Introduction
Bahrain, a dynamic and business-friendly nation in the Middle East, is a thriving hub for entrepreneurs and investors looking to expand in the Gulf Cooperation Council (GCC) region. With its strategic location, liberal economy, and investor-friendly policies, Bahrain offers a seamless business setup process with 100% foreign ownership in most sectors. The country ranks among the top investment destinations in the GCC due to its advanced financial infrastructure, strong regulatory framework, and zero corporate or income tax policies.
According to the 2025 Index of Economic Freedom published by The Heritage Foundation, Bahrain’s economic freedom score is 65.6, positioning it as the 55th freest economy globally. Within the Middle East and North Africa (MENA) region, Bahrain ranks 4th out of 14 countries, reinforcing its reputation as an attractive business destination. Traditionally reliant on oil, Bahrain has diversified its economy into key sectors such as finance, manufacturing, logistics, and technology. This economic shift, coupled with its low-cost business environment, free trade agreements, and simplified registration process, makes Bahrain an ideal location for startups, SMEs, and multinational corporations.
This comprehensive guide will walk you through the process of company registration in Bahrain, covering the requirements, benefits, costs, taxation, and necessary documentation to establish a successful business in the country.
Why Register a Company in Bahrain?
- 100% Foreign Ownership: Bahrain allows full foreign ownership in most business sectors, making it an attractive destination for international investors.
- Modern Infrastructure & Connectivity: The country offers well-developed infrastructure, an efficient transportation network, and a stable communications system to support business operations.
- Strategic Location: Bahrain provides easy access to major markets in the Middle East and Africa, making it a gateway for international trade and investment.
- Flexible Residency & Work Policies: International investors and expatriates can easily relocate to Bahrain without facing strict visa, residency, or work permit restrictions.
Procedure for Company Registration in Bahrain
To register a company in Bahrain, an entrepreneur must follow these steps:
1. Choose the Business Structure
The first step is to select an appropriate business structure that aligns with your business activities. Bahrain offers various legal entities, including Limited Liability Company (LLC), Bahrain Shareholding Company (BSC), Partnership Firm, Single-Person Company, and Branch Office.
2. Obtain an Electronic Key (e-Key)
Register with Bahrain’s e-Government Authority to obtain an e-Key, which is required for accessing the online registration system and submitting documents.
3. Obtain a Power of Attorney (Optional)
If the e-Key is not accessible or you are appointing a third party (such as a business consultant or lawyer) to handle the registration process, a Power of Attorney (PoA) must be obtained and notarized.
4. Reserve the Business Name
- Submit at least three potential business names to the Ministry of Industry, Commerce, and Tourism (MoICT) for approval.
- The name must comply with Bahrain’s business naming regulations.
- Once approved, the name reservation certificate is issued.
5. Obtain Approval for the Business Address
- Register an official business address and obtain approval from the relevant authorities.
- The registered office must be a commercial property suitable for business activities.
6. Prepare the Memorandum of Association (MOA)
- Draft the Memorandum of Association (MOA), which defines the company’s structure, shareholders, and operational guidelines.
- Submit the MOA to the Ministry of Justice for approval and notarization by a public or private notary.
7. Open a Business Bank Account
Open a corporate bank account in Bahrain and deposit the minimum required share capital based on the business structure.
8. Apply for Company Registration
- Submit an application for company registration to the Ministry of Industry, Commerce, and Tourism (MoICT), along with all necessary documents.
- Upon approval, the Commercial Registration (CR) certificate will be issued, allowing the company to commence operations.
Documents Required to Register a Company in Bahrain
Here are the various documents that must be submitted for Bahrain company registration:
- Properly completed application for business incorporation
- Power of Attorney
- Memorandumof Association & Articles of Association
- Registered office address details
- Copies of shareholders’ passports
- Copies of the directors’ passports
- Capital deposited in the bank
Eligibility Criteria for Bahrain Company Registration
The eligibility criteria for company registration in Bahrain are discussed below:
- Shareholders: An LLC must have at least two shareholders.
- Directors: A minimum of one director for an LLC is required in Bahrain. To form a BSC, at least three directors are needed.
- Capital requirement: A BSC firm must have a share capital of BHD 250,000. A minimum share capital of BDH 20,000 is needed for a Limited Liability Company registration in Bahrain.
- Registered business address: The corporation must have a registered business address in order to register a company in Bahrain. All formal correspondence from the company is delivered to its official company address.
Business Entities for Company Registration in Bahrain
The various business structures available for company registration in Bahrain are listed below:
Limited Liability Company (LLC/WLL)
A Limited Liability Company in Bahrain—also known as With Limited Liability (WLL) in Bahrain—is a popular corporate structure for international entrepreneurs, as it allows 100% foreign ownership in most sectors.
An LLC can have a maximum of 50 shareholders and requires a minimum of 2 shareholders and 2 directors. The minimum share capital for an LLC is BHD 20,000.
Bahrain Shareholding Company (BSC)
A Bahrain Shareholding Company (BSC)—also known as a Public Joint Stock Company—is best suited for companies that plan to engage in large-scale financial and capital investments. It is ideal for businesses looking to list their shares on the Bahrain Bourse (BHB), the country’s stock exchange. A BSC requires at least three directors and a minimum share capital of BHD 250,000.
Company Limited by Shares
A Company Limited by Shares consists of two types of partners: general partners (joint partners) and silent partners. General partners are responsible for managing the company and have unlimited liability, while silent partners contribute capital but do not participate in management. This business structure requires at least four partners and a minimum share capital of BHD 20,000.
Partnership Firm
A Partnership Firm is an agreement between two or more individuals to operate a business and share its profits. In most cases, the partners have unlimited liability for the company’s debts and obligations. A minimum of two partners is required to form a partnership firm in Bahrain.
Branch Office
Bahrain branch office is an extension of a foreign parent company operating in Bahrain. It does not have a separate legal identity, meaning the parent company is fully liable for the debts and obligations of the branch. A branch office must appoint a local manager to oversee operations in Bahrain.
Single-Person Company (SPC)
An SPC is a business entity owned and controlled by a single individual. The owner’s liability is limited to their invested share capital. This structure allows a sole entrepreneur to establish a business with the benefit of limited liability.
Taxation Structure for Companies in Bahrain
1. Corporate Income Tax:
- General Businesses: Bahrain does not impose corporate income tax on most businesses.
- Oil, Gas, and Hydrocarbon Sector: Companies engaged in the extraction or refinement of hydrocarbons in Bahrain are subject to a 46% tax rate on their net profits.
- Domestic Minimum Top-up Tax (DMTT): Effective from January 1, 2025, Bahrain will implement a 15% minimum tax on multinational enterprises (MNEs) with consolidated annual revenues exceeding €750 million in at least two of the preceding four fiscal years. This aligns with the OECD’s global minimum tax framework.
2. Value-added tax rate: The standard VAT rate in Bahrain is 10%.
3. Stamp Duty: A 2% stamp duty is levied on the transfer of real estate. If paid within 60 days of the transaction date, the duty is reduced to 1.7%.
Cost for Company Registration in Bahrain
The cost to register a company in Bahrain is determined by a number of elements, including registration fees, document preparation costs, tax payments, acquisition of the legal address, etc.
- Bahraini company incorporation costs can begin at BHD 1000.
- It costs approximately BHD 100 to obtain an economic activity license.
- Additionally, work permits for workers are charged BHD 172 annually.
Advantages of Bahrain company registration
The advantages of Bahrain company registration are briefly discussed below:
1. Free Trade Agreements
The Kingdom of Bahrain has signed several free trade agreements with different nations in order to increase economic prospects and lower trade obstacles. Bahrain has seen a phenomenal rise in imports of 32.60% as a result of signing these FTAs.
2. Tax advantages
Corporate income tax and withholding tax are not applied to businesses that are incorporated in Bahrain. Additionally, Bahrain has established numerous double taxation treaties with other nations, assisting entrepreneurs in avoiding paying two taxes.
3. 100% foreign ownership
Bahrain permits 100% foreign ownership in the majority of businesses.
4. Advanced Financial Sector
Globally, Bahrain has steadily risen to become a leader in Islamic finance. In the Middle East, this country boasts the highest number of Islamic financial organizations.
Conclusion
Bahrain is a small Arab nation located on a peninsula on the Persian Gulf’s western shore. The nation’s location near Qatar and Saudi Arabia makes it an accessible entry point into the global economy. In addition to that, the country has several free trade agreements, double taxation treaties, and 100% foreign ownership. All this makes the country an attractive location for entrepreneurs who want to register a company in Bahrain.
Consult our professionals at OnDemand International if you’d like advice on how to register a company in Bahrain. Our experts will assist you through the process of company registration in Bahrain.
FAQ’s
An application for company registration in Bahrain should be filed to the Ministry of Industry, Commerce, and Tourism (MoICT), along with all the necessary documents.
- Bahrain, one of the top GCC nations, offers tremendous opportunities for investment and new business endeavors.
- Bahrain offers 100% foreign ownership in the country.
- The country has modern infrastructure and transportation facilities and a stable and effective communications network.
- The country has a favorable location for international business and investment and provides simple access to the marketplaces of the Middle East and Africa.
Yes, a foreigner can incorporate a business in Bahrain. Additionally, Bahrain allows some companies to have 100 percent foreign ownership.
Bahraini businesses are fully tax-free, with the exception of those in the mining, oil, gas, and refining industries, which are subject to a 46% tax rate.
- The Kingdom of Bahrain has signed several free trade agreements with different nations.
- Corporate income tax and withholding tax are not applied to businesses that are incorporated in Bahrain.
