Opening a financial company in Bahrain is linked to obtaining a special business license, in accordance with the activities to be undertaken. The permit is issued by the Central Bank and the most important aspect to consider is that the financial licenses issued are divided into two categories: conventional and specialized ones.
Below, our company formation specialists explain how to obtain a financial license in Bahrain. Our local agents can help you prepare and file the documents for the necessary permits to operate in this sector.
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Activities for which financial licenses are issued in Bahrain
As mentioned earlier, Bahraini financial licenses are divided into conventional and specialized ones. The first category is issued to:
- local and foreign retail banks;
- local and foreign wholesale banks;
- traditional/Islamic banks.
Apart from banking, there are also other activities that can be undertaken in Bahrain for which specialized financial licenses are available. They cover the following:
- credit institutions;
- exchange offices;
- trading companies;
- investment brokers and dealers;
- crypto companies.
Insurance and reinsurance activities are also covered by specific financial licenses in Bahrain.
All these activities are covered by the same Central Bank of Bahrain and Financial Institutions Law, however, by separate modules, as established by the Bank.
Requirements to obtain a financial license in Bahrain
All types of companies seeking to apply for a financial license must prepare a set of documents and file it with the Central Bank, namely:
- a 3-year business plan indicating their activities;
- details of the management or controllers of the company;
- information about the positions to be occupied by the controllers in the company.
Depending on the types of activities to be completed, such companies must also adhere to minimum capital requirements as imposed by the law. Specifically:
- conventional wholesale banks must ensure a minimum capital of BD 7 million (approx. USD 18.5 million) or its equivalent in other currencies;
- the same amount of BD 7 million is required when opening a credit institution;
- conventional banks must ensure a minimum capital of BD 20 million (approx. USD 53 million).
How to open a financial company in Bahrain
If you want to incorporate a company in Bahrain in the financial sector, you must first choose a legal entity under which it will be registered. The private and public limited liability companies are the most employed, and the decision between one or the other depends on the sub-sector you are interested in. For banking activities, for example, the public enterprise is more suitable.
It is important to note that you can also apply for a financial license in Bahrain as a foreigner.
Foreign financial activities in Bahrain
Foreign banks can set up branches, representative, or operational offices in Bahrain. For this purpose, they must apply for a financial license with the Bahraini National Bank.
Other financial companies may also offer their services to local clients. However, if they need a local partner, they must have operated in their home countries for at least 3 years prior to establishing their offices here. Our lawyers in Bahrain are at the service of foreign businesspersons and companies seeking to apply for financial licenses in Bahrain.
You can also rely on our lawyers as a natural person. For example, if you decide to move to this country, you will need to comply with the immigration rules in Bahrain and apply for a Bahraini residence permit.
For support in applying for a financial license in Bahrain, please contact our company formation agents in Bahrain.