Company Formation in Bahrain

Khalid Khan, Tryon Lowry
July 21
Company formation in Bahrain is the process whereby a company is established by an individual or business directly or through an authorized person / company. The requirements for company formation will vary depending on the owner's nationality, company structure and business activity.

For example, the requirements for company formation for some nationalities like Bahrainis, GCC Nationals (Saudi, Omani, Kuwaiti, Qatari, Emiratis) and Americans are different than for other nationals. Bahrainis can establish any kind of company followed by GCC and American Nationals.

The requirements for capital for company formation also vary depending on the activity. Even though many articles claim that company formation only requires capital as low as BD 1000 (Bahraini Dinars One Thousand), we believe it is better to have a higher capitalization to process the application faster and help ensure approval of the company formation.

Company Formation in Bahrain

Bahrain has been and continues to be a very popular destination for investors. Recent amendments in the laws that allows for 100% foreign ownership in various business sectors has only reinforced the attractiveness of investments in Bahrain.

Investment opportunities in the Kingdom of Bahrain have gained more attention from foreign investors due to this ownership change, along with the advantages of having excellent infrastructure, government stability, and clear business policies. This traction has led to an increase of company formations in Bahrain by foreign investors.

Other factors attracting investors to Bahrain for company formation include investor friendly policies of Kingdom of Bahrain and recent events, which have made investors realize the need to invest in a country which offers unbiased rules, regulations, and a stable currency.

Company formation in Bahrain can be done by an individual using his own eKey and password or by authorizing someone else with a power of attorney to do the company formation on behalf of the investor.

If you are a foreign investor looking to make a company formation in Bahrain, you need to legalize or apostille the power of attorney as well, based on whether your country is party to Apostille convention or not.

Which Legal Structure to Choose for Company Formation in Bahrain?

At the initial stage of company formation in Bahrain, the business owner's biggest concern should be on what type of legal structure to select as it will affect the nature of the business and his liabilities in future.

Below are the types of legal structure in Bahrain that a business owner should understand before starting a business/company formation in Bahrain:
  • Bahraini Shareholding Company Closed (B.S.C Closed)
  • Bahraini Shareholding Company Public (B.S.C Public)
  • Branch of a Foreign Company
  • Commandite by Share Company
  • Partnership Company
  • With Limited Liability (W.L.L)
  • Simple Commandite
  • Protected Cell Company
  • Nonprofit company
For company formation it is always better to go for a structure which offers protection to the personal assets of the owners.

Requirements for Company Formation in Bahrain

For all our company formation clients we provide a checklist of all the requirements they must meet to be able to finish the company formation process.

Some of the basic company formation related information that is required from the investor before starting the company formation process includes:

  1. Proposed company names (maximum names that could be submitted at one time are 3).
  2. Proposed company capital
  3. Details of the partners (passport copies and CPR for Bahrain residents)
  4. Details of the directors and authorized signatories if they are different than the partners
  5. Constitutional documents, audit report and board resolution if the company formation is undertaken for a foreign company.
  6. Power of attorney in our favour to start the company formation process.

Process of Company Formation in Bahrain

The process of company formation could be complex or easy depending on the firm you are working with. We always advise that clients ensure they chose a firm with expertise in company formation and an experienced team.

The process can be divided into the following steps:

  1. A power of attorney is issued to us.
  2. Client provides us all the information required in our checklist for the company formation.
  3. Application for the company formation is submitted to the Ministry of Industry, Commerce & Tourism ("MOICT") which is transferred to Nationality, Passport and Residence Affairs ("NPRA") for security clearance for non-Bahrainis.
  4. Post NPRA approval MOICT reviews the application, asks for changes, or approves it without amendments then issues the Commercial Registration ("CR") without a license.
  5. With the CR without license the lease can be signed for the company to obtain municipality approval.
  6. If any licensing authorities' approvals are required, they are taken based on the nature of business.
  7. Post municipality and licensing approval for the company formation, the Memorandum is drafted and notarized.
  8. With the original Memorandum of Association, the investor must obtain a letter from the bank confirming the company has the account in the bank.
  9. The letter and the Memorandum is submitted and the final CR certificate with a license is issued.
  10. Company Formation in Bahrain is complete. Next step is residency.

Why to Choose Bahrain for Company Formation?

Some of the features that attract investors to the Kingdom of Bahrain for company formation are:

  1. Multiple options to invest with 100% ownership in almost all businesses.
  2. Second strongest currency in the world offering stability.
  3. Zero income tax and corporate tax.
  4. Educated workforce.
  5. Top-notch healthcare, educational, and retail amenities.
  6. One of the best places to live in terms of quality of life.
  7. Access to a market with 1.5 billion people in the region, 300 million people in Arab nations, and 40 million people in the Gulf Cooperation Council (GCC).
  8. Bahrain is ranked fourth in the Middle East for cost of living.
  9. Heritage Foundation Economic Freedom Index stated Bahrain has the highest level of economic freedom in the Middle East and North Africa (MENA) area.
  10. Bahrain is highly recommended for doing business because of factors like competitive market, low operating cost, and easy worldwide access to trade activities.
  11. Company formation in Bahrain allows the business to expand its business in other GCC region.
  12. For the companies operating from Bahrain, the import and export tariffs are very low.
  13. Investors / Business Owners feels more satisfied as compared to other GCC region when it comes to company formation in Bahrain. Through Bahrain, the visa policies and access to other Middle East countries are very easy.
  14. Cost of company formation in Bahrain is relatively low compared to other GCC countries, including rent of industrial land and offices. Fast process to set up a company in Bahrain or to establish a branch office.
  15. Company formation in Bahrain is profitable for business owners, especially those who belong to the trade sector as it enhances their business through the Arabian Gulf. Other sectors like construction, aluminum production, oil, and finance are major sources of economic stability in Bahrain.

Why to Choose Us for Company Formation Services in Bahrain?

We provide an excellent company formation service in Bahrain. Our company formation package is tailored to our clients' requirements, and all our packages include providing a business plan and assistance opening a bank account.

Our company formation team consists of people with over 50 years of experience in business, legal, marketing, and financial sectors. The partners at Khalid Khan Advisory Services come from different nationalities including the United States of America, Bulgaria, Russia, Bahrain, and India, which gives comfort to our clients and offer multiple communication options to clients looking for company formation services in Bahrain.

At Khalid Khan Advisory Services, we support the notion that diversity in terms of generational, cultural, sexual orientation, gender, and ability fosters the development of novel and distinctive ideas and viewpoints and creates the added value that enables us to mutually benefit from learning together based on the principle of equality and non-discrimination that underlies all our actions.

We treat all our clients who require our company formation services equally - irrespective of the size of their business, nationality, gender, race, religion, language etc.

We believe in transparency and honesty with the client is the most important aspect of our business and during the company formation process from the initial consultation we keep the client fully informed and updated regarding the outcome of the company formation process and stages.

For some people company formation is a mere formality for which they get paid but for us company formation is a process wherein we help the client to start his dream and this dream should be given out undivided and proper attention. When we get engaged with a client for company formation, we believe it's our duty to ensure the company formation meets all the requirements and expectations of the client including the timeframe.

Our reviews related to the company formation services are proof of what we have done for our clients. So, once you have decided to go for company formation in Bahrain. Trust us to build your dream company and we will do the rest.

Note: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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