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COMPANY FORMATION

Bahrain is a small island nation in the Persian Gulf that has a liberal and diversified economy. It is one of the leading financial centers in the Middle East and North Africa (MENA) region, and offers many incentives and benefits for foreign investors and businesses. Bahrain has a stable political and legal system, a skilled and bilingual workforce, a modern infrastructure, and a strategic location for cross-border trade and investment. Bahrain also has a favorable tax regime, with no corporate or personal income tax, no withholding tax, no capital gains tax, and no value-added tax.

REFERENCE TO ANY LAW OR REGULATION OR ANNOUNCEMENT

The main law that regulates company formation in Bahrain is the Commercial Companies Law (CCL), which was enacted in 2001 and amended in 2018. The CCL provides for various types of legal entities that can be established in Bahrain, such as limited liability companies (LLCs), joint stock companies (JSCs), partnerships, branches, and representative offices. The CCL also sets out the requirements and procedures for registering, managing, and dissolving companies in Bahrain.

The Ministry of Industry, Commerce and Tourism (MOICT) is the main authority that oversees company formation in Bahrain. The MOICT provides online services for reserving commercial names, applying for commercial registrations, obtaining licenses and approvals, and filing annual returns. The MOICT also issues various circulars and announcements regarding company formation on its website l .

Other authorities that may be involved in company formation in Bahrain depending on the type and nature of the business include the Central Bank of Bahrain (CBB), the Economic Development Board (EDB), the

Bahrain Investment Wharf (BIW), the Bahrain Logistics Zone (BLZ), the

Bahrain International Investment Park (BIIP), the Labour Market

Regulatory Authority (LMRA), and the General Directorate of Nationality, Passports and Residence Affairs (GDNPR).

EXTERNAL LINKS TO THE TOPICS

  1. MOICT – Ministry of Industry and Commerce
  2. EDB – Bahrain Economic Development Board
  3. BIW – Bahrain Investment Wharf 
  4. BIIP – Bahrain International Investment Park
  5. LMRA – Labour Market Regulatory Authority
  6. NPRA – Nationality, Passports & Resident Affairs

IMPORTANCE FOR BUSINESS

Company formation in Bahrain is important for business because it allows entrepreneurs to establish a legal presence and operate their businesses in a competitive and attractive market. By forming a company in Bahrain, business owners can benefit from:

  • Access to a large and diverse customer base in the MENA region and beyond.
  • A favorable business environment that supports innovation, growth, and development.
  • A range of incentives and benefits such as low operating costs, free trade agreements, tax exemptions, grants, subsidies, etc.
  • A high-quality infrastructure that facilitates connectivity, transportation, communication, etc.
  • A skilled and bilingual workforce that can meet the needs of various sectors and industries.
  • A stable and transparent legal system that protects the rights and interests of investors and businesses.

IMPORTANCE FOR REGULATORY BODIES

Company formation in Bahrain is important for regulatory bodies because it allows them to monitor and regulate the activities of businesses in accordance with the laws and regulations of the country. By registering companies in Bahrain, regulatory bodies can:

  • Ensure compliance with the standards and requirements of various sectors and industries.
  • Prevent fraud, money laundering, tax evasion, etc.
  • Promote fair competition and consumer protection.
  • Support economic development and diversification.
  • Collect data and statistics on business performance and trends.

IMPORTANCE FOR GOVERNMENT

Company formation in Bahrain is important for government because it contributes to the economic growth and social development of the country. By attracting local and foreign investment, company formation in Bahrain can:

  • Create employment opportunities and reduce unemployment. – Generate income and revenue for the public budget.
  • Enhance productivity and competitiveness of the economy.

Diversify the sources of income and reduce dependence on oil. – Support strategic sectors such as finance, manufacturing, logistics, tourism, etc.

LEGAL REQUIREMENT

The legal requirement for company formation in Bahrain varies depending on the type and nature of the business. However, some of the common steps and documents involved in company formation in Bahrain are:

  • Reserving a commercial name with the MOICT.
  • Preparing a memorandum and articles of association for the company. – Obtaining the necessary licenses and approvals from the relevant authorities.
  • Opening a bank account and depositing the minimum capital for the company.
  • Registering the company with the MOICT and obtaining a commercial registration certificate. – Registering the company with the LMRA and obtaining a labor market registration certificate.

Registering the company with the GDNPR and obtaining a visa and residence permit for foreign nationals.

WHY CONSULTANT IS IMPORTANT?

A consultant is required for company formation in Bahrain because it can help business owners to navigate the complex and time-consuming process of setting up a company in Bahrain. A consultant can provide professional advice and assistance on:

  • Choosing the most suitable type of legal entity for the business. – Preparing the necessary documents and applications for company formation.
  • Obtaining the required licenses and approvals from the relevant authorities.
  • Opening a bank account and depositing the minimum capital for the company.
  • Registering the company with the MOICT, LMRA, and GDNPR.

Dealing with any issues or challenges that may arise during company formation.

TYPICAL DEADLINES TO COMPLY

The typical deadlines to comply with the legal requirement for company formation in Bahrain depend on the type and nature of the business, as well as the efficiency and responsiveness of the relevant authorities. However, some of the indicative time frames for company formation in Bahrain are:

  • Reserving a commercial name with the MOICT: 1 day
  • Preparing a memorandum and articles of association for the company: 3 days
  • Obtaining the necessary licenses and approvals from the relevant authorities: 5 to 1 5 days
  • Opening a bank account and depositing the minimum capital for the company: 3 days
  • Registering the company with the MOICT and obtaining a commercial registration certificate: 1 day – Registering the company with the LMRA and obtaining a labor market registration certificate: 1 day

Registering the company with the GDNPR and obtaining a visa and residence permit for foreign nationals: 5 to 1 0 days

BASIS ON WHICH CONSULTANT SHOULD BE HIRED

A good consultant for company formation in Bahrain can be hired based on:

  • The experience and reputation of the consultant in providing company formation services in Bahrain.
  • The quality and reliability of the consultant’s services, such as accuracy, timeliness, responsiveness, etc.
  • The fees and charges of the consultant’s services, such as transparency, affordability, value-for-money, etc.

The testimonials and feedback of previous clients who have used the consultant’s services.

LIST OF REQUIREMENTS REQUIRED

  • The list of information required by consultant to perform this service for companies may include:

    • The proposed name and activity of the company.
    • The type and structure of the legal entity for the company.
    • The details of shareholders, directors, managers, etc. of the company, such as names, nationalities, addresses, IDs, etc. – The amount and source of capital for the company.
    • The location and size of office/shop/workshop for the company. – The number and category of employees for the company.

BASIS OF CHARGING FEE BY CONSULTANT

The basis of charging fees by consultants may vary depending on:

    • The type and complexity of the service provided by consultants, such as consultancy, documentation, licensing, registration, etc.
    • The type and nature of the business established by clients, such as sector, industry, activity, size, etc.
    • The time and resources required by consultants to complete the service for clients, such as hours, days, staff, etc.

TYPICAL FEE FOR SERVICE

The typical fees for this services may range from:

  • BHD 900 to BHD 1 500 for consultancy services.
  • BHD 100 to BHD 500 for documentation services.
  • BHD 50 to BHD 2000 for licensing services.
  • BHD 20 to BHD 1 000 for registration services.

Some of the incentives offered by Bahrain to foreign investors are:

  • A favorable tax regime, with no corporate or personal income tax, no withholding tax, no capital gains tax, and no value-added tax.
  • A range of grants, subsidies, and exemptions for various sectors and activities, such as manufacturing, logistics, tourism, etc.
  • Free trade agreements with several countries and regions, such as the GCC, the US, the EU, etc.
  • A modern and efficient infrastructure that facilitates connectivity, transportation, communication, etc.

A skilled and bilingual workforce that can meet the needs of various sectors and industries.

After obtaining the required approvals and submitting the requisite documents, it would generally take 1 to 5 business days for the company to get registered in Bahrain.

A resident director/partner/manager/legal representative is required only if the company under consideration is a representative or branch office.

There are no restrictions on where a Bahrain company can operate. Bahrain provides access to the Middle East and the GCC states, and has bilateral trade arrangements with 43 countries.