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Company Formation in Bahrain

Welcome to Entrepreneur.bh, your gateway to seamless company formation in Bahrain. With our expert assistance, turning your business vision into reality is now hassle-free.

Are you eager to launch your entrepreneurial journey in Bahrain? The entrepreneur Bahrain is here to guide you through every step of the company formation process, ensuring a smooth and successful start to your business.

Access to MENA Markets:

Positioned as an excellent base, Bahrain enables companies to access the lucrative Middle Eastern and North African markets. This allows businesses to generate dividends, management fees, and royalties from regional subsidiaries.

Favorable Tax Environment:

Setting up a company in Bahrain provides the opportunity to maximize profits while legally minimizing international tax liabilities. Bahrain offers no corporate taxes, personal taxes, withholding taxes, capital gains tax, and imposes minimal import and export taxes. Expatriates contribute only 1% for social security, creating an attractive tax planning option for international firms. Additionally, Bahrain has signed 44 international double taxation agreements with various countries, further enhancing tax efficiency.

Strategic Saudi Arabian Market Access:

Bahrain offers easier service access to the Saudi Arabian market compared to the UAE. Linked by the King Fahd Causeway, Saudi Arabia's major cities, such as Riyadh and Dhahran, are conveniently reachable within hours. This proximity is advantageous for businesses, particularly those in the oil and gas industry.

GCC Membership Benefits:

As a member of the Gulf Cooperation Council (GCC), Bahrain allows companies to conduct business easily through branches and subsidiaries within GCC nations. This streamlined approach enhances regional expansion opportunities and facilitates cross-border business operations.

Process of Company Formation in Bahrain

The company formation process in Bahrain involves multiple steps that can be categorized into pre-registration, registration, and post-registration, and every company must fulfill the requirements for successful formation

Pre-registration
- Select the business type and activities.
- Decide on the share capital and services to outsource.
- Obtain an electronic key (e-key) or Power of Attorney.
- Reserve the company name.
- Determine the shareholding pattern and assign designations.
Registration
- Submit application to MOICT with company details.
- Obtain Commercial Registration (CR) and business licenses.
- Register the company’s head office.
- Prepare the memorandum and Articles of Association.
- Open a company bank account.
- Submit bank certificate and notarized documents for approval.
Post-registration
- Hold shareholders’ meetings based on company type.
- Conduct board meetings as required.
- Fulfill tax obligations, including VAT.
- Periodic review of the MOICT-issued Commercial Registration.

We are here to help you to make this more Ease by following these simplify Steps to company formation in Bahrain

Essential Steps of Company Formation in Bahrain

Step # 1
Step # 2
Step # 3
Step # 4
Step # 5
Step # 6
Step # 7

Step #1: Security Clearance for CR | Company Formation in Bahrain:

In Bahrain, obtaining a security clearance for company registration (CR) is overseen by the Nationality, Passports, and Residence Affairs (NPRA) authority. This process is crucial for businesses operating in sectors with heightened security requirements.
NPRA Evaluation: The NPRA conducts a thorough evaluation to ensure compliance with national security regulations. This evaluation includes background checks and verification of personal information.
Mandatory Requirements:
- Clear copy of the passport: Serves as the primary identification document and is mandatory for the security clearance application.
Optional Documents ( Application):
- Visa copies from other countries: Optional but can demonstrate international exposure.
- Educational documents: Optional; includes degrees, certifications, or diplomas, providing evidence of qualifications.
- Experience letters: Optional; offers evidence of relevant professional experience.
- Comprehensive business plan: Optional; details the business nature, market analysis, financial projections, and growth strategies.

Step # 2: Granting Power of Attorney & Name Reservation:

In this step, you will grant us power of attorney to us in the company formation process. We'll help you prepare a Power of Attorney document from either the Ministry of Justice or the Ministry of Foreign Affairs. This authorization allows us to act on your behalf and streamline the registration process. after this to proceed with company formation, we'll need three proposed commercial names for your company. We will submit these names to the Ministry of Industry, Commerce & Tourism (MOICT) Bahrain for approval. Once the commercial name is approved, it will be reserved for your company.

Step # 3: Approval of Commercial Address: Next, we will require a commercial address where your company’s head office will be located. This can be an office, shop, or workshop. We will obtain the necessary approval from the Ministry of Works (LMRA), Municipalities Affairs & Urban Planning for the chosen commercial address.

Step # 4: Drafting the Memorandum of Association: Our dedicated team of company formation agents will draft a comprehensive Memorandum of Association for your company. This document outlines the company’s purpose, activities, and internal structure. We will submit the memorandum to the Ministry of Justice for approval.

Step # 5: Notarization of Company Memorandum: Once the memorandum is approved by the Ministry of Justice, it needs to be notarized. We will guide you through this process, which involves notarizing the memorandum from a private notary (for urgent cases) or a public notary (scheduled appointment).

Step # 6: Opening a Company Bank Account: Opening a company bank account is a crucial step. Our specialized compliance team will assist you in swiftly opening a bank account for your company. At this stage, you will be required to deposit the company’s capital to obtain a Capital Deposit Certificate, ensuring financial transparency.

Step # 7: Final Approval by MOICT Bahrain: The last step of company formation in Bahrain is obtaining final approval from the Ministry of Industry, Commerce & Tourism. We will compile all the necessary requirements and submit them for final review. Once the final approval is granted, congratulations! Your company is officially registered and ready to operate.

By following these 7 steps of company formation in Bahrain, you can navigate the process smoothly and efficiently. Let our experienced team handle the intricacies and ensure compliance with the authorities in Bahrain. With our expertise and support, you can register your company hassle-free and embark on your business journey in Bahrain’s thriving market. Contact us today to get started on your path to success.

Entrepreneur.bh

Types of Company Formation in Bahrain:

The types of legal structures available for company registration in Bahrain are

Limited Liability Companies (LLCs): Limited liability companies is also know W.L.L Companies in Bahrain offer shareholders limited liability, protecting their personal assets from the company’s debts and liabilities. This structure is suitable for small to medium-sized businesses. A Bahraini LLC or WLL can have up to 50 shareholders, and foreigner with 100% ownership is permitted, making it an attractive option for international investors seeking to establish a presence in Bahrain.
Foreign Company Branches: Foreign company branches are extensions of their parent companies located outside Bahrain. The liability for the branch’s activities lies with the foreign parent company, not the branch itself. A branch office typically has a local manager responsible for overseeing its operations. This structure allows foreign companies to establish a presence in Bahrain without creating a separate legal entity.
Joint-Stock Companies: Bahraini joint-stock companies have the flexibility to offer shares to the public, making them ideal for large-scale businesses with significant capital requirements. There are two types of joint-stock companies: closed joint-stock companies, where shares are not offered to the public, and public joint-stock companies, which can offer shares to the public. Like limited liability companies, members in joint-stock companies also have limited liability, and foreigners can hold shares in these entities. This structure is particularly common in industries like insurance, finance, and public procurement.
Companies Limited by Shares: Companies limited by shares consist of two categories of partners: joint partners and silent partners. A minimum of four founders is required to establish this type of business entity. The joint partners actively participate in the company’s management and decision-making, while the silent partners contribute financially but do not involve themselves in day-to-day operations. This structure provides a balanced approach for businesses that seek both active and passive involvement of partners.
Partnership Companies: Partnership companies are formed through an agreement between two or more individuals who share the company’s profits and losses. This structure is based on mutual trust and cooperation between partners. It is worth noting that partners in this type of business have unlimited liability, meaning their personal assets are at risk in case of any business-related liabilities. Due to this risk, it’s essential for partners to have a strong understanding and trust in each other.
Single-Person Companies: A single-person company, as the name suggests, is owned and operated by a single individual. This structure is suitable for entrepreneurs who prefer to run their businesses independently. While there is no minimum capital requirement to establish a single-person company, external audits are mandatory. Foreigners are permitted to operate a single-person company, making it an attractive option for international entrepreneurs.
Holding Companies: Holding companies are typically created as separate entities to manage the assets and investments of a Bahraini public limited company or a foreign joint-stock company. The primary purpose of a holding company is to provide assurance to third parties and to separate the ownership and control of different entities within a corporate group.

By providing more detail and clarity on each business structure, potential entrepreneurs and investors can better understand the options available for company registration in Bahrain.

Advantages of Bahrain Company Formation:

Advantages

Relaxed Formation Requirements: Reduced paid-up share capital requirement, making it easier to form companies.
Foreign Ownership: Allows 100% foreign ownership, giving international entrepreneurs full control over their formed ventures with Investor Visa in Bahrain
Free Trade Agreement with the US: Provides US entrepreneurs with the same business rights as Bahrainis, granting 100% access to all industries and activities.
Openness to Israeli Entrepreneurs: Welcomes Israeli entrepreneurs, allowing visas and business establishment for Israeli passport holders.
Religious Freedom: Guarantees religious freedom, fostering diversity and inclusivity for formed companies.
Membership in GCC and GAFTA: Benefits from free trade agreements with multiple countries, facilitating international trade.
Tax Advantages: Exemption from corporate income tax and withholding tax for formed companies.
Zero Customs Duties in Free Zones: Exemption from customs duties for companies operating in free zones.
Easy Access to Corporate Finance and Banking: Well-developed financial sector for securing corporate finance and opening bank accounts.
Diverse Economy with Incentives for Growth: Incentives and growth opportunities in industrial, logistics, and financial services sectors.
Strategic Location: Ideal location to access the growing Gulf nations market.
Extensive Trade Agreements: Membership in the GCC common market and bilateral trade agreements with over 60 nations.
Tax Exemptions for Industrial Companies: Tax exemptions on capital and raw materials for companies in industrial areas.
Excellent Logistics Connectivity: Well-developed road, air, and sea connectivity to major Gulf business centers.
Leadership in Islamic Finance: Largest concentration of Islamic Financial Institutions in the Middle East.

Bahrain offers a favorable business environment for entrepreneurs and companies looking to establish their presence in the Middle East and tap into the Gulf region’s opportunities.

Business for Foreigners in Bahrain

Foreigners have the opportunity to 100% own businesses in Bahrain, with numerous benefits and incentives:

Bahrain’s business-friendly policies and incentives make it an attractive destination for foreign entrepreneurs looking to establish and grow their ventures in the region.

Requirements for Company Bank Account:

Company incorporation necessitates opening a corporate bank account and depositing the authorized capital.

Our specialized company formation team can assist in opening a company bank account within 1-3 business days.

For under formation companies in Bahrain, the following requirements are needed to open a bank account:

Personal presence of all shareholders
Last 6 months bank statements of all shareholders
Copy of commercial registration (CR)
Original identification documents
Account opening letter by the company
Capital amount in cash

Timeline for Company Formation in Bahrain:

The standard time for company formation is usually 25-45 working days due to multiple steps and approvals involved.
However, a fast-track process is available, which reduces the time to 15-25 working days.

The Entrepreneur.bh’ team works efficiently to complete the process in the minimum possible time to facilitate starting the business as soon as possible.

Cost of Company Formation in Bahrain:

The cost of company formation in Bahrain varies based on different factors.
A typical With Limited Liability (WLL) company, meeting the minimum capital requirement, costs BHD 1390,around $2600.
The cost may vary for specialized commercial registrations.
To calculate the exact business license cost, additional information is needed.

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FAQs

Can foreigners own 100% of a company in Bahrain?

Yes, 100% Ownership for foreigners is the key benefit of choosing Bahrain for Business.

How long does the company formation process take in Bahrain?

It takes 20-45 Business Days for company formation in Bahrain.

What are the key steps in the company formation process?

Steps include selecting a business structure, reserving a trade name, preparing legal documents, depositing the required share capital, obtaining approvals, and completing registration with the Ministry of Industry, Commerce, and Tourism.

What should I do to start a business in Bahrain as an expat?

To start a business in Bahrain as an expat, select a business structure, reserve a trade name, prepare legal documents, deposit the required share capital, obtain necessary approvals, complete registration with the Ministry of Industry, Commerce, and Tourism, and apply for relevant licenses, with specific details subject to change and requiring consultation with local authorities or a business consultant for the latest information.

What are the benefits of company formation in Bahrain?

Benefits of company formation in Bahrain include access to a growing and diversified economy, strategic geographic location, a business-friendly environment, a well-developed regulatory framework, tax advantages, and the availability of skilled labor, providing opportunities for business growth and expansion in the region.

What are the easiest & good businesses to scale in Bahrain?

The ease of scaling a business in Bahrain depends on various factors, but sectors such as technology, consulting, e-commerce, and service-based industries often offer scalability due to relatively lower entry barriers and adaptability to market demands. Identifying niche opportunities and staying abreast of evolving consumer needs can contribute to successful business scaling in Bahrain.

How to do company formation in Qatar?

To form a company in Qatar, select a business structure, reserve a unique trade name, draft and notarize the Articles of Association, deposit the required share capital, obtain necessary approvals from relevant authorities, and complete commercial registration with the Ministry of Commerce and Industry, with specific details subject to change and requiring consultation with local authorities or a business consultant for the latest information.

What are the types of company formation in Qatar?

Common types of company formation in Qatar include Limited Liability Company (LLC), Joint Venture, Branch of a Foreign Company, and Representative Office, each with its own regulatory requirements and business implications.

Can UAE Companies do business with Qatar now?

Yes, the diplomatic and economic relations between the UAE and Qatar had been restored, allowing businesses from the UAE to engage in trade and commerce with Qatar.

How are the people of Qatar and Saudi Arabia different?

The people of Qatar and Saudi Arabia differ in cultural practices, traditions, and historical backgrounds, with distinctions in dialects, cuisine, and social norms, reflecting unique identities within the broader Arab and Gulf region.

Entrepreneur.bh Always Here to Solve Your Business Problems.

Entrepreneur BH

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Manama , Manama , 317 Bahrain

+973 3366 4381

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