As Bahrain has limited natural resources, it primarily relies on foreign investment and tourism. Therefore, the country is more welcoming of international entrepreneurs and more hungry for business start-ups. Register a Bahrain company has the following advantages:
· Bahrain is an ideal tax exempt headquarters for the MEA, extracting funds from regional subsidiary companies in the form of dividends, management fees and royalties. Compared to Dubai, Bahrain real estate and labor is less expensive;
· A Bahrain company is an excellent way to book global profits while legally minimizing international tax. There is no company tax, personal tax, withholding taxes, VAT, import & export taxes, nor capital gains tax. A great tax planning vehicle enjoying benefits of 61 international double taxation and free trade agreements;
· Bahrain serves the Saudi Arabian market easier than the UAE, linked by the King Fahd Causeway. Riyadh is only a 4 hour-drive and the main Saudi oil company headquarters is a 30 minute-drive. Dubai, in comparison, has no major highways with KSA and travelers must fly to reach Riyadh or Jeddah;
· Bahrain comprises a cosmopolitan and multinational population. A developed infrastructure for tourism, banking, entertainment and business. High quality office and residential accommodation. Reliable power and utilities. First class hotels, hospitals, schools and shops;
· The majority of Bahrain companies can be 100% foreign owned;
· Bahrain company setup is comparatively easier than other MEA countries. The Ministry of Industry and Commerce and its online business portals are more efficient than UAE and Saudi bureaucracy. Bahraini companies are established in under three weeks and visas obtained within 72 hours;
Bahrain, being a business-friendly nation, has always been a warm welcomer of foreign investors. The country offers a simple and streamlined process for foreigners to come and invest in the country along with giving them various supplementary amenities for their business establishment.
For company formation in Bahrain, one must know Bahrain’s overall business environment. Regarding this, the first and foremost factor that comes into the picture is the types of business entities offered by the nation, followed by the procedure of incorporation, and lastly the necessary legal documentation. These pile up to be a lot of information to gather all at a time – but fret not! Here’s a foreigner’s guide to setting up a company in Bahrain – simplified for you!
Types of Business Entities in Bahrain
Bahrain offers several options in terms of business structure for company establishment. Each one has its own specialty. The different types of business structures available for company formation in Bahrain are described below.
1. Bahrain Shareholding Company (BSC – Open)
This business entity is a public shareholding limited liability company which has a minimum share capital requirement of BD 1,000,000. In this type, the partner is liable for the company’s debts and liabilities only up to the value of their share in the company. A minimum of 5 directors and 7 founding shareholders are required in this type of company structure and is perfect for people willing to offer shares to the public by listing one’s company in Bahrain Bourse (BHB).
2. Bahrain Shareholding Company (BSC – Closed)
This business entity is a closed shareholding company and does not offer its shares to the public. This also is a type of limited liability company whose minimum share capital requirement is BD 250,000. A minimum of 2 partners and promoters and 3 directors is required for this type of business structure. This type of company allows local operations, bank and insurance activities.
3. With Limited Liability Company (WLL)
This business entity offers 100% ownership and is the one wherein the partners are responsible for all the debts and liabilities of the company only up to the value of their share in the company. This structure requires a minimum of 2 partners, promoters, and directors and allows activities like banking, insurance, investment, and local operations. This legal structure is perfect for foreign entrepreneurs as it legally minimizes the international tax liabilities and hence maximizes the profits.
4. Partnership Company
This is not a limited liability company. In this, partners are jointly responsible for the company’s debts and liabilities up to the extent of all their personal assets. This legal entity requires a minimum of 2 partners, promoters, and directors and also provides 100% foreign ownership. This business structure does not require a minimum share capital value and also, it does not allow activities like banking, investment, and insurance.
5. Simple Commandite
This business structure is a limited partnership company which is formed by one or more partners but no limited partner could be held responsible for the company’s obligations except to their extent of share in the company. This type does not require any minimum share capital value. The minimum number of partners and directors required are 2 in this case.
6. Commandite by Shares
This type of company is formed between joint partners and limited partners. This legal structure requires a minimum share capital value of BD 20,000 and allows 100% foreign ownership. The minimum number of partners and promoters required are 4 and the minimum number of directors, 2. Also, in a Commandite by Shares, an external auditor is required.
So, all those relentless brainstorming sessions and hard work have finally paid off as you’re ever so close to launching your new venture in Bahrain. Congratulations! The last remaining challenge now is to follow through with all the legal and regulatory requirements to get your business the mandatory commercial registration. That’s why we’re here to tell you all about how to get a Virtual CR.
It’s not difficult at all to get a Commercial Registration for your startup in Bahrain. However, it does require a bit of your time and attention considering that you’ll need to provide a range of details about the business you’re going to start to the relevant authorities.
Thankfully, Sijilat, the Commercial Registration (CR) portal operated by Bahrain’s Ministry of Industry, Commerce, and Tourism, is there to help you at every step along the way. Here’s a brief rundown of how you can go about the process step-by-step:
Step #1: Get your eKey
You need to have your eKey handy to be able to use Sijilat’s online portal. Just to refresh your memory, having an eKey account enables you to access a wide range of government eServices using a single password. It’s completely secure and has additional layers of security including biometric verification to protect your identity.
There are two types of eKeys: Standard and Advanced. The Standard eKey is easier to create but has fewer features. For the purpose of this article, let’s focus on the Advanced eKey which is literally the key that gives you access to Sijilat’s online services.
With the Advanced eKey, you are entitled to the highest level of security Sijilat has to offer along with the access to all its eServices. This includes even those highly confidential services that require the verification of your biometrics and smart card.
Unlike the Standard eKey which can be created online, you must be physically present in your nearest eGovernment Center to create an Advanced eKey. This step is necessary to comply with the strict security protocols in place to ensure the highest level of security to the Advanced eKey. The best part is, the whole process should take no longer than 10 minutes! For more information about getting your Advanced eKey, click here.
The service centers that are available to get your eKey are Information &eGovernment Authority Office, Bahrain Investors Center, and the Social Insurance Organization. Find out more details about the service centers here.
Don’t worry, though, as it’s only a one-time requirement and the whole process is likely to be over in no more than 10 – 15 minutes.
Step #2 Register on Sijilat
Once you have your advanced eKey ready, the rest of the steps are just a walk in the park. First, head over to the official Sijilat portal at www.sijilat.bh and look for the part/menu that reads “Apply for Commercial Registration.” Click to get started. You may be prompted to provide some key details including your Advanced eKey.
Step #3 Add activity
First of all, what’s an activity? And why do you need one? In order to get a Commercial Registration, you need to add in the business activities of your company to determine the nature of goods/services that you will provide. This will give basic information about the type of products/services that you offer to customers and a general idea of the type of company that you are.
Once your Sijilat account is ready and you’re able to log in using your eKey, the next step is to add all the activities your new business will be involved in. Just click on the “Add Activity” button and choose the right option(s) from the list of available activities. Click “Add” before hitting the “Save and Continue” button.
Step #4 Upload documents
Now is the time to provide some of your personal info and supporting documents. Fill in all the mandatory fields that ask for your name, email ID, telephone number, address, and so on. Upload all the documents as and when prompted.
What are the required documents?
- A written agreement between the agent and principal
- A copy of the chamber of commerce membership card
- The trademark will be checked by Registration Directorate
Step #5 Review and Submit
Review your application once to ensure that all the required fields have the correct information. Any mistake, while not irreversible, might end up costing you time that you would otherwise be spending on something more worthwhile.
Once you submit your Commercial Registration application, you can track its status using the “Application Status Inquiry” button on the Commercial Registration menu. Click on the application you have just submitted to pay the application fee (the application status should read “Waiting for Payment”).
Make the payment using any of the available payment methods and voila, you have your Commercial Registration ready.
Note that from the point you submit your application, Sijilat will start sending updates about every action on it through text messages to your registered mobile number.