Bahrain

Company Formation in Bahrain

Bahrain is ideally located to cater to the fast growing market with a large population in Asia. YourGlobalPro can assist in Bahrain for Company Formation, Secretarial Compliance, Tax Registration, VAT Reclaim and Document Retrieval.

About the Country

The Kingdom of Bahrain (“Bahrain”) is a small Arab monarchy in the Persian Gulf. It is the third smallest nation in Asia. The Country has high development index and recognized by World Bank as a high-Income economy. The Country is the most liberal and tolerant of all the faiths. The below content will explain you in detail about the requirements for company formation in Bahrain, know about the trademark registration in Bahrain and understand the Bahrain Legal and Compliance requirements.

Bahrain

Doing Business Introduction

For company formation in Bahrain the investor must possess good knowledge of the region along with viable business plan. Your Global PRO can assist you with the entire process of company formation in Bahrain along with assistance in finding local partner for your business including providing complete guidance.

The location of Bahrain in the center of the Gulf, allow an easy access to all the middle-east market and is a global hub for trade and finance.

Incorporation - Types of Business Entities

The various types of entity that can be incorporated in Bahrain by the foreign investor are as mentioned below:

  • With Limited Liability Company (W.L.L.)
  • Partnership Company
  • Bahrain Shareholding Company (B.S.C.) – Public Shareholding Company
  • Bahrain Shareholding Company (B.S.C.) – Closed Shareholding Company
  • Simple Commandite Company
  • Single Person Company (SPC)
  • Branch of a Foreign Company
  • Holding Company

Time Frame for company formation in Bahrain varies from depending on the type of entity selected. General estimate for the time required for company formation in Bahrain is 10-15 working days.

Benefits of Registration of a Company

Bahrain has many advantages for doing business and incorporating the Company mentioned as below:

  • Excellent transport and communication facilities with a well-developed infrastructure
  • No personal tax
  • No corporate tax
  • No Value-added tax
  • No other sales tax
  • No exchange control
  • No restriction on capital and profit repatriation
  • Comparatively low business set up cost as compared to other GCC Countries
  • Products manufactured in Bahrain have Duty-free access to Gulf Cooperation Council (GCC) states
  • Foreign investment in all the sectors are permitted except alcohol, tobacco, waste products and firearms and reserved area for the local national (Bahrainis) like publishing, car rental, supply of oil and gas products.

Tax Registration and Filing

Bahrain has the lowest level of taxes in the GCC region and there is no personal income tax, wealth tax or withholding tax.

Corporate Income Tax There is no corporate tax, except a 46% tax on net profits of companies in Oil and Gas, Fossil Fuel Extraction, Hydrocarbons Industry
Custom Duty Standard Rate is 5%. Other rates (0%, 20%, 100%, 125%) apply depending on the nature of the goods.
VAT The VAT implementation is under review at GCC Level.
Tax Filing No requirement, as there are no taxes.

Double Tax Treaty

Bahrain has double tax treaty with the following countries: Algeria, Austria, Barbados, Belarus, Belgium, Bermuda, Brunei, Bulgaria, China, Cyprus, Czech Republic, Egypt, Estonia, France, Georgia, Iran, Ireland, Isle of Man, Jordan, Republic of Korea, Lebanon, Luxembourg, Malaysia, Malta, Mexico, Morocco, The Netherlands, Pakistan, Philippines, Seychelles, Singapore, Sri Lanka, Sudan, Syria, Thailand, Turkey, Turkmenistan, The United Kingdom, USA, Uzbekistan and Yemen.

Trademark registration

For trademark registration in Bahrain, the Industrial Property Directorate in the Ministry of Industry and Commerce (MOIC) has created a framework of legislation for patents, design and trademarks. However, there are no specialist IP courts and there is a lack of specialist local advocates.

The trade Mark registration in Bahrain is valid for ten years and is renewable for ten periods. Registration of a design is valid for Five Years in Bahrain and renewable for Five year periods. Unregistered designs do not have and legal rights.

Your Global PRO professionals are fully equipped to assist you with the process of trademark registration in Bahrain for your business. For assistance or advice in the matter of the trademark registration in Bahrain or intellectual property – please feel free to write or contact us.

Secretarial Compliance

  • All the Companies are required to maintain proper books of account in relation to the business transaction carried out and have the same audited annually as a part of Corporate Compliance.
  • Annual Submission of Audited financial statements with report of the Board and Auditor to MOIC is required by the Bahrain Commercial Companies Law
  • Appointment of Manager is mandatory who is responsible for the day to day affairs of the Company.

Accounting Services

Your Global PRO Professionals can assist you with the entire bookkeeping and accounting services to your Bahrain Business Set up as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

All the Companies in Bahrain are required to have the Accounts Audited by a qualified Auditor on an annual basis as a part of legal compliance and submit the same with Ministry of Commerce and Industry.

Banking

The Central Bank of Bahrain (CBB) sets and implements the monetary policy and is responsible for regulating the financial sector of the country. It also licenses and supervises the Banks, insurance services, investment Business and Capital Markets.

The KYC requirement differs from Bank to Bank and need to be complied for the Bank account opening.

In Bahrain, the banking services allow access to your bank account any time by post, courier and internet secure banking facilities.

Legal and Compliance

Below are the various Bahrain legal and compliance requirement to be followed by incorporated entities:

  • The Bahrain Company incorporation requires registration with Bahrain Investor Center and obtaining commercial registration certificate
  • The commercial registration certificate of the Company is renewable every year.
  • Companies are required to file an estimated tax declaration on or before 15th day of the third month of the next year
  • Imported Goods require payment of custom duty before clearance from the Directorate General of Customs.

HR and Employment Law and Immigration / VISA

All the expatriates require visa either sponsored or non-sponsored to live and work in Bahrain, however GCC National are exception to the same.

  • In order to hire foreign expatriate or non-national approval from the Labour Market Regulatory Authority (LMRA) is required to be taken.
  • LMRA issues visa within one week of application for the foreign employee.
  • The Employment Contracts is mandatorily required to be in written form – they are generally Definite Term (fixed period) or Indefinite term
  • Employee can be dismissed at the discretion of the Employer.
  • There is no income tax payable in Bahrain but the employees pay 7% of their salary and non-Bahraini Employees pay 1% of their salary as Social Security while the Employers pay 3% of the salary for non-Bahraini Employees and 12% of the salary for and Bahraini Employees.

Country Statistics

Capital Manama
Total Area 765 Sq. Km.
Population 1,378,000
Density 1,626.6 / Sq. Km.
Currency Bahraini Dinar (BHD)
Government Unitary Parliamentary Constitutional Monarchy
King Hamad bin Isa Al Khalifa
Crown Prince Salman bin Hamad bin Isa Al Khalifa
Prime Minister Khalifa bin Salman Al Khalifa
Official Language Arabic is the national language. English is also widely spoken and used in business.
Religion Islam
Working week Sunday to Thursday (Between 40 and 48 working hours)
Business Offices 8.30 or 9.00 am to 5.30 or 6.00 pm. In the month of Ramadan, the working day is six hours and legally applies to all staff

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