Company Registration in Bahrain

Company Registration in Bahrain

Bahrain is a part of the Arabian Gulf. This country comprises of different islands. There are 51 natural islands present in Bahrain along with different form of artificial islands. Bahrain is officially known as the Kingdom of Bahrain. Company Registration in Bahrain is quite straightforward; however it is important to comply with the requirements of local law.

Package inclusions:
  • Procedure for Company Registration in Bahrain
  • Documents required for company registration in Bahrain
  • Liaising with the concerned regulatory authorities for company registration in Bahrain
  • End to End Support

Company Registration in Bahrain

Company Registration in Bahrain- An Overview

Bahrain forms a part of the gulf. It comprises of variety of islands which are natural made and artificial made. Manama is the current business hub in Bahrain which offers benefits for foreign investors. Currently the Bahraini government has eased restrictions related to foreign investment in the country. Hence different investors can get benefits related to incentives from the government. Company registration in Bahrain is quite straightforward. However it is important to comply with the requirements of Sharia law and the rules under the respective authority.

The major source of government revenue comes from crude oil production and export to other countries. Crude oil was found in the early 1930’s. About 60% of the government income is through the sale and export of crude oil. Bahrain is a member of the United Nations Convention, a trade member of the World Trade Organisation (WTO) and has co-operative relationships with other countries. It is a member of the GCC (Gulf Cooperation Council) and the International Monetary Fund (IMF).

Bahrain is the first country in Middle East to adopt technology in terms of computing and telecommunications. They have also developed different forms of governance strategies for handling compliance.

Bahrain has an active free trade agreement with the USA. This free trade agreement was signed between Bahrain and USA in 2006. Having access to the free trade agreement allows investors to conduct business in the country. All the above reasons make it beneficial for an investor to go for company registration in Bahrain.

The main regulatory authority for company formation in Bahrain is the Ministry of Industry, Commerce and Tourism (MOICT). An applicant has to utilise the ‘SIJILAT portal’ when registering the entity in Bahrain. Apart from this, it is important that the applicant carries out due diligence and research before incorporating a company in Bahrain.

Benefits of Company Registration in Bahrain

The following are the benefits of company registration in Bahrain:

Benefits of Company Registration in Bahrain
  • Free Trade Agreement

    Since 2006, Bahrain has signed a free trade agreement with the USA. This is highly beneficial for foreign investment in Bahrain. Ever since this agreement, more amount of foreign investment has come to Bahrain.

  • Member of Different Treaties

    Bahrain is a member of different forms of treaties and agreements across the world. Bahrain is a member of the United Nations Convention, a trade member of the World Trade Organisation (WTO) and has co-operative relationships with other countries. It is a member of the GCC (Gulf Cooperation Council) and the International Monetary Fund (IMF). This would provide different forms of incentives for an applicant planning to go for company registration in Bahrain.

  • Exempt from Tax

    When a company is incorporated in Bahrain it is exempted from different forms of tax which include corporate tax, withholding tax and tax on dividends. Companies which are incorporated in Bahrain Free Zone would get benefits related to custom duties.

  • Highly Developed Financial Sector

    In terms of corporate finance, Bahrain is the one of the fast developing hub. The Central Bank of Bahrain has made an initiative to provide different forms of trainings in the above areas. Islamic finance is fast growing in Bahrain and contributes to the economy.

  • Double Taxation Agreements

    Bahrain has developed many double taxation agreements with other countries. This would also include the UK and the USA. This would benefit investors as they would not be taxed twice.

Eligible Business Structures for Company Registration in Bahrain

The following are the eligible business structures for company registration in Bahrain:

Eligible Business Structures for Company Registration in Bahrain
  • Bahrani Joint Stock Companies

    This form of entity is allowed to offer shares to the public. There are two types of entities under Bahraini Joint Stock companies which include open joint stock companies and closed joint stock companies. The liability of the members is limited. Such companies are allowed to carry out work related to finance, insurance and public procurement policies. The minimum capital required for forming this type of entity is 250,000 BD. Out of the above capital, 50% of the share capital must be deposited. There have to be minimum of two founders for this type of company. Apart from this, the board of directors must comprise of three members. Foreigners are allowed to have shares in this form of entity.

  • Limited Liability Companies

    In this type of entity, the liability of the shareholders is limited to a particular extent. Up to 50 members are allowed to have shareholding in this form of company. Foreigners are allowed to have ownership in this form of entity.

  • Partnership Companies

    A partnership is an agreement between two or more individuals to share profits of the company. The liability of the partners is usually unlimited. To form this type of entity minimum of two partners are required.

  • Company Limited by Shares

    In this type of entity, there are two types of partners which will include the joint partner and the silent partner. The minimum capital required for this form of entity is 20,000 BD. Minimum number of members are four for forming this type of entity.

  • Single Person Company

    A single person company is an entity which is owned by a single person. The liability of the single person company is limited to the number of shares. There is no minimum capital for forming this type of entity. This form of entity would require an external auditor to carry out the compliance with audits. Foreign ownership in this type of entity is usually allowed.

  • Foreign Company Branches

    A foreign branch office is a mere extension of the parent company. The liability of the branch office would be the liability of the foreign parent company. A manager is required for carrying out all the activities related to the branch office.

  • Holding Companies

    Usually this form of company is formed as a separate entity for foreign joint stock companies or Bahraini public limited companies. They would provide assurance to third parties related to guarantees of the company. The structure utilised by a holding company can be of any form.

Minimum Eligibility Criteria for Company Registration in Bahrain

The following eligibility criterion has to be sufficed for company registration in Bahrain:

Minimum Eligibility Criteria for Company Registration in Bahrain
  • Minimum Capital Requirement

    The applicant for company registration in Bahrain has to satisfy the minimum capital requirements. For a joint stock company the minimum capital required is 2, 50,000 BD and for a limited liability company the minimum capital required is BD 20,000.

  • Minimum Shareholders

    The minimum amount of shareholders for a company registered in Bahrain must be satisfied. Minimum of two shareholders are required for company registration in Bahrain.

  • Minimum Directors

    Minimum numbers of directors have to be appointed in Bahrain. For Bahraini Joint Stock companies minimum of three directors are required. However, for a limited liability company minimum of one director is required. For a Single Person company only the individual would be the sole director of the company. A foreign branch office would require appointing at least one director. The parent company has the responsibility of appointing the director.

  • Evaluation Certificate

    For particular capital requirements of the company, the evaluation certificate has to be provided. This certificate has to be provided by a competent auditor or an external evaluator.

  • Capital Deposit Certificate

    The Company has to provide a certificate related to capital deposited. This certificate is known as the capital deposit certificate. Such certificate would state that the minimum capital requirements of the company have been carried out.

  • Commercial Name Registration

    The name of the company must be reserved and chosen for the process of company registration in Bahrain. The name of the company must be unique and must not violate any rules related to religion or government bodies. The name chosen for the company must not violate any rules related to carrying out business.

Procedure for Company Registration in Bahrain

The following procedure has to be adopted for company registration in Bahrain:

  • Obtain Electronic Key

    An applicant has to first obtain the electronic key by registering at the office of the e-Government Authority in Bahrain (www.ekey.bh). Once the above process is carried out, the applicant can go ahead with the process of registering under the commercial registers.

  • Application

    After this step is carried out; the applicant can apply through the e-gateway system for company registration in Bahrain. The e-gateway system is also known as SILIJAT https://www.sijilat.bh/ .

  • Licenses

    The applicant would have to determine the type of license required for carrying out the commercial activity. This system can be carried out through the Unified Directory of Business Activities. Once this process is carried out, the applicant would have to determine the type of legal structure utilised for company registration in Bahrain.

  • Documents

    Once the above step is fulfilled, all the documents would be electronically sent through the system and this will reviewed by Ministry of Industry, Commerce and Tourism (MOICT). The applicant would also have to pay the respective municipal fee of 10 dinars for the application. This would be after securing the relevant approval from the ministry.

  • Notification

    The applicant would be notified on the progress of the application. Approval related to this would be provided electronically. An electronic commercial registration certificate would be provided to the applicant. If the applicant wants a hard copy of the certificate of registration then a fee of 2 BD has to be paid.

  • Publication

    Once an application is successful it would be published in the official gazette.

Compliances for Company Registration in Bahrain

  • Shareholder Meetings

    Companies with limited liability should convene shareholders’ meeting 6 months following the end of the financial year. Joint Stock companies have to convene shareholders’ meeting 3 months following the end of the financial year.

  • Board Meetings

    Joint Stock Companies have to hold a board meeting every quarter. Hence board meetings have to be held four times in a financial year. Limited liability companies have to hold board meetings if the requirements in the articles require them to have board meetings.

  • Annual Tax

    Vat has to be submitted to the National Taxation Authority (NTA).

  • Business Registration

    All businesses have to register with the MOICT and the Central Bank of Bahrain.

Documents required for Company Registration in Bahrain

  • Copy of the Certificate of incorporation
  • Memorandum and Articles of Association
  • Minimum of two shareholders
  • Minimum of two directors
  • Shareholders’ agreement
  • Notarized copy of passports of the directors;
  • Registered Address of the Business
  • Shareholders and Directors’ register.

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Frequently Asked Questions

For a joint stock company the minimum capital required is 2, 50,000 BD and for a limited liability company the minimum capital required is BD 20,000.

The minimum number of shareholders would depend on the requirements of the business. Minimum of two shareholders are usually required for a business in Bahrain.

No there are no forms of nationality requirements for companies in Bahrain.

No, there is no foreign investment restriction in Bahrain. However, it is important to carry out research and due diligence for investing in a particular sector.

Yes a physical office is required in Bahrain.

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