Setting Up A Business

Commercial Registration FAQs

Can I own a business in Bahrain?

100% foreign ownership of business is allowed. Sector-specific and/or company type restrictions may apply.

Can I own a land in Bahrain?

Bahraini and GCC nationals are permitted to own land in all areas of Bahrain.

Non-nationals and foreign companies are permitted to own property and real estate in new developed areas, including:

  • The Greater Manama Area, such as Ahmad Al-Fateh District, Hoora Area, Bu Ghazal Area, Northern District of Manama including Diplomatic Area (areas of high rise residential and commercial structure with elevation of 10 storeys or above).
  • Seef District (with elevation of 10, 5 and 3 storeys).
  • New tourism developments such as Durrat Al Bahrain, Amwaj Islands and Al-Areen Desert Resort.
  • Areas which fall within the sphere of the Bahrain Financial Harbour (BFH), the Bandar Al Seef Area and Reef Island.

Available Commercial Legal Structures for Companies in Bahrain:

1. Bahraini Shareholding Company (B.S.C.) - Public

A Public Shareholding Company consists of a number of promoters (not less than seven) who subscribe therein by way of negotiable shares. Partners shall be liable for the company’s debts and obligations only to the extent of the value of their shares.

1.1 Main features of a Bahraini Shareholding Company (B.S.C.) - Public:

  • Limited liability
  • Commercial, banking, insurance and investment activities are allowed
  • Local office presence is required
  • Minimum share capital required is BD 1,000,000
  • Minimum number of founding shareholders required is 7
  • Minimum number of directors required is 5
  • Annual submission of audited financial statements is required

1.2 Foreign ownership of a Bahraini Shareholding Company (B.S.C.) - Public:

  • GCC nationals and foreign investors are permitted to own company shares.
  • In accordance with the Bahrain-US Free Trade Agreement (FTA), US investors are accorded Most Favored Nation (MFN) treatment similar to GCC citizens, effective as of 1 January 2005.

2. Bahraini Shareholding Company (B.S.C.) - Closed

A Closed Shareholding Company consists of a number of persons - not less than two - who subscribe therein by way of negotiable shares. Such shares may not be offered to the general public for subscription.
 
2.1 Main features of a Bahraini Shareholding Company (B.S.C.) - Closed:
  • Limited liability
  • Banking, insurance and investment activities are allowed
  • Local operations are allowed
  • Local office presence is required
  • Minimum share capital required is BD 250,000 (a minimum of 50% of the capital must be paid initially at the time of incorporation and the remaining to be paid with 3 years)
  • The nominal value of each share shall not be less than BD 0.100 and shall not exceed BD 100
  • Minimum number of shareholders required is 2
  • Minimum number of directors required is 3
  • Annual submission of audited financial statements is required
2.2 Foreign ownership of a Bahraini Shareholding Company(B.S.C.) - Closed:
  • GCC nationals and foreign investors are permitted to own company shares.
  • In accordance with the Bahrain-US Free Trade Agreement (FTA), US investors are accorded Most Favored Nation (MFN) treatment similar to GCC citizens, effective as of 1 January 2005.

3. With Limited Liability Company (W.L.L.)

A limited liability Company is a company of which partners are responsible for the company debts and liabilities only to the extent of their shareholding in the capital. If the number of partners falls below two, the company must introduce new shareholders within a period of 30 days, or by force of the law, be converted to a single person company, or proceed to dissolution. A limited Liability Company cannot issue public shares or negotiable debentures.

3.1 Main features of a With Limited Liability Company (W.L.L.):

  • Limited liability - there are two categories of partners: limited partners or shareholders and partners with unlimited liability (joint partners)
  • Banking, insurance and investment activities are not allowed
  • Local operations are allowed
  • Local office presence is required
  • The minimum number of founding partners required is 2 and the maximum is 50
  • The minimum number of directors required is 2
  • An external auditor is required
  • 100% foreign ownership is allowed (depending on business activities)

4. Partnership Company

A partnership Company is a company without limited liability. Formed between two persons or more under a specific name, and in which partners assume joint responsibility, to the extent of all their entire personal assets, for the partnership’s debts and liabilities.

4.1 Main features of a Partnership Company:

  • Unlimited liability
  • Banking, insurance and investment activities are not allowed
  • Business operations are allowed in Bahrain
  • Local office presence is required
  • Minimum share capital is not applicable
  • The minimum number of partners required is 2
  • The minimum number of directors required is 2
  • 100% foreign ownership is allowed

5. Simple Commandite

A Simple Commandite is a limited partnership company established by one or more partners, who are jointly liable to the extent of their entire personal wealth for the company’s obligations, and other partner or partners who have invested capital in the company but are not involved in management, referred to as “the limited partners”. No limited partner is held responsible for the company’s obligations save to the extent of his share in the capital.
 

5.1 Main features of a Simple Commandite:

  • Limited liability – there are two categories of partners: limited partners or shareholders and partners with unlimited liability (joint partners)
  • Banking, insurance and investment activities are not allowed
  • Business operations are allowed in Bahrain
  • Local office presence is required
  • Minimum share capital is not applicable
  • The minimum number of partners required is 2
  • Share of Bahraini partners' capital shall not be less than 51%
  • Minimum number of directors required is 2

6. Commandite by Shares

A Commandite Partnership by Shares is a company established between two categories of partners, one of which is that of joint partners who are jointly responsible, to the extent of their entire personal wealth for the company’s obligations, and the other is that of limited partners (shareholders) who are not liable for the company’s obligations except to the extent of their equity (shares) in the capital.

6.1 Main features of a Commandite by Shares:

  • Limited liability – there are two categories of partners: limited partners or shareholders and partners with unlimited liability (joint partners)
  • Banking, insurance and investment activities are not allowed
  • Local operations are allowed
  • Local office presence is required
  • Minimum share capital required is BD 20,000
  • The minimum number of founding partners required is 4
  • Minimum number of directors required is 2
  • An external auditor is required
  • 100% foreign ownership is allowed (depending on activities)

7. Single Person Company (S.P.C.)

A Single Person Company is a company the capital of which is fully owned by a single natural or corporate person. The proprietor of the capital of the company shall be liable only to the extent of the capital allocated for the company.

7.1 Main features of a Single Person Company (S.P.C.):

  • Limited liability
  • Banking, insurance and investment activities are not allowed
  • Local operations are allowed
  • Local office presence is required
  • The minimum number of partners required is 1
  • The number of directors required is 1
  • An external auditor is required
  • 100% foreign ownership is allowed (depending on activities)
  • Annual submission of audited financial statement is required

8. Foreign Company Branch:

A branch of a foreign company which is incorporated and registered outside the Kingdom of Bahrain may be registered as an operational office, a representative office, or a regional office.

8.1 Main features of a Foreign Company Branch:

  • The parent company shall bear all liability of its branch in Bahrain
  • Business operations are allowed only for an operational offices
  • Representative and regional offices are only permitted to undertake marketing and promotion
  • Banking, insurance and investment activities are allowed (operational offices only)
  • Local office presence is required
  • Minimum share capital is not applicable
  • Branch manager is required
  • A local sponsor is required only for an operational office, with the exception of branches licensed by Central Bank of Bahrain (CBB) or the Committee For Organizing Engineering Professional Practice (COEPP)

9. Holding Company

The purpose of a holding company is to own shares in Bahraini or foreign joint stock companies and to own shares or stakes in Bahraini or foreign limited liability companies, or to participate in the establishment of such companies, and to manage them and provide loans thereto and to guarantee them before third parties. A holding company may take the form of a Closed or Public Shareholding Company, a Limited Liability Company, or a Single Person Company. Commercial Company Registration Requirements - 12 of 12 Characteristics of a holding company will depend on its legal form. A Holding Company must own more than 50% of the shares of its subsidiaries.

Is 100% foreign ownership allowed for an individual establishment?

Individual Establishment

Only Bahraini citizens and citizens of the Gulf Cooperation Council (GCC) countries (must be resident in Bahrain) may register an Individual Establishment in the Kingdom of Bahrain. An Individual Establishment is a non-incorporated entity and is owned by one individual only. The owner is liable for all debts and liabilities of the business to the extent of his/her personal assets.

Main features of an Individual Establishment:

  • Unlimited liability
  • Owner must be Bahraini or GCC national no less than 18 years of age

How can I get the Commercial Registration for my business?

After selecting a business activity and the type of legal structure for your company, the necessary approvals from the concerned sector regulators are required. When all requirements and conditions are submitted and met respectively, a Commercial Registration (CR) is issued by the Ministry of Industry and Commerce. Commercial Registrations must be renewed on an annual basis.

 

For more info, visit http://www.business.gov.bh/ or get assistance from the Bahrain Economic Development Board (EDB)