A Closed Shareholding Company, commonly known as a Closed Joint Stock Company (BSC Closed) usually consists of a number of persons but not less than 2 as partners or investors who subscribe therein by way of negotiable shares. Such shares can be sold or transferred but cannot be sold to the general public for subscription. The shareholders or investors are responsible for their respective liabilities for the company’s debts and obligations are limited to the extent of the value of their respective shareholding.
The minimum share capital required for starting closed entity is a shared capital of BHD 250,000 while a minimum of 50% percent of the capital must be produced initially and remaining within a stipulated time period of three years.
The GCC Nationals, as well as foreign investors, are permitted to own company shares. Moreover, US nationals are treated similar to the GCC citizens and there is no requirement of a local sponsor but the local office presence is mandatory. The citizens of GCC are permitted to own 100 percent ownership of the business entity in Bahrain, the foreign investors & entrepreneurs may acquire up to 100 percent of ownership depending on the type of business activity.
Requirements of Bahrain Shareholding Company Closed Entity
- Limited Liability Company structure
- Local office presence required
- Minimum of two investors/partners/founding shareholders are necessary
- Minimum of three directors are required
- Minimum share capital requirement of BHD 250,000
- A minimum of 50 percent of the capital must be paid initially at the time of incorporation and the remaining capital must be formed within three years
- Shares can be transferred or sold to the sole owner but cannot be sold for general public subscription
- Annual submission of the audited financial statements to MOICT is compulsory
Bahrain Shareholding Company is ideal for
- Manufacturing
- Research & Development
- Banking services
- Insurance business
- Investment activities
- Local operations are permitted
Advantages of Setting up a Closed Bahrain Shareholding Company
- 100 percent foreign ownership for most of the businesses
- No requirement for Bahraini partner or shareholder
- Bahraini nationals, nationals GCC states, and foreign investors are allowed to invest in the Bahrain joint stock company
- Favored foreign investment destination for US investors as the US citizens are treated similarly to the GCC citizens in the Kingdom of Bahrain in accordance with the Bahrain-US Free Trade Agreement (FTA)
- Ease of ownership as the Bahrain Shareholding company structure allows for corporate directorship with no local required
- Bahrain currently levies no corporate tax and repatriation of capital is not restricted as the Kingdom has double taxation agreements with several countries
- Zero percent corporate tax for a Bahrain Limited Liability Company
- No duties imposed on the goods imported and exported from the free zone (this requires a Bahraini shareholder for trading and commercial activities)
Documents required for Setting up a Bahrain Shareholding Company
General Documents
- Company registration application form
- External entities pre-approval (depending on the business activity)
- Draft Memorandum & Articles of Association
- Capital deposit certificate (after preliminary approval)
- Feasibility Study
- Financial auditor report of any kind of capital investment
Documents required if Partners are Individuals
- Copy of valid passport and visa pages if the partner or investor is a non-Bahraini citizen
- CPR copy for Bahraini partners and expatriates
- Original, stamped and signed no objection letter from the current employer for Bahrainis employed in the private sector (signed by the owner of the Establishment or from the company’s authorized signatory
- An original bank reference and CV for non-GCC nationals
- Copy of the original educational qualifications and experience depending upon the business or commercial activity
Documents required if Partners are Company
- Copy of the commercial registration certificate obtained from the government or regulatory authority
- Copy of Memorandum or Article of association and its amendments for foreign companies
- Latest audited financial report of the company or business entity
- Board of directors or general assembly resolution to be a shareholder in the company
- All the documents from a concerning foreign company or organization are required to be authorized by the Ministry of Foreign Affairs and the Embassy of Kingdom of Bahrain at the country of origin of the company
Who We Are
We at Commitbiz assist businessmen, entrepreneurs, and leaders to transform their business dream by assisting them in their business incorporation, acquiring permits & authorizations from government authorities and help you start your business in the Kingdom of Bahrain. If you want to know the business opportunities in the Kingdom of Bahrain, feel free to Contact Us. As a team of experienced professionals with knowledge on setting up business operations in Bahrain, we’d be glad to guide you in your endeavors.