Manama is the capital city in Bahrain and the largest urban center in the nation. It has a long history as being a hub for international trade and today is it a testimony of the country’s rich cultural heritage.
The city has a diverse population and it is the economic center of the country, with many companies activating in banking, finance or tourism being based here. A good road network and the Bahrain International Airport facilitate access to the city.
Our agents who specialize in company formation services in Bahrain offer complete solutions for investors who wish to set up their company in Manama.
What are the types of companies that can be established in Manama?
The list below includes the type of business entities that can be incorporated by those interested in forming a company in Manama:
- Public shareholding company: the BSC is opened by at least two founders who have limited liability; the shares have nominal value; the share capital is at least 1 million BD.
- Closed shareholding company: the closed BSC can be incorporated by at least two founders, also with limited liability and lower share capital of 250,000 BD.
- Limited liability company: it has a maximum number of 50 shareholders and there is no requirement for a minimum share capital; it must have an auditor.
- Joint liability company: formed by two or more individuals who are jointly liable for the debts and obligations of the business.
- Limited partnership company: one or more founders who are jointly liable and one or more partners who have limited liability but cannot manage the business.
- Company limited by shares: formed by two types of partners, the ones with joint liability and the limited liability ones; required a share capital of 20,000 BD.
- SPC: the single person company in which the founder is fully liable for the debts of the business; cannot engage in insurance, banking, investment fund business, etc.
- Branch: the extension of a foreign company in Bahrain, it performs the same activities and has the same business name as the foreign legal entity.
Apart from the branch, foreign companies in Manama can also establish their presence through a representative office. This office cannot engage in commercial activities with Bahrain clients and can only be used for marketing or research purposes.
Investors can reach out to our agents who specialize in company registration in Bahrain for complete information about each of these types of business entities as well as personalized assistance for incorporation.
What is the main regulatory framework for companies in Manama?
Companies in Manama and Bahrain, in general, are regulated as per the Commercial Companies Law 2001. This is the main legal resource for all matters concerning company formation in Bahrain as well as management.
The Ministry of Industry, Commerce and Tourism is the one that regulates the conditions for doing business, along with the Central Bank of Bahrain, another important regulatory authority.
Our lawyers in Bahrain can offer more information on the Company Act.
How are companies taxed in Manama?
There is no corporate income tax for companies in Bahrain other than for those engaged in business activities related to oil, gas or petroleum. These legal entities are subject to a corporate income tax of 46%. All other companies, like those in tourism or financial services, are not subject to tax on their profits. Other taxes include stamp duty and a levy on the gross turnover for first-grade restaurants and hotels. A 10% municipality tax applies for the rental of commercial and residential property by expatriates.
The taxation regime in Bahrain does not impose any withholding taxes, there is no payroll tax, no real property tax, and no capital duty. The employer is required to make a social insurance contribution of 12% for Bahraini nationals. For foreign employees, this contribution is 3%, meant to cover employment injuries. The VAT applies to the supply of goods and services.
Company registration in Bahrain increased from 2017 to 2018, as highlighted by the following report issued by the Ministry of Industry, Commerce, and Tourism:
- – the total number of investors who have requested aid from the Bahrain Investor Center was 22,592.
- – in 2018, 50,632 individual establishments were opened, compared to 42,835 in 2017.
- – the number of companies in 2018 was 31,965 compared to 24,883 in 2017.
- – in 2018, there were 25,667 applications for the renewal of the commercial registration, compared to 23,984 in 2017.
Bahrain’s geographical location in the Persian Gulf makes it one of the top commercial centers in the region. Investors can start a business in Manama with the help of our agents who specialize in company registration in Bahrain. Contact us for more information about our services.