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Setting Up and Operating a Business in Bahrain

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Bahrain offers an open commercial environment with competitive advantages, including low business costs. Its strategic location in the heart of the Gulf makes it an ideal location for firms looking to operate in the GCC.

Business Environment

Competitive Advantages

  • Low business costs
  • Strategic location in the heart of the Gulf, making it an ideal location for firms looking to operate in the GCC

Setting Up a Business

Foreign Investment and Ownership

  • Foreign investment and 100% foreign ownership are largely allowed, except for some activities reserved for Bahraini and/or GCC citizens and companies.

Company Structures

  • Companies can be established in the Bahrain International Investment Park and the Bahrain Logistics Zone.
  • The most commonly used business entity structures in Bahrain are:
    • Companies Limited by Liability (WLL): A type of company that is popular among entrepreneurs due to its ease of setup and minimal regulatory requirements.
    • Bahrain Shareholding Company (BSC) (Closed): A type of company where the ownership is divided into shares, with a minimum capital requirement of 1 BD (approximately $2.65 USD).
    • Single Person Company (SPC): A type of company that allows a single person to own and manage the business.

Commercial Registration

Requirements

  • All firms must register with the Ministry of Industry and Commerce (MoIC) to obtain a commercial registration certificate.
  • Required documents include:
    • Passport/ID copies
    • Commercial address details
    • Draft memoranda and articles of association
    • Capital deposit certificate
    • Financial auditor’s report or evaluation letter

Accounting Requirements

Financial Reporting

  • Financial statements must be prepared in accordance with International Financial Reporting Standards.
  • Annual audit is required for public and closed joint stock companies, WLLs, and branches of foreign firms.

Financial Year

  • The company shall have a financial year that starts on January 1 and ends on December 31 each year.

Regulation for Financial Services

Central Bank of Bahrain (CBB)

  • All regulatory requirements for financial services are overseen by the CBB.

Currency Restrictions

Foreign Exchange Control

  • There are no foreign exchange control restrictions on the repatriation of profits by way of dividends or other payments.

Overall, Bahrain has a favorable business environment with minimal regulations and low costs, making it an attractive destination for entrepreneurs and businesses.