Bahrain Shareholding Company (B.S.C Closed)

A Closed Shareholding Company in Bahrain, commonly known as a Closed Joint Stock Company (BSC Closed), usually consists of at least 2 partners or investors who hold company shares.

These shares can be sold or transferred. However, unlike a public shareholding company in Bahrain, these shares cannot be offered to the general public for subscription. The shareholders’ and investors’ liability is limited to the value of their shares in the company. 

Both GCC nationals and foreign investors can own shares in a Bahrain Shareholding Company. Additionally, US citizens are treated the same as GCC nationals, meaning no local sponsor is needed, though having a local office is mandatory. GCC citizens can own 100 per cent of the business, and foreign investors may also hold full ownership depending on the type of business activity.

Requirements of Bahrain Shareholding Company Closed Entity

When establishing a BSC, you must meet certain requirements for company registration in Bahrain. They include:

• A local office presence
• Minimum of two investors/partners/founding shareholders
• Minimum of three directors
• Minimum share capital of BHD 250,000
• A minimum of 50 per cent of the capital must be paid initially at the time of incorporation and the remaining capital must be paid within three years
• Annual submission of the audited financial statements to Ministry of Industry and Commerce (MOIC)

What Sectors are Most Suitable for Bahrain Shareholding Company?

Bahrain Shareholding Company is ideal for the following sectors:

1. Manufacturing
2. Research & Development
3. Banking services
4. Insurance business
5. Investment activities

Advantages of Setting up a Closed Bahrain Shareholding Company

There are many benefits to setting up a closed BSC including:

• 100 percent foreign ownership for businesses across most sectors
• No requirement for Bahraini partner or shareholder
• Investment opportunities for Bahraini nationals, GCC nationals, and foreign investors alike
• Favoured foreign investment destination for US investors as 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 without the need for a local sponsor
• No corporate tax and repatriation of capital is not restricted as the Kingdom has double taxation agreements with several countries
• 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

When applying for shareholding company registration in Bahrain, you must submit certain documents. The following is a list of documents generally required:

General Documents

• Company registration application form
• Pre-approval from external entities (depending on the business activity)
• Draft Memorandum & Articles of Association
• Capital deposit certificate (after preliminary approval)
• Feasibility Study
• Financial audit 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
• 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 authorised signatory
• An original bank reference and CV for non-GCC nationals
• Copy of the original educational qualifications and experience depending on the business or commercial activity

Documents required if Partners are Companies

• 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 organisation authorised by the Ministry of Foreign Affairs and the Embassy of Kingdom of Bahrain at the country of origin of the company

Procedure to Register a Bahrain Shareholding Company 

Setting up a Bahrain Shareholding Company (BSC Closed) involves a series of legal and administrative steps regulated by the Ministry of Industry and Commerce (MOIC). With the help of Commitbiz business setup consultants, the procedure can be simplified. 

Below is the step-by-step procedure to register a Bahrain Shareholding Company Closed:

1. Choose a Company Name 

Start the process by selecting a unique name for your company. It is essential to confirm the name’s availability and compliance with Bahrain’s naming regulations.

2. Draft the Memorandum and Articles of Association

Prepare the company’s Memorandum of Association (MOA) and Articles of Association (AOA). These documents define the company’s objectives, capital distribution, and shareholder responsibilities. Both must be submitted in Arabic or bilingual (Arabic and English) format.

3. Obtain Initial Approval from MOIC

Submit the application for initial approval to the Ministry of Industry and Commerce (MOIC). This approval ensures that the proposed Bahrain Shareholding Company meets the government’s requirements and the intended business activity is permitted.

4. Deposit the Required Share Capital

Open a corporate bank account in Bahrain and deposit at least 50 per cent of the company’s share capital. A bank certificate confirming the deposit must be presented to the authorities.

5. Notarise the Company Documents

Once initial approval is received, the MOA, AOA, and other supporting documents must be notarised before proceeding to registration. This step validates the company’s legal existence.

6. Obtain your License and Commercial Registration (CR)

After notarisation, submit all required documents to the Commercial Registry at the MOIC for final registration. Upon approval, the company receives the business license and Commercial Registration (CR) certificate.

Note: Depending on the nature of the business, additional sector-specific licenses may be required from relevant Bahraini authorities.

Finally, register the Bahrain Shareholding Company Closed for VAT and comply with local rules and regulations.

Why Commitbiz?

Forming a Bahrain Shareholding Company is a structured yet rewarding process for entrepreneurs aiming to establish a strong corporate presence in the Kingdom.

With its transparent registration system, flexible ownership options, and investor-friendly regulations, Bahrain offers an ideal environment for regional and international investors alike.

By following the outlined registration procedure - from obtaining initial approval to securing the Commercial Registration certificate - investors can ensure their Bahrain Shareholding Company is fully compliant and ready to operate.

With the right planning and professional support from Commitbiz, setting up a Shareholding Company in Bahrain can open the door to long-term business growth and strategic opportunities in the GCC region. From finding an office space for rent to accounting and bookkeeping - our comprehensive services help you stay compliant while you scale your business. 

Get in touch with our experts today!