Setting up a Business in Bahrain
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Setting up a Business in Bahrain A step-by-step guide H.R.H. Prince H.M. King H.R.H. Prince Khalifa bin Salman Al Khalifa Hamad bin Isa Al Khalifa Salman bin Hamad Al Khalifa Prime Minister King of Bahrain Crown Prince Deputy Supreme Commander King Fahd Causeway Minister’s Foreword Dr. Hassan Fakhro Minister of Industry and Commerce The Kingdom of Bahrain aspires in its Economic Vision 2030 to transform itself from an economy built on oil wealth, to a productive, globally competitive economy, shaped by the government and driven by a pioneering private sector, embracing the principles of sustainability, competitiveness and fairness, with a stable political system, secure economic environment, clear investment climate, and an aspiring cosmopolitan society, to consolidate Bahrain’s status as a main economic gateway to the GCC and MENA Regions. The Kingdom of Bahrain is among the very few procedure. All ministries and other entities involved countries in the region known for its economic in the incorporation process have come together freedom - freedom of movement of capital, under one roof at the BIC ‘one-stop shop’, to freedom of full foreign ownership of corporate enable foreign investors to complete their licensing and real assets, freedom of residence and work, and incorporation procedures, obtain economic being the only country in the GCC to abolish and legal advice and services, with ease and the sponsorship law for foreign companies and transparency, within a time period as short as one manpower, freedom of worship for all religions, and day. social freedom guaranteeing citizens and residents equality and a good standard of living. Bahrain also enforces absolute transparency in its incorporation procedures, and has published In addition to comprehensive government services, a large number of reports, studies and guides state-of-the-art infrastructure, attractive investment on investing and doing business in the Kingdom. climate, free and fair competition, and the legal This Guide contains a detailed description of all and supervisory framework which guarantees processes and steps required for quick and easy protection, equality and social justice, Bahrain incorporation of companies in Bahrain. enjoys a well educated, highly efficient and diversely experienced local Bahraini manpower. In the name of the Kingdom of Bahrain, I would All of these factors make Bahrain attractive to like to extend a warm welcome to our investors, value-added industries and services, ensure high wishing them success. I would also like to productivity, and enhance competitiveness in the acknowledge the hard work of the staff of the global market. Ministry of Industry and Commerce, Bahrain Investors’ Centre, and Economic Development Bahrain Investors’ Centre (BIC) was established Board who have expended valuable efforts in within the framework of the government’s reform putting this comprehensive guide together. and promotion policy, in order to welcome foreign companies and investors, facilitate their relocation to Bahrain, remove red tape, and provide the most cost effective and efficient incorporation Foreword Dr. Hassan Fakhro Minister of Industry and Commerce 3 Map of Bahrain Investing in Bahrain Business Environment p 7 An overview of some of the key characteristics of Bahrain’s business environment and the A resources available to commercial and industrial businesses operating in Bahrain. Bahrain Investors’ Centre p 17 The “One-Stop-Shop” Bahrain Investors’ Centre (BIC) was established to facilitate the setting up of business in Bahrain through a seamless process. Commercial Registration p 25 Commercial Registration (CR), issued by the Ministry of Industry & Commerce, is required to operate commercial business in Bahrain. Additional sector-specific licenses may also be required. p 27 C1 Selection of Business Activity, Legal Structure and Company Name p 35 C2 Completing the Application for Commercial Registration C Contents p 42 C3 Activity Licensing and Relevant Approvals p 104 C4 Notarisation of Company Memorandum of Association Issuance of Commercial Registration, Publication in the Official Gazette and C5 p 106 BCCI Registration of Relevant Activities Post Registration Services p 113 This section describes additional services required to commence business operations in D Bahrain, such as hiring of foreign workers, applying for residency, and amendments to existing commercial registrations. Monitoring and Supervision p 127 Post-operational supervision to ensure businesses in Bahrain operate in accordance E with applicable laws and regulations, which are designed to protect the interests of the businesses and customers alike. Investing in Bahrain Appendices and FAQs p 133 Frequently Asked Questions (FAQs) and an index of contact information of all F relevant public and private entities. 5 A “Bahrain is a primary option for investment. Its progressive outlook and economic freedom have earned it consistent high rankings by the Heritage Foundation, Fraser Institute and the Wall Street Journal” 666 6 A SECTION A The Business Environment of Bahrain Bahrain prides itself on being a premier investment location in the Middle East Region. Bahrain’s internationally acclaimed strong financial regulations, economic and political stability, strategic location and strong legal framework have transformed it into a high standard investment and commerce destination. (This Section provides an overview of some of the most important characteristics of Bahrain’s business environment and the resources available for businesses operating in Bahrain). Additional key features of the business legal Currency framework in Bahrain include: The Unit of Currency is the Bahraini Dinar (BD), • No restrictions on the repatriation or remittance equal to US $ 2.6596. of profits or capital. • No restrictions on the import or export of local Business Hours and foreign currencies. • No tax on income, capital gains, sales, estate, - Currency Regulation of the Financial Sector • Local Time: GMT + 3 hours interest, dividends or royalties. • Government Offices: 07:00-14:00 Sunday through Thursday. Closed Fridays and • Gulf Co-operation Council (GCC) Arbitration Saturdays. Centre, which settles commercial disputes involving GCC citizens on the condition that they A • Private Sector: Generally 08:00-13:00 and involve a minimum of BD 15,000. 15:00-1800 Sunday through Thursday. • The Kingdom of Bahrain permits 100% foreign • Banks: Generally 8:30 - 13:00 and 15:00-18:00 ownership of businesses in the most types of Sunday through Thursday. business activities. Legal Framework Regulation of the Financial Sector Bahrain The commercial laws and legal system are under The strength of Bahrain’s financial sector rests constant review to ensure that they are consistent upon the regulatory regime imposed by the Central with international standards. Companies operating Bank of Bahrain (CBB). The CBB is responsible The Business in Bahrain are expected to follow the international for the licensing, supervision and regulation of the Environment of Environment accounting standards and are encouraged to financial sector in accordance with international pursue good corporate governance. Bahrain has standards. a zero-tolerance policy for money laundering and enforces best-practice international standards The CBB has introduced International Accounting of intellectual property, labour and environment Standards for locally incorporated banks and has protection. also increased the transparency of the financial 77 A position of locally incorporated and publicly-quoted conditions are required depending on the rental banks by requiring them to publish their financial contract. statements on a quarterly basis. Commercial Rates* The CBB’s Compliance Unit is committed to ensuring that the financial sector acts in Office space (per square metre per month): compliance with CBB regulations on anti-money Diplomatic Area BD 6 - 10 laundering and countering the financing of terrorism (‘AML/CFT’). The Compliance Unit also acts to Seef Area BD 8 - 13 combat the risk of financial crime more generally Central Manama BD 6 - 9 within the financial sector - such as fraud attempts Bahrain Financial Harbour BD 9 - 13 on CBB licensees and their customers. Al Moayyed Tower BD 10 - 12 Business Ownership Retail space (per square metre per month): Average BD 16 100% foreign ownership of business is allowed. Sector-specific and/or company type restrictions Seef Mall BD 20 may apply. Please refer to Section C1 for details. Residential Rates* Land Ownership for Foreigners Monthly rent for one-bedroom house/apartment: Bahraini and GCC nationals are permitted to own Juffair BD 550 - 750 land in all areas of Bahrain. Central Manama BD 180 - 300 Foreign Land Ownership Monthly rent for two-bedroom house/apartment: Juffair BD 750 - 1,200 Non-nationals and foreign companies are permitted Central Manama BD 350 - 500 to own property and real estate in newly developed areas only, including: Adliya BD 650 - 1,200 Business Ownership - Industrial Land Seef Area BD 800 - 1,200 • Manama Area, such as Ahmad Al-Fateh District, Hoora Area, Bu Ghazal Area, Northern District Monthly rent for villas in high-end areas: of Manama including Diplomatic Area (areas of Busaytin BD 1,500 - 1,800 high-rise residential and commercial structure Saar BD 2,000 - 4,300 A with elevation of 10 storeys or higher). Municipality Fee 10% of rent (all types) • Seef District (elevations of 10, 5 and 3 storeys). • Newly developed tourism areas such as Durrat Al Bahrain,