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How to set up a Small Business in Bahrain in 2020
  • Article, Bahrain

How to set up a Small Business in Bahrain in 2020?

Bahrain has become a huge attraction for investment opportunities in the past few years. As per the World Bank’s report in 2019 on doing business in Bahrain, the Kingdom has ranked as one of the best places for doing investment and it continues to make the most of it.

Investors from across the globe are now confident that Bahrain offers a rewarding investment environment, which brings us to the importance of forming or registering a company in the Kingdom.

Bahrain is an island Kingdom made up of a group of islands, located in the stretch of the Qatar peninsula and the north-eastern coast of Saudi Arabia. The government here welcomes foreign investment in Bahrain with open arms so as to boost its economy. As a result, the economic laws of the Kingdom have been significantly liberalized. Bahrain also recently passed some laws liberalizing foreign property ownership and tightened its anti-money laundering laws. In addition, the visa and immigration policies are made simpler to encourage business development and ease the process of setting up a foreign company in Bahrain.

Private organizations and firms, specifically in Information and Communications Technology (ICT), Tourism, Education, Banking, Healthcare and downstream industries and Financial Services & Insurance (BFSI) are flourishing in Bahrain.

Bahrain is a country that focuses on development and offers a business-friendly backdrop that is cosmopolitan, safe and unsurpassed in the Arabian Gulf.

Why should you invest in Bahrain?

Being a developing country in the Middle East, Bahrain is all set to grow and advance in a big way. Let’s take a look at some advantages of investing in Bahrain:

  • The customs duty in the Kingdom is low, hence it favours exports
  • The corporate policies are quite business-friendly
  • The legal system is clear, coherent and simple
  • The banking sector is developing at a fast pace, resulting in advanced banking facilities
  • There is a huge scope of business growth and expansion
  • The people of the Kingdom are pleasant and its culture is very supportive of entrepreneurial and industrial growth
  • It has an advanced infrastructure, which is well-equipped with facilities to make the company incorporation procedure in Bahrain simpler
  • It is the major port hub in the region, which offers convenient access to all the markets in the Middle East
  • The tourism and entertainment industry in Bahrain has been flourishing and expanding year on year
  • The standard and quality of life and variety of food in the country is quite tempting

Bahrain is now one of the major players in the financial and banking services throughout the world. Its strategic location and its sophisticated digital telecommunications systems facilitate communications with all business hubs and financial centres. Another big advantage is that the regulation, licensing, and supervision of advisors offering investment and any other financial advice in or from Bahrain is also quite regulated. This safeguards the investors from the probability of negligence or fraud.

What all should you know to start a business in Bahrain in the year 2020?

  • Firstly, gain considerable knowledge about the region.
  • As per the law, you must have a local partner who should be holding the majority of the shares of your company, and thus controls the business.
  • After Bahrain company formation, the Ministry of Commerce should have ensured that you possess the minimum required capital for investment.

Also Read: Top 10 Business Opportunities in Bahrain

However, it is always recommended to consult a local business advisor right from the beginning. A reputed and experienced consultancy like IMC can help you sail through the formalities of company incorporation procedure in Bahrain, and help in attaining your business objectives, whether you are thinking of setting up a start-up or a larger firm.

What are the available legal structures in Bahrain?

When thinking of Bahrain company formation, you could opt from among the following legal entities:

1. Limited Liability Company

2. Branch Office

3. Partnership

When setting up a business in Bahrain, a partnership could fall in three categories:

  • Partnership Limited by Shares 
  • Limited Partnership 
  • General Partnership 

4. Sole Proprietorship

5. Bahrain Shareholding Company

  • Public Shareholding Company 
  • Closed Shareholding Company 

What are the steps to set up your small business in Bahrain?

Company incorporation procedure in Bahrain involves several requirements, which must be followed to run the business. The key steps are:

  1. Registering a company name: Then, you need to register your company name which would help identify your business forever. The Ministry of Industry and Commerce (MOIC) has outlined some guidelines to keep in mind when selecting a business name. You must ensure that you comply with those laws. An entrepreneur is allowed to propose up to four business names at a time.
  2. Doing the commercial registration of your company: The Commercial Registration papers are released by the Bahrain Investment Centre. They issue the papers after checking and ensuring that there is no fault in the application filled in the initial stage. The papers are given after paying the required fees.
  3. Licensing and approval process: Licensing and approval is required when a company or business does not get their Commercial Registration papers right away. Therefore, they need to follow this additional step for registering their company in Bahrain.
  4. Other Approvals: After registering your company successfully, the next steps is to open a company bank account, then lease an apt office space, and then hire Bahraini employees etc.
  5. Other Approvals: After registering your company successfully, the next steps is to open a company bank account, then lease an apt office space, and then hire Bahraini employees etc.

Company formation in Bahrain guarantees a huge earning potential, benefits of various tax exemptions, convenient facilities, state-of-the-art infrastructure, and liberalized public policies along with free trade barriers. We, at IMC, assist entrepreneurs, companies and corporates to set up their business in Bahrain, while taking advantage of all the benefits this economic and financial hub provides. Our professionals would take charge of all the visa, banking, licensing and legal formalities and help you to glide through the company incorporation procedure in Bahrain without any worry. If you are planning to start your own small business in Bahrain in 2020, please contact us and we would be glad to assist you.

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7 Tips for Women Who Wish to Start A Business
  • Article, Bahrain, India, Oman, Saudi Arabia, Singapore, U.A.E

7 Tips for Women Who Wish to Start A Business

These days, women have loads of opportunities and the required abilities to start a business – be it full-time or part-time. Social media has also helped in changing the perception and women these days are taking the risks and becoming entrepreneurs.  There are many women who are also quitting their full-time jobs and starting their own ventures. So if you’re also thinking of starting your own enterprise but confused about how to go about starting it, then read on. We have collated seven tips for you, which would help you to kick-start your business.

1. Prepare an impressive pitch:

The first step before you start talking to your network or looking for investors, you must prepare a good pitch. You should know which product you are selling and why a customer should spend their money on it? So do you know what an elevator pitch is? Your pitch should be such that it is impressive yet not long. It should be crisp and something that grabs your attention quickly. It should also be something that enables people to understand your product or service and how the customers would be benefitted using it. Think of how your product is filling the gap in the market and giving what has been lacking.


2.  Study your market in detail:

After the sales pitch, do a detailed study on the customer base, that is, who will buy your product or service. What’s the size of your customer base? Are you targeting a niche customer base or generic one? Find answers to these questions first and then decide to present your idea to your potential investors.


3. Upskill yourself on financial aspects and knowledge:

Before making a sales pitch to investors, you must be confident with numbers, financials and data. Managing a business is not possible without mastering the financials of your venture; in fact your data and numbers should be on your fingertips. In case you’re not so confident about the financial aspects, you must upskill yourself and learn this from someone experienced and good at it. You should have answers to questions such as “What are the capital requirements of your business over time?”; “What are your gross margins?”; “What’s the time frame you are looking at for a break-even?” etc.


4. Don’t think twice and ask for help if needed:

You should not hesitate to look for help and advice in case you are have any doubts in how to set up your business. In this, networking is a very critical skill that should have so as to flourish in the entrepreneurial world. You must confidently tap into your network of acquaintances and friends, which is crucial to run your own business.


5. Have a useful board of advisers:

Having a board of advisers in an early stage in your company could really benefit your company’s image. While deciding the board members, make sure that you pick experienced people who can act as trusted advisers in your venture. These investors can advise you in all decision-making process and could even take you to your initial customers. So to start with, check and invite individuals from your own network who might have relevant experience. After deciding the board members, you could plan in-person or even virtual meetings on a periodic basis for discussing important issues.


6. Create a hiring roadmap:

Make a list of people you will require in your company in the coming 1 year or so and then start finding and hiring them. These people could be working with you full or part time or could be working for equity till the time you get some funding.


7. Work harder and faster than others!

Last but not the least, get ready to work harder than your competitors, or what you have done earlier. Do you know that most of the small business owners or entrepreneurs put in over 60 hours every week? Also, be ready for the inevitable failures or setbacks. It’s all part of the game. You must also not ponder too much and delay making the decisions, as others might launch the same product or service before you.

So, starting your own venture might have multiple challenges but if you keep these tips in mind, you’re surely off to a great start!

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Starting a small business in Bahrain? Here is all you need to know
  • Article, Bahrain

Starting a small business in Bahrain? Here is all you need to know

Bahrain is a small island country located in the Middle East. It shares borders with Qatar, Saudi Arabia, Iran and the Persian Gulf. The Kingdom of Bahrain has the fastest growing economy in the Arab world. The economy of the country is majorly driven by the banking, tourism and oil and gas sector.

In order to further boost its economy, the government of Bahrain is taking measures like allowing foreign investors to have 100% ownership in a wide array of business sectors, liberalization of economic laws, tightening anti-money laundering laws, easing out visa and immigration policies and much more. All of these measures work towards bringing foreign investment into the country and to enhance business development within the nation.

Apart from this, Bahrain provides a rewarding investment environment for investors from all over the world. In fact, as per the 2019 report of the World Bank on ‘doing business in Bahrain’, the country is one of the best places for investment in the region. Moreover, it offers a safe and cosmopolitan business-friendly atmosphere to investors aiming for foreign investments in Bahrain.

Reasons to Invest in Bahrain

Bahrain is an emerging country in the Middle East and investing or doing business in Bahrain has the following advantages:

  • Bahrain lies in the heart of the GCC which provides the advantage of easy access via air, land and sea from the Middle East and North Africa.
  • The country boasts of its robust infrastructure and well-equipped amenities
  • Bahrain holds a 40-year track record as the Gulf’s leading financial centre
  • The scope of business growth is vast
  • The legal system in the country is simple and lucid
  • The corporate policies in Bahrain are business-friendly and liberal
  • The country favours exports due to its lower customs duty
  • Bahrain offers advanced banking facilities
  • The country features a modern global economy
  • The cost of living in Bahrain is quite low as compared to other neighbouring countries
  • The local workforce in the county is educated, skilled and efficient
  • The tourism and entertainment industry in the county are booming year on year
  • It has one of the highest qualities of life in the Middle East.

Major Considerations to Make Before Starting a Business in Bahrain

If you have decided on doing business in Bahrain, here are a few things that you should consider.

  • You must have a good knowledge of the region. It is vital to understand the business sectors that you intend to operate in, study the market conditions, competition, etc.
  • There is a requirement of a local partner who holds the majority interest (share capital) and can, therefore, control the business. It can be a company or an individual.
  • Post your foreign company registration in Bahrain, you need to convey to the Ministry of Commerce that you have at least the minimum required capital to invest.

Types of Legal Entities That Can Be Incorporated in Bahrain

When thinking of business set up in Bahrain, you may choose from among the following five legal entities:

1.Limited Liability Company

A Limited Liability Company can have a maximum of 50 shareholders (having at least 1 local resident shareholder) and they are liable only to the extent of the share capital they have invested in the company.

2.Branch Office

In order to incorporate a Branch Office, a foreign company has to get approval from the Ministry of Commerce and Agriculture. It has to appoint a local sponsor.

3.Partnership

It has 3 types:

  • Partnership Limited by Shares

Partnership Limited by Shares comprises of two types of partners namely general partners and limited partners. It is formed by at least 1 general partner and 10 limited partners. The general partners are fully liable for the debts and actions of the company while the liability of limited partners is restricted to the amount of their capital investment.

  • Limited Partnership

Limited Partnership is formed by at least 1 general partner who is liable for the partnership obligations and 1 limited partner who bears the limited liability and does not participate in the business management.

  • General Partnership

In the case of General Partnership, all the shareholders are jointly and severally liable for the company’s debts and obligations.

4.Sole Proprietorship

A Sole Proprietorship is owned by a single person who bears unlimited liability for the business.

5.Bahrain Shareholding Company

A Bahrain Shareholding Company is required if the shareholders intend to engage in banking or insurance business. It has 2 types:

  • Public Shareholding Company

A Public Shareholding Company (also called as a Joint Stock Company) is formed by at least two shareholders who are only liable to the extent of their capital investment. The shares of this company can be subscribed by Bahrain GCC and non-GCC citizens.

  • Closed Shareholding Company

A Closed Shareholding Company is formed by at least two shareholders. The shares of this company are not offered to the general public for subscription.

Procedure to Follow for Starting a Small Business in Bahrain

1.Select a Legal Structure

The very first step is to carefully choose the legal structure of your business as it has a direct impact on how your business will be managed, how ownership is held, personal liability of the owners, etc.

2.Choose a Company Name

The next step is to select the company name based on the guidelines issued by the Ministry of Industry and Commerce (MOIC). You can propose up to 4 names at a time.

3.Commercial Registration of the Company

On verification of the application form and payment of the necessary fees, you can go for commercial registration of the company. For companies, commercial registration papers are issued at the Bahrain Investment Centre and for individual establishments at the Ministry of Industry and Commerce Commercial Registration Directorate.

4.Licensing and Approval

In case, if you do not get the commercial registration papers right away, you will have to apply for a license or get approval from more than one Governmental authority.

5.Other Requirements

Once your company is registered, you will have to comply with other requirements such as opening a local bank account, leasing an office space, hiring local employees, etc.

In order to ease the process of Bahrain company formation, you may seek help from a professional business advisor who can guide you through the company registration complexities and help you achieve your business goals. IMC Group can help you in this regard and make the entire process of doing business in Bahrain a hassle-free and convenient task.

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Hundred Start-up’s in Arab Chosen to Benefit from Bahrain’s Robust Financial Offerings
  • Bahrain, Newsletter

Hundred Start-up’s in Arab Chosen to Benefit from Bahrain’s Robust Financial Offerings

A new structured program would enable the start-ups in Arab to briskly enhance their businesses and fetch a wider spectrum of assistance in Bahrain.

Bahrain recently announced rolling out a brand new program that is going to aid about 100 Arab start-up companies, which are modelling the Fourth Industrial Revolution, at the World Economic Forum (WEF), held recently in Jordan. This structured programme would allow these Arab start-up companies to scale up their businesses rapidly, thus, getting an access of a wider range of support in Bahrain.

Here is the press release about this announcement. Please click this link to view a list of all the 100 start-up businesses from across the Arab World: https://widgets.weforum.org/arabstartups/

The special advantages given to these 100 Arab start-up companies include:

  • An entry to the market of Bahrain for all businesses that have been marked under the 100 Arab Start-Ups banner – and also going back to the ones that were selected in the year 2017
  • The applications to be fast-tracked for establishing a presence in Bahrain
  • Creating a special concierge service for 100 Arab Start-Ups to assist these start-ups to steer through and reap benefit from Bahrain’s ecosystem
  • A chance to pitch and get the required funding from Bahrain’s Sovereign Wealth Fund, and from the VC partners of Al Waha Fund of Funds and even from the family offices in the Kingdom


Khalid Al Rumaihi, who is the chief executive of the Bahrain Economic Development Board, said that the 100 Arab start-ups moulding the Fourth Industrial Revolution is a very good initiative and they would jointly make sure that it not just an annual event but a continuous source of assistance and aid to the most-promising businesses so that they can become world leaders in their chosen fields. These firms or businesses would outline the future and therefore, more new prospects that Bahrain can offer along with some special incentives are being opened to provide the best-possible and comprehensive support. In affiliation with the World Economic Forum, with this programme, the best-possible support is being offered to the best chosen businesses.

As per data from MagniTT (a firm selected twice by the 100 Arab Start-Ups initiative), there has been a 31 percent rise in investments as compared to 2017 and a new record was established for regional start-up funding in 2018.

The foreign investment continued to be stable in the year 2018 as about 30 percent poured in from outside the Arab territory, while fintech shot over e-commerce as the top-most industry because of an 8 percent rise in deals since 2017.

A selection committee of professionals and experts on the start-up ecosystem worked along with the World Economic Forum and the EDB for screening and selecting the 100 start-ups.

With the support and presence of TM King Abdullah II and Queen Rania Al Abdullah, this meeting assembled over 1,000 top leaders from government, civil and business society, along with leaders from the Levant and North Africa, Gulf Cooperation Council (GCC) countries, and major global stakeholders from Europe, East Africa, and the US.

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Top Business Opportunities to be explored in Bahrain in 2019
  • Article, Bahrain

Top Business Opportunities to be explored in Bahrain in 2019

Bahrain is a nation made up of an archipelago of about 30 islands and has acted as the crossroads for some key trade routes because of its strategic location in the Arabian Gulf. Over the last decade, Bahrain focused a lot of its efforts in promoting its economy and make its business environment dynamic so as to foster economic growth. We have collated a list of the top business opportunities in Bahrain that can hit the bulls-eye in 2019.

Below are the top six business ideas:

  1. Financial Consulting and Banking: The financial and banking sector became the most flourishing businesses in the Kingdom towards the end of last year. The highly- developed banking system in Bahrain accounts for almost 17.2% of the country’s GDP. The banking sector includes various traditional banks and also some Islamic banks, thus providing the country varied options of financial services like specialized banks, retail/wholesale banks, insurance and other financing companies, investment advisors, insurance and securities brokers, , money changers, and mutual funds. Bahrain has made its position as a banking hub for whole of the Middle-East, particularly since Islamic Banking was introduced.
  1. Construction Agency: Bahrain is witnessing huge inflows of investment in the construction industry since the past couple of years. This sector makes up for almost 7.5% of GDP out of the total financial activity. Thus, if you are planning to establish a business in the construction sector here, we recommend you to seek professional guidance for company formation in Bahrain. 
  1. Real Estate: With increasing population, the requirement for both official and residential spaces goes up. This sector boomed in the kingdom as tourism has been thriving and hence, there was a rising demand for space; this trend is likely to stay in 2019 as well. As per data, the Real Estate sector in Bahrain has been fairly sustainable and offers attractively high returns. By getting into the Real Estate in Bahrain, the investors can access a new, much wider market that offers an array of prospects.
  1. Hospitality: By last year end, Bahrain saw a rise in demand in the hospitality and tourism industries. As a matter of fact, the GCC hospitality industry is preparing to gain momentum and growth after a break because of the falling oil prices. This year, the oil prices are expected to recover; also, Bahrain is going to welcome a new chapter of its economy’s upward swing and prosperity, especially in the hospitality sector. With many forthcoming mega-events, boost in tourist traffic, various regulatory initiatives and other efforts by the government, especially towards the tourism and hospitality sector, this sector’s growth and productivity is quite high.
  1. Retailing: The retailing industry witnessed a boom last year and it seems to be growing at a speed because of various factors. The increase in tourism, the upsurge in infrastructure projects, low cost of living here obviously added to reasons for having more retail stores. Therefore, retailing industry has seen unprecedented development in the recent past in Bahrain, and it shows no signals of slowing down in 2019.
  1. Event planning: With several global players entering the Bahrain market, hosting a conference or an event requires careful planning and expertise; therefore, setting up an event planning company in the Kingdom is another top business opportunity that can be explored.

If you are looking for assistance in setting up a business or for company formation in Bahrain, we would be glad to assist you in providing all the latest information and knowledge regarding the business trends in Bahrain. Also, for getting accounting services in Bahrain, get in touch with us, and we will be happy to help!

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Process of Setting up a Foreign Company in Bahrain in 2019
  • Article, Bahrain

Process of Setting up a Foreign Company in Bahrain in 2019

A business-friendly country, Bahrain always welcomes foreign investors. Having an easy and streamlined procedure for foreigners to invest in the nation, Bahrain also offers them many added facilities while they establish their business. For foreign company registration in Bahrain, you should be aware of the country’s business environment. To do this, the first step is to find about the various types of business entities possible in the country, followed by how to incorporate a company, and then what is the required legal documentation. Seems like a lot of information to find? Worry not! In this article, we have collated all the important information that will help you to set up a company in Bahrain in 2019.

Steps to set up a Company in Bahrain

To start a legal business in Bahrain, there are various things you need to complete. As a first step, you need to find which all approvals you would need and then fill an Application Form for Commerce Registration in the Bahrain Investors Centre (BIC). Then with the guidance of a BIC representative, you have to visit the particular ministry and after paying a fee of BD 2 post gaining the needed approvals, you would have to submit the required legal documents. You must note that the registration process typically takes 1 to 5 business days. Here are the detailed steps to establish your company in Bahrain:

  1. Opt for a Legal Structure: The most important decision as an owner of a business is to decide a legal structure for the enterprise you are starting. This decision would affect how your business would be managed, what will be the company’s owner’s personal liability, and how the ownership would be held. You could opt out of the following legal structures:
  • Bahrain Shareholding Company (BSC – Open)
  • Bahrain Shareholding Company (BSC – Closed)
  • With Limited Liability Company (WLL)
  • Partnership Company
  • Simple Commandite
  • Commandite by Shares
  • Single Person Company (SPC)
  • Individual Establishment
  • Foreign Company Branch
  1. Finalizing a Company Name: A company name represents your products or services, brand and business forever; therefore, the ministry of Industry & Commerce (MOIC) has fixed certain guidelines to enable business owners search for the most apt company name. Investors should ideally recommend four business/company names; however, if any of the suggested names violate the guidelines, it would be rejected.
  2. Commercial Registration Papers: Commercial registration papers for companies are made at the Bahrain Investors Centre. But if it’s an individual enterprise, the papers will have to be made at the Ministry of Industry and Commerce Commercial Registration Directorate.
  3. Licensing and Approval: Some enterprises are given the commercial registration immediately from the Ministry of Industry and Commerce, but a few others might need a license/approval especially from over one government authority before getting a commercial registration.
Documents for starting a company in Bahrain
  • A duly-filled company registration application form
  • Draft of memorandum of association
  • A resolution from board of directors resolving to set up the company in Bahrain
  • Company representatives’ national ID card copies
  • Resumes of all partners
  • Lease agreement as a proof of the business’ commercial address

Bahrain is not only a thriving economy, but is also offering very beneficial opportunities and multiple avenues for setting up new businesses to investors. If you are looking for some professional help for getting foreign company registration in Bahrain, our team of expert business advisors will guide you at each step. Thinking of starting your own company in Bahrain? Do contact us and we would be pleased to help you!

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Tax Structure in the GCC
  • Article, Bahrain, Oman, Qatar, U.A.E

Tax Structure in the GCC

The Gulf Co-operation Council (‘GCC’) region is undoubtedly a very attractive jurisdiction for global investments mainly because of its favorable tax regimes. As per GCC’s diversification strategy and to decrease reliance on revenue from hydrocarbons, GCC nations have devoted to launch new indirect taxes and some other taxation reforms. But the developing GCC tax regimes throw up a challenge to all the foreign investors wanting to set up their presence in the GCC, or acquire a business, sell, or divest in the GCC.

In this article, we are going to give you an overview of the key taxes in the GCC.

Taxes in the GCC Region – An Overview

  1. Corporate Tax

Corporate tax is a direct tax that is levied on a company’s taxable profits. People not residing in the GCC nation could be subject to corporate income tax or may be withholding tax as per the local rules in the particular GCC country. The non-residents doing business in a GCC country having a permanent setup are subjected to corporate income tax; however, non-residents earning taxable income in that GCC country could be subject to the withholding tax.

Some GCC countries like the UAE and Bahrain enforce only corporate tax on businesses operating in the oil and gas field and foreign bank branches. In the KSA, Kuwait, and Qatar, corporate tax is applicable on the profit share that is attributable to the non-GCC shareholders of the domestic entity.

  1. Withholding Tax

Withholding tax is that tax, which is deducted at source on the specific payments done by a resident in the GCC nation to someone outside of that nation. Varying rates are applicable depending on what kind of payments is made. Bahrain and UAE do not impose this tax, but other GCC nations impose withholding taxes if a resident pays interest or dividends and royalties to a non-resident.

  1. Zakat

Zakat is a type of Islamic tax that has been only enforced in some GCC nations like the KSA and Kuwait as of now. In the KSA, Zakat is mandatory on the shareholders of local companies who could be Saudi or GCC nationals. This tax is to be paid by the local company and is applicable at the rate of 2.5% dependant on the higher of the adjusted net profits or the Zakat base that is attributable to the shareholders who could be Saudi or GCC citizens.

  1. VAT

A type of consumption tax that is imposed on goods and services supply and is charged typically on the value which gets added on each stage of the supply chain. The GCC countries implement this tax at a 5% standard rate. Every GCC nation can enact their own VAT legislation which will be based on some common principles. Till date, KSA and the UAE have implemented VAT on 1 January 2018. Then, Bahrain went on to implement VAT on 1 January 2019. While doing transaction planning, companies should evaluate the VAT effect of the asset transfer carefully and check if such VAT treatment is applicable on the transaction.

  1. Excise Tax

Known as the ‘sin tax’, excise tax is a type of indirect tax that is levied on particular goods that could be detrimental to health or environment. Till date, the KSA, the UAE, Qatar and Bahrain have implemented this tax on tobacco products at 100%, carbonated drinks at 50%, and energy drinks at 100%.

  1. Customs Duty

The GCC nations follow a unified customs duty regime and this duty is imposed basically at the first point when the goods are entering in the GCC. Imported goods are subjected to customs duty at the rate of 5% of the total cost, freight (‘CIF’) invoice value and insurance. But, some goods could be subject to customs duty at a much higher rate, while some other goods, are totally exempt.

  1. Transfer Taxes and Stamp Duty on Real Estate

Stamp duty is imposed in Oman and Bahrain on transferring or registering real estate. In the UAE, there is a registration fee when someone transfers ownership of land or shares in the companies holding real estate.

To conclude, the GCC countries have maintained minimal or zero taxes as it attracts investments in the region. However, announcing new taxes like VAT, the variance between local tax legislation and double tax treaties and the approach of tax authorities make it complex for global investors. But if you are a foreign investor who has business interests in this region, you should keep abreast of all the GCC tax developments and re-examine your management strategies of tax risk in the region.

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Bahrain is all set to fortify its trade ties with India; assures of vast investment opportunities
  • Bahrain, Newsletter

Bahrain is all set to fortify its trade ties with India; assures of vast investment opportunities

Simon Galpin, who is the Managing Director of Bahrain Economic Development Board (EDB), said Bahrain views the fourth industrial revolution (4IR) as one of the biggest opportunities which is going to help their economy to become more dynamic and responsive.

Providing an access to the Gulf region, Bahrain is all ready to make a big presentation at the WEF summit for attracting new investments and is also giving an assurance of opening up a wide array of opportunities specifically for the Indian investors.

Galphin said during an event in the annual meeting of the World Economic Forum (WEF) that they are in quest of capitalizing on the 4IR prospect by launching a reform series across the economy, specifically in the digitizing industries like finance, and also in the education sector and logistics.

He also mentioned that the Davos attendees think of Bahrain as very promising and also notice the huge potential for company formation in Bahrain and the opportunities the kingdom has to offer for all the global investors. Having said that, they are also very surprised by the effortlessness with which new businesses are able to set up their offices and run their operations.

On meeting some Indian leaders here, he was of the view that both these countries (India and Bahrain) go back with a long history of financial and cultural relations and both the parties are eager to advance their relations to a deeper level in the coming times.

Through this collaboration, both these nations are looking at building an India-Bahrain business corridor, which will be a mutually-advantageous affiliation that would ensure new trade opportunities, interchange of ideas and also advancement of new innovations.

The political leaders and business heads in India are equally excited as are the leaders in Bahrain as this collaboration will present shared opportunities because of the advancements happening in Bahrain.

He also said that one of the Indian investors he was talking to was surprised and excited because he could now establish his business or a joint venture in real estate in Bahrain without even having to go to any government department even once, as everything was available online in very simplified procedures.

Talking about the future plans that Bahrain EDB has in store for India, Galpin also said that they did a very successful road show in India recently, where they got a chance to meet with some government officials and companies, all of whom seemed quite keen on reinforcing the ties between these two nations.

Because of such successful examples, another EDB office is being opened in India, which is in addition to the current ones in Mumbai and Delhi.

He also mentioned that the Indian investors can gain because of the ‘Rules of Origin’ principle which applies in worldwide trade, which allows them to enter less open markets such as the United States and then they could assist build up emerging industries like the fintech, which is enormously promising in the kingdom.

Previously in a session on the event of ‘India 4.0: Making technology work for all’, Galpin had said that India has been leading the world when it comes to technology-enabled governance; for example, Aadhaar, the unique ID scheme of India, which changed the way the nation passes on the welfare benefits especially to the needy and how it accesses the required data for KYC and for other purposes of validation by using safe and secure means.

He also said that some cutting-edge and latest technologies of the future, such as AI, robotics, big data and analytics, have already been offering huge opportunities in India.

The public sector organizations and huge multinational companies and corporates operating in sectors like fintech, genome research, pharma, and bio similars, are also considering India as an incubator of these highly-developed technologies for large scale deployment in international markets.

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Bahrain Announces the VAT Registration Launch in Three Phases
  • Bahrain, Newsletter

Bahrain Announces the VAT Registration Launch in Three Phases

The Bahrain Ministry of Finance or the MoF recently said that the VAT registration will be divided into three phases and launched separately, completely depending on the total value of the annual supplies of various businesses. The three registration phases are as follows:

 

Annual Supplies VAT Registration Deadline Effective Registration Date
Over and above BHD 5 million 20 Dec 2018 1 Jan 2019
Over and above BHD 500,000 but less than BHD 5 million 20 June 2019 1 July 2019
Over and above BHD 37,500 but less than BHD 500,000 20 Dec 2019 1 Jan 2020

This announcement has come after the MoF’s earlier announcement that the VAT registration’s first phase would be restricted to companies who have at least BHD 5 million annual sales.

Businesses which have an annual taxable turnover above the voluntary registration limit of BHD 18,750 could register for VAT but on a voluntary basis.

However, at a meeting conducted by the MoF with tax advisors regarding VAT implementation recently, the MoF has given its confirmation that the VAT regulations would be issued before the end of January. The MoF also provided additional details on the issues such as:

  • How frequently can be VAT returns filed;
  • How are the VAT groups divided;
  • What is the VAT treatment for the supply of buildings, food items, financial services, electricity, oil, gas and imports and also government entities;
  • What would be the content and prerequisites for tax invoices; and lastly
  • Who will be the tax representatives and agents.

Next steps

Companies should ideally consider the VAT treatment of their business transactions to establish if they are required to go for VAT registration or not. Though postponing the process of VAT registration for some firms would offer additional time to the businesses, the company should decide whether they should go for VAT registration so as to recover the VAT incurred on their procurement or not.

Need professional assistance?

If you are looking for professional VAT consultants in Bahrain who can advice you if you need to register for VAT or not and also need help for getting a VAT impact assessment done or conduct a second review to find out the VAT treatment of your business transactions, do get in touch with us.

Our team of experienced professionals at IMC will help you at every step in case you require any advice or assistance.

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A One stop Plan Launched to make the Business Flow Easy between the GCC Markets
  • Bahrain, Newsletter, Qatar, U.A.E

A One-stop Plan Launched to make the Business Flow Easybetween the GCC Markets

The officials say that there should be a single point between any two borders when it comes to customs and immigration.

Bahrain –It has been suggested that a reduction of border checkpoints will helps in easing the trade flow in the GCC markets. The GCC Customs Union draft that was made by the Federation of GCC Chambers had this as one of its 75 recommendations.

This draft is now being presented to the GCC Chambers with the help of workshops and the third session was recently at the BCCI or Bahrain Chamber of Commerce and Industry headquarters in Sanabis.

This draft paper is prepared after conducting a feasibility study done by Gulf Organisation for Industrial Consulting (GOIC). It is planned to be presented at the second Gulf Economic Forum, which is scheduled next month in Riyadh.

The secretary-general of the Federation of GCC Chambers, Abdulrahim Hassan Naqi said, The main objective is to help the goods to transit smoothly between the various markets in the GCC.A common market could be a solution, where there would be no checks done by the Customs.

The recommendation is to have a common point between the borders of two countries for immigration and also Customs. So if a vehicle has got a clearance in Bahrain, then there is no need for another check in UAE or Saudi Arabia.

This will reduce the time spent by the vehicles at the border, and also reduce the losses. The discussions with the Customs officials are underway and it is hoped that this plan would be implemented soon.

Mr. Naqi also said that the proposal is still under consideration across GCC. For this, the first workshop happened in Riyadh two weeks ago and the second happened in Bahrain.

The good news is that these after recommendations are implemented, it will improve the intra-GCC business and commerce flow and company formation in GCC will become more feasible and attractive.

The GOIC assistant secretary-general, Shmalan Hamoud Al Jeheidli said that having a Customs Union for GCC will help in reducing the challenges and limitations of moving goods and enhance the intra-GCC trade.

More Competition

This could also increase the competition, increase the production rates and the best utilization of resources at hand; and it could also reduce the consumer prices.

BCCI board member Abdulhakim Al Shemmari said that after 25 years of the announcement of GCC union of Customs, the private sector feels that the end result is way lesser than expected.In the last decade, many proposals have been sent, which aimed at reducing the number of barriers which lie between the nations when it comes to clearances, transportation and also for certification of products.

The Gulf Customs Union means to enhance the wealth and growth and in this, the private sector could replace the income from the oil industry.This union is aimed at growing the business and economic exchange between GCC countries. A GCC Union is surely going to have a big impact.

The one-stop measures at the border were initially announced in December, 2016 and could have taken 18 months for implementation. After it’s put in place, the vehicles will be stopped at only one post for border routine procedures, like passport control, clearance of car and customs. But someone going into Saudi Arabia would only have to go through the Saudi formalities; whereas if you are going to Bahrain, you will need only Bahraini clearance.

At present, it ends up in a chaos and congestion because the drivers have to comply with both Bahraini and Saudi formalities.

The Customs Affairs has shown an upward trend in e-payment transactions done for customs clearance. A 181 per cent rise was recorded in January, when a BD2,845,714 worth of transactions were registered.

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