Bahrain company registration
09 April, 2014
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;
· The 2006 Bahrain US Free Trade Agreement ensures US entrepreneurs be afforded the same rights as Bahrainis. It is the first FTA between the US and an Arab state and i) allows for 100% US ownership in all Bahrain industries and ii) eliminates tariffs on industrial and consumer products (Oman passed a similar FTA in 2009);
· Bahrain is one of the few Arab countries open to Israeli entrepreneurs. Visas can be obtained and business established for those holding Israeli passports. While still a Muslim country, Bahrain has elected Jewish ambassadors and had as many as 1,500 Jewish residents;
Before entering the Bahrain market, foreign investors should consider the following compliance regulations:
· The Commercial Companies Law was established in 2001 and covers establishment, structure and governance of private business in Bahrain.
· The Legal Framework of Bahrain is a dual acting system which comprises of mainly Islamic Shari'a and aspects of conventional civil law. The Shari'a courts often hold precedence, especially in matters involving Muslims.
· Bahrain company directors are appointed, replaced and dismissed by the shareholders. Only the directors have the power to manage the day to day operations of the company. The identities of shareholders and directors are on the public registrar of companies.
· The Memorandum of Association is a contract between the shareholders and comprises i) company activities ii) registered office address iii) shareholder and director details iv) share capital and v) profit distribution method.
· Each Bahrain entity must appoint a manager. The manager is appointed by the memorandum of association or by a separate management contract. Unless otherwise stated in the MOA, the company manager shall enjoy full powers of administration, and his acts shall be binding to the company, provided that it is supported with statin the capacity he enjoys.
· Each company must lodge an annual tax estimate confirming relevant details of the company for the public register including names and addresses of all directors, address of principal place of business, details of shareholders and their shareholdings and an estimate of annual taxable profits.
· All business activities conducted in Bahrain receive government approvals and permits and licenses. There is an obligation to register particular products with the Government, including food, medical equipment, cosmetics, and medicine.
Bahrain is the most liberal country in the MEA, the most tolerant of expatriates and women. Its business laws are also the most liberal and investment friendly. Consequently, the 2012 Heritage Foundation's Index of Economic Freedom votes Bahrain as the freest economy in the Middle East and the 12th freest economy globally.
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