments for the company renewal and the office lease agreement; - postal services (collection/delivery of documents and other correspondence). This fee also includes the government fees charged by the registration authority for renewing the licence. Other options – upon request. |
from 8 500
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Obtaining a visa and Residence Permit
This is the cost of one work visa and residence permit, including: - payment of all government fees (Work Visa, Bahrain ID); - preparing, executing and agreeing the necessary documentation with LMRA; - accompanying the client to a medical clinic for medical examination; - accompanying the client to LMRA for fingerprinting; - submitting to LMRA documents for issuing and stamping a visa; - filing an application for and obtaining a residence card; - transport expenses. |
4 200
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Renewal of Bahrain ID (Residence Permit)
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3 800
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Assistance with opening corporate and personal bank accounts:
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= Services of:
- analysing the company’s structure, its activities / business model / turnover OR, in the case of a personal account, information on the individual’s sources of funds / residence / account balance; |
500
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= Services of:
- collecting and analysing the corporate and other documents required to be submitted to the selected bank; |
1 800
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Compliance fee
Payable in the cases of: • incorporation of a company, |
350 (standard rate, includes the check of 1 individual)
+ 150 for each additional individual (manager, shareholder, or beneficial owner) or legal entity (manager or shareholder) if such legal entity is administered by GSL + 200 for each additional legal entity (shareholder) if such legal entity is not administered by GSL 450 (rate for high-risk companies, includes the check of 1 individual) 100 (signing of documents) |
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Keeping the company’s accounting records
Maintaining a systematic archive of company documents and providing them to the client upon request |
200 / hour
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Preparing financial statements, conducting an audit, and submitting financial statements to the government authorities
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400 / hour[2]
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Tax advice on VAT and other matters
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from 300 / hour
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VAT registration
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1 200
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Preparing and submitting VAT returns
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200 / hour
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[1] The fees are valid as of January 2024.
[2] The fees for preparing financial statements and conducting an audit are charged based on the time spent at hourly rates ranging from USD 100 to USD 400 (depending on the type of work and qualification of a specialist involved).