About Bahrain and market entry

Company formation in Bahrain offers excellent access to all the Gulf Cooperation Council (GCC) member states, especially Saudi Arabia which is the largest market in the region.

Bahrain offers a range of corporate vehicles for setting up a company; the best option will be governed by the nature and size of the business, as well as the requirements of the investors.

One of the key benefits of registering a company in Bahrain is that shareholders and/or directors of all types of Bahraini company are eligible for a two-year Bahrain investor work permit. Having obtained a work permit, investors can then obtain a Bahrain Residence Visa and serve as the sponsor for residency visas for family members.

Bahrain has an expanding treaty network that includes over 30 double tax agreements with key partners in Asia, Europe and the Americas, as well as across the Middle East and Africa. This is supplemented by bilateral investment treaties with countries including India, Italy and the US, and Free Trade Agreements with trading partners such as the US and Singapore.

Bahrain does not tax corporate income, personal income, wealth, capital gains or inheritance. There is no withholding tax. There are no restrictions on repatriation of capital, profits or dividends, apart from income generated by companies in the oil and gas sector. Value-added tax (VAT) is levied at a standard rate of 10%.

The Bahraini Dinar (BHD), which is fully convertible, is pegged to the US dollar at BHD1 = USD2.65.

Company Formation in Bahrain

The most frequently used vehicle for setting up a corporate entity in Bahrain is the With Limited Liability (WLL) Company, which is similar to a Limited Liability Company (LLC) in other GCC jurisdictions. Investors who set up a company in Bahrain can enjoy 100% foreign ownership, regardless of whether the company is a WLL, a partnership, a branch or a representative office.

Exceptions to 100% foreign ownership are companies that engage in reserved business activities and public shareholding companies in which foreign investors are restricted to a maximum 49% stake.

Bahrain is also home to three special economic zones:

Bahrain Logistics Zone (BLZ) was established in 2008 next to Khalifa Bin Salman Port, the leading transhipment hub in the Northern Gulf region, and focuses on third-party logistics, storage and distribution.
Bahrain International Airport offers cargo facilities, offices and retail space; the foreign trade zone has no customs duties.
Bahrain International Investment Park (BIIP) offers 100% foreign ownership of companies, duty-free access to GCC markets, exemption from 5% import duties on both raw materials and equipment, and 100% repatriation of capital. It is home to over 114 of the region’s largest manufacturing and industrial services companies, with approximately 80% of investment coming from international firms.

Benefits of Setting up a Business in Bahrain

  • 100% foreign ownership permitted
  • 0% corporate tax
  • 0% income tax for individuals
  • 100% repatriation of capital and profits permitted
  • Modern efficient communications and infrastructure
  • Abundant and inexpensive energy
  • Excellent support services from local authorities
  • Foreigners are permitted to hold freehold property
  • Geographical location is ideal for cross border business

The Time Zone is GMT + 3

Hours of work
The working week is Sunday to Thursday inclusive

Useful Links
Central Bank of Bahrain – www.cbb.gov.bh

Bahrain Economic Development Board – www.bahrainedb.com

Nationality, Passports and Residence Affairs (NPRA) – www.npra.gov.bh

How can Sovereign Bahrain assist?

Sovereign has an experienced team on the ground in Bahrain with extensive knowledge of the company formation process in Bahrain and the wider GCC.

We can also assist with commercial registration in Bahrain through the Sovereign Business Hub. The Sovereign Business Hub is a Bahrain incubator and accelerator that enables companies to both incorporate and obtain a physical office space in Bahrain without the requirement to rent separate premises in Bahrain.

Further company support services are available for business bank account set up, accounting services, HR & Payroll Services.

Speak to Sovereign about registering a company in Bahrain
Get in Touch

Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.