Open a Business in Bahrain as a Foreigner

If you want to open a business in Bahrain as a foreigner, many of our articles provide information about the requirements for operating in various sectors. This is why, in this one, our local specialists will explain what it entails to keep an enterprise running in this country. Also, you will find out what differentiates the Bahraini market from others. We also remain at your disposal with tailored registration solutions if you decide to set up a company in Bahrain.

Quick Facts
Fastest way to start a business in Bahrain as a foreigner	Through a limited liability company
Time frame to register a business in Bahrain	Around 2 weeks
Composition of the business registration costs	– document drafting, – Articles of Association notarization, – bank account opening fees, – registration fee
Maintenance costs	– utilities, – office rental/virtual office service, – accounting fees, – licensing fees
Special costs/fees to consider (if any)	Licensing renewal costs
Bureaucracy	Bahrain has low bureaucracy levels.
Availability of online business administration services (YES/NO)	Yes
Corporate tax rate	Only companies in the oil and gas sector are subject to a 46% tax.
Particularities of the workforce	Young, bilingual (most employees speak Arabic and English), foreign workers availability
Social contributions to pay as an employer	17% of an employee’s gross salary
Best performing industries	– engineering, – wood and furniture, – petrochemicals, – plastics, – pharma, – textiles
Possibility to register a business remotely in Bahrain (YES/NO)	Yes, with the help of our Bahraini company formation agents.
Personal income tax	There is no personal income tax in Bahrain.
Restrictions on foreign investments (if any)	Certain sectors, such as the financial one, are subject to 49% foreign ownership, while others imply authority screening.
Why set up a business in Bahrain as a foreigner?	– quick registration process, – access to various support schemes offered by the Government, – no corporate taxes for most activities

The main maintenance costs for a Bahraini business

The costs of maintaining a business in Bahrain are quite important, especially if you are a foreign investor, so here is what you should know:

• the costs associated with using the premises for doing business are some of the most important, and from this point of view, you can decide between a virtual office and a rental;
• the utilities costs must also be factored in when setting up a business in Bahrain;
• the manpower costs will also matter when it comes to keep a business running.

In numbers, these may imply:

• a virtual office starts at nearly BHD 50 (approx. USD 150) and can go up to BHD 900 (around USD 2,000) per month, depending on the facilities contracted;
• by comparison, office rental starts at nearly BHD 5 (approx. USD 15) to BHD 20 (approx. 50) per sq. meter, depending on the size and location of the space;
• utilities costs depend on the type of business you run, and can surpass BHD 1,000 per month;
• in terms of workforce, as an employer, you need to pay 16% of the gross salary as a social security contribution per employee, however, by 2028, the government plans to increase it to 20%.

We also have an infographic on this subject below:

These are the usual business maintenance costs; however, there are also specific ones, such as the business license renewal ones, for enterprises operating in certain industries. Such fees must be paid annually. Our company formation specialists in Bahrain can offer updated information on this matter.

How hard is it to start a business in Bahrain as a foreigner?

In the past few years, the Bahraini government has made important changes in its administrative system to attract foreign investments. Among them, we present the following:

• availability of full foreign ownership rights in most industries;
• simplified business registration and licensing procedures that can be completed online, which has led to a significant decrease in bureaucracy;
• reduced operational costs compared to neighboring countries;
• simple tax and VAT compliance procedures;
• access to incentives for foreign investors;
• access to skilled local and foreign workforce.

The labor force is one of the main strengths of starting a business in Bahrain, as it is one of the youngest in the Gulf region. Moreover, most employees have good computer literacy, and 90% of them are bilingual, English being widely spoken in companies here.

Here is also a video on this topic:

Support for foreign investors granted by the Bahraini government

Compared to several years ago, when the Bahraini economy relied on the extraction and production of oil, the Government has made an important shift to attract foreign investors. Now, through the Ministry of Commerce and Industry, the central authorities provide for incentives like:

• lower rental rates for land plots managed by the Ministry;
• support schemes for individual and corporate investors through the Labor Fund;
• access to goods from states such as: Singapore, Switzerland, Norway, and neighbouring Arab countries without duty taxes;
• customs tax exemptions for the import of raw materials, equipment, machinery, and spare parts for industrial production.

If you decide to set up a business in Bahrain as a foreigner and need support, we are at your service with various services. Do not hesitate to contact us for an offer!