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Opening a Branch of a Foreign Company has never been so Attractive in the Kingdom of Bahrain

Foreign Company Registration and Starting in Bahrain

Opening a Branch of a Foreign Company has never been so Attractive in the Kingdom of Bahrain

Last Updated on March 5, 2021

  

The Bahrain Economic Development Board (EDB), responsible for promoting Foreign Direct Investment (FDI) in Bahrain particularly focuses on attracting FDI in Manufacturing, Information Technology, Communication, Logistics, Tourism, Financial Services and Leisure sectors. The EDB reinforced its position and commitment as one of most liberal economic institutions by winning the United Nation’s Top Investment Promotion Agency award in the Middle East for its role in attracting large-scale foreign investments and Bahrain company formation.

The Government of Bahrain puts minimum restrictions on the right of ownership and establishment of a foreign company and allows foreign private companies to form and own business enterprises and engage in all forms of profitable ventures.

There only exists a small list of business activities with the Ministry of Industry, Commerce and Tourism (MoICT) restricted to Bahraini ownership such as Press and Publications, Workforce agencies, Clearance offices and Islamic pilgrimages.

The recent amendments announced to the Bahrain Commercial Companies Law ( BCCL) are aimed at furthering Bahrain’s business-friendly reforms to foreign investments and aligning Bahrain’s Economic Vision for 2030 in line with the diversification program of the economy. The amendments include speedy company registration process and stronger corporate governance. Despite global concerns about falling oil prices, FDI flow in Bahrain continues to grow due to reforms in the process of doing business in Bahrain.

Benefits of Establishing a Business in Bahrain

  • The strategic location of Bahrain at the centre of the Middle East Gulf countries allows easy access to every market in the Middle East and North Africa.
  • Among all GCC member nations, Bahrain offers the lowest cost for Industrial land and office rentals, the basic cost of establishing a business.
  • Despite oil and gas being the major contributor to its GDP, Bahrain is diversifying its economy and wooing foreign investors with several business incentives. Bahrain's economy has grown for many years and has become a key regional and global hub for business.
  • Accessing local authorities is much easier in Bahrain in comparison to other neighbouring countries, for support and dispute resolution in business. EDB, MoICT, BDB and Tamkeen also provide support to the foreign investors on how to start a small business in Bahrain.
  • Bahrain is one of the most liberal and flexible countries in the Arabian Gulf with a diverse and multicultural population. The country with approximately 50% expatriates has supportive multiple entry visa policies.
  • Though Arabic is the national language, English is widely spoken and used in business in Bahrain.
  • Bahrain offers multiple incentives to entrepreneurs including 100% foreign ownership, zero taxes, an attractive regulatory environment and an ecosystem designed for promoting startups and providing support in scaling up businesses.

Business Establishments in Bahrain

Bahrain essentially offers eight different options to the foreign investors willing to do business and commercial activities in Bahrain such as

  • With Limited Liability company
  • Partnership company
  • Holding company
  • Single Person company
  • Limited Partnership company
  • Joint Stock or Shareholding company-Open
  • Branch of a Foreign company
  • Joint-stock or shareholding company- Closed

A Branch of a Foreign company is one of the most sought after options to foreign investors as it offers a lot of advantages.

Branch of a Foreign Company in Bahrain

A foreign company, incorporated and registered outside Bahrain can be registered as an operational office, regional office or a representative office and by the rules and regulations of foreign company registration in Bahrain. A Bahraini national or a company from a similar industry should be engaged as a sponsor unless the branch or office is established as a distribution centre for regional goods and services.

Principal Features of Branch of a Foreign Company in Bahrain

The parent company shall be responsible for bearing all liabilities of its branch in Bahrain.

  • Business operations are only allowed when there is a local office in Bahrain.
  • Operational offices can only undertake business operations.
  • Representative and regional offices are allowed for marketing and promotional activities only.
  • No minimum share capital is needed.
  • Appointing a Branch Manager is mandatory.
  • A local sponsor is needed for an operational office except when the branches are licensed by Central Bank of Bahrain (CBB) and the Committee for Organizing Engineering Professional Practice (COEPP).
  • Banking, Insurance and investment activities are permitted.
  • The Parent company needs to issue a Bank Guarantee in favour of the Ministry of Finance and National Economy.

Registration of Branch of a Foreign Company in Bahrain

The registration process for a foreign company branch is usually completed in 2 to 4 week time once all documents are in order. The registration process begins with an application for commercial registration and choosing a unique company name.

The process steps involved in registering a Foreign company branch are

  • Filling out a registration application form with all necessary details
  • Documenting Memorandum of Understanding (MOA) and Articles of Association (AOA) and receiving preliminary approval from the Ministry of Commerce.
  • Obtaining local Municipal approval for securing an office space
  • Notarizing the MOA and other documents, as appropriate and submitting online to the MoICT
  • Opening a national bank account and receiving the capital deposit certificate
  • Depositing a guarantee to the bank in the name of the branch, the agent or an official representative and the order of the Ministry of commerce and industry
  • Receiving the Certificate of Registration (CR) from the ministry
  • Publicizing the incorporation in the Official Gazette
  • Registering for Social Insurance for the hiring of employees

Documentation Requirements for Registering a Foreign Company Branch in Bahrain

  • Filled application form of company registration
  • Pre-approved documents from external entities
  • Sponsorship agreement for operational branches
  • Copy of CR
  • Copy of MOA and AOA
  • Resolution of Board of Directors
  • Guarantee certificate from the Parent company accepting full responsibility of the Bahrain branch
  • Authenticated Power of Attorney whenever necessary, e.g. Outsourced Consultancy Services

IMC helps entrepreneurs and business organizations create value and is committed to delivering services that exceed customers expectations.

We, at IMC, are a group of high calibre professionals acquainted with the Bahraini business and Tax laws including their culture and preferences and can render you every help every time in your quest for a foreign company branch in Bahrain.


  

1 Comment

  • December 13, 2020

    mariana

    It’s awesome in favor of me to have a site, which is helpful designed
    for my know-how. thanks admin

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