Doing Business in Bahrain

Tax Free Environment

Bahrain has a highly favorable tax environment, with no taxes on personal or corporate income, and no withholding or VAT.

Duty-Free Imports

Raw materials, imported semi-finished commodities, imports required for development projects, machinery for manufacturing, and goods imported for re-export are all exempt from duties in Bahrain.

100% Foreign Ownership Of Companies

International investors and companies are guaranteed 100% ownership of their interests in sectors including:

100% Ownership of Land

Bahrain has taken the pioneering move to allow foreign investors 100% ownership of land in predetermined areas. Investors setting up their operations in Bahrain may choose to lease government land through the Ministry of Finance and National Economy, or to purchase land in one of several designated sites open to foreign ownership. International investors may also own residential property in a number of tourist developments.

100% Repatriation of Capital

Bahrain does not restrict capital repatriation, guaranteeing full financial transferability of profits and dividends.

‘Fast-track’ Registration

To simplify the bureaucratic process of setting up a new company, the Bahraini government offers a ‘fast track’ commercial registration procedure for qualifying companies.

Easy Access To Visas

Except passport holders of the GCC States (Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), visas are required for all visitors to Bahrain—regardless of purpose. Visitors holding valid resident permits from Saudi Arabia can receive a free 2-week visa. While required, visas are available and usually not difficult to obtain.

Foreign nationals may enter Bahrain with any of the following:

• Tourist visa (for individuals or groups)
• 72-hour visa
• 7-day visa
• Visit visa
• Business visa
• Family visa
• Dependent visa
• Work visa
• A local sponsor must sign extension applications.

Skilled, Cost-Effective Labor

Labor costs are one-third those of industrial countries. Highly trained, bilingual, non-transient and versatile, Bahraini citizens represent a highly competitive workforce.

Physical Infrastructure

Bahrain also has well-developed utilities and road networks. There are three major desalination plants and all tap water is desalinated. The whole country has direct access to electricity. The road network, under constant upgrade, connects all of the areas on the main island.

Legal System and Dispute Resolution

Bahrain has a well-established legal framework in place to protect international investors.

• Limited liability sole proprietorship
• Simplified procedures that allow companies to change their legal form
• Articles relating to establishment and regulation of holding companies
• Establishment of joint stock companies
• The increase of capital requirements for Limited Liability and Joint Stock companies.
• The Intellectual Property laws cover trademarks, patents, designs and copyrights.

The GCC Commercial Arbitration Center, which was established in 1995, provides the private sectors in the GCC countries with a quick mechanism by which commercial disputes can be resolved. In addition, the Bahrain Chamber of Commerce and Industry (BCCI) can assist in the settlement of trade disputes in the private sector.

Numerous Investment Alternatives

Investors have a range of investment vehicles by which they can do business in Bahrain, including:

• Limited Liability Company (WLL)
• Branch Office
• Regional Office
• Public Joint Stock Company
• Closed Joint Stock Company
• Sole Proprietorship
• Holding Company
• Ample and Available Financing

In addition to credit from banks and financial institutions in Bahrain, two additional financing options are available: the Bahrain Stock Exchange, which offers equity financing, and the Bahrain Development Bank (BDB). BDB is Bahrain’s primary financial development institution and was established in 1992 to promote and foster investment in industrial, commercial and business service sectors. The BDB provides financing arrangements to small and medium size projects, including:

• Short and long-term composite loans;
• Venture capital in the form of equity participation;
• Arrangement of equipment leases;
• Financing of working capital for raw materials;
• Export financing for goods manufactured in Bahrain.
• The BDB maintains a maximum loan exposure of BD 500,000 per project.

The BDB is further able to offer:

• Attractive interest rates
• Flexible grace periods (of up to 3 years)
• Flexible payment terms
• Highly competitive fee arrangements.

The BDB provides services to investors of any nationality, but demands that they have good credit. Eligible projects must be registered and licensed in accordance with Bahraini law. Economic viability needs to be supported by an independent, recognized consulting house.

The Six Sectors

Foreign investors choosing Bahrain benefit from its close proximity to other GCC countries. They see Bahrain as a friendly, modern gateway to the regional market. The presence of high net-worth individuals, as well, provides a relatively large pool of capital and a sophisticated customer base.

Today, Bahrain has identified six economic clusters as the most promising industries for foreign investment and the government has provided incentives to the international community for investing in Bahrain.

The six sectors are:

• Information and Communications Technology
• Tourism
• Healthcare Services
• Education and Training Services
• Business Services
• Downstream Industries