A Public Shareholding Company in Bahrain, commonly known as a Public Joint Stock Company, consists a number of investors or promotors (minimum of 7) who therein subscribe negotiable shares and have partnership ties with the company. The Bahrain Shareholding Company is a public legal entity separate from its owner while offering the shareholders with full liability protection and limits their partnership liability to the amount of invested capital in the company. Moreover, the subscribers of the stocks are liable only to the extent of the value of their shares in the public entity.
The formation of a Bahrain Shareholding Company requires a minimum shared capital of BHD 1 million stocked together from the investors, partners or shareholders in the form of stocks and the stocks can also be offered to the public. The shareholders of the Public Joint Stock Company can be Bahraini nationals, nationals of Gulf Cooperation Council or foreign investors. In accordance with the recent laws passed by the Bahraini Government to accelerate growth in the region full 100 percent foreign investment in several sectors of business. However, foreign investment in certain areas of businesses in Bahrain requires special approval from the Bahrain Ministry of Industry and Commerce which determines the percentage of shares.
Requirements of Bahrain Shareholding Company Public Entity
- Limited Liability Company structure
- Local office presence required
- Minimum share capital requirement of BHD 1,000,000
- Minimum number of seven founding shareholders is necessary
- Minimum number of three directors are required
- Annual submission of the audited financial statements to MOICT is compulsory
Bahrain Shareholding Company is ideal for
- Commercial business operations which are capital intensive such as:
- Oil & Gas Extraction
- Banking Services
- Insurance business
- Investment activities
Advantages of Setting up a Public Bahrain Shareholding Company
- Bahraini nationals, nationals of 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
- Perpetual succession as the retirement/incapacity/ other factors does not affect the life of the company or its business operations
- Shares of the company are transferable as they are listed in the public and can be sold in the market, to be converted to cash
- 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
- 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
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