A foreign company or business incorporated outside the country can establish operational branches in the Kingdom of Bahrain to carry out business there. Foreign companies interested in expanding into the Kingdom of Bahrain can be established as an operational office, or representative office, or regional office according to the business activity and requirements of the company.
Before starting their operations in the Kingdom of Bahrain, the foreign company branches are required to obtain approvals and apply for permits, licenses and authorization specific to the type of business activity from the Ministry of Industry, Commerce and Tourism (MOICT). Furthermore, the foreign company must comply with the rules & regulations, local laws and customs while operating in the country. According to Bahraini law, the liability of the company’s Bahrain branch must be in accordance with its parent company and it is a customary requirement of the Ministry of Industry and Commerce and the Central Bank of Bahrain (if applicable) that the parent company provides a guarantee in relation to the branch and appoints a branch manager.
Branches of foreign companies with an operational office are allowed to engage in banking, insurance and investment activities with the subject to approval from the Central Bank of Bahrain (CBB). Besides, suppose the foreign company has representative or regional offices. In that case, they are not permitted to conduct any business operations in Bahrain and are restricted to undertaking marketing and promotional activities in Bahrain.
Requirements for Setting up a Branch of a Foreign Company in Bahrain
- The parent company must bear all the liabilities of its Bahrain branch office and operations
- The parent company is required to issue a bank guarantee of at least $133,000 in favour of the Ministry of Finance and National Economy as a proof of funds to start the business in Bahrain
- Local office presence is mandatory
- The Bahrain branch of the company must have a Bahraini sponsor who can be a businessman or investor or partner company
- A Bahraini branch manager or local agent or Bahraini distributor must be appointed to sponsor to acquire a visa and obtain certain operational licenses.
- However, local sponsor requirement is exempt if the company runs their main operations using the registered business entity as a regional branch or if the company branch is licensed by Central Bank of Bahrain (CBB) and the Committee for Organizing Engineering Professional Practice (COEPP)
- Obtain pre-approval, licenses & register it with the Ministry of Industry, Commerce and Tourism (MOICT) and Commercial registry.
Advantages of Setting up a Foreign Company Branch in Bahrain
- The business entity can be owned 100 percent by a foreign owner
- No minimum share capital requirement
- A branch in Bahrain is permitted to secure their business premises, provide an invoice to Bahraini customers, sign local sales contracts, and receive income from clients.
- Banking, insurance and investment activities are allowed for the operational branch
- Strategic location in the Middle East offering liberal and business-friendly policies
Which Sectors the Bahrain Branch Office is Ideal For?
- Commercial business operations which are capital intensive such as
- Banking & Financial Services
- Insurance business
- Investment activities
Business Environment in the Kingdom of Bahrain
- Strong legal framework with liberal business-friendly policies
- With the English language being predominantly used makes business operations effortless
- A robust financial sector and the banking sector with effective business-friendly regulations
- Transparent licensing, supervision and regulation following the International Accounting Standards
- No taxes on income, capital gains, and wealth
- Excellent connectivity to Saudi Arabia and other GCC countries
- Lower business operating costs when compared to other GCC nations
(Note: The Gulf Cooperation Council (GCC) countries only refer to and comprise of The Kingdom of Bahrain, The Kingdom of Saudi Arabia, The United Arab Emirates, The State of Kuwait, The Sultanate of Oman, and The State of Qatar.)
Documents Required for Setting up a Foreign Company Branch in Bahrain
In order to register a branch office in Bahrain, the documents about the parent company must be translated into Arabic and legalized with the Bahraini regulatory authorities.
- Company registration application form
- External entities pre-approval documents (according to the type of business activity)
- Capital deposit certificate (after preliminary approval)
- Sponsorship agreement signed with a Bahraini trader, distributor, or partner company for operational branches (except the representative office, regional office, and GCC companies).
Documents Required for Company
- Copy of parent company’s Commercial Registration certificate
- Copy of parent company’s Memorandum Of Association, Articles Of Association and amendments for foreign registered companies
- Parent company's latest audited financial report (not needed if company less than one-year-old)
- General assembly resolution or Board of Directors as the sole-proprietor of the SPC
- Guarantee letter from the parent company taking full responsibility for the Bahrain branch
Documents Required for Manager or Directors
- CPR (Bahraini ID) copy if the manager is Bahraini or Bahraini expatriate
- Passport and visa pages copy if the manager is Non-Bahraini citizen
- CPR (Bahraini ID) copy of Director if Bahraini citizen or Copy of the Passport if Director is non-Bahraini.
- Authenticated power of attorney
The Process of Setting up a Foreign Company Branch in Bahrain
The process for foreign business registration in Bahrain commences with an application for commercial registration of the company. After selecting the name of the company which has to be unique and not similar or look-alike of any other registered legal entity in the Kingdom of Bahrain. The step-by-step guide for registering a branch of a foreign company is as follows:
- Fill the commercial registration application to form the branch office of an international company with all the necessary details
- Draft standard MOA and obtain preliminary approval from the Ministry of Commerce at the Bahrain Investment Centre.
- Acquire a lease approval from the Municipality to secure an office space
- Notarise and send a copy to the Ministry online
- Open a Bahraini bank account and obtain proof of deposit of the capital
- Deposit a guarantee to the bank in the name of the branch, the agent or an official representative, and the order of the Minister of Commerce and Industry
- Obtain a Certificate of Registration from the Ministry of Commerce
- Publish the incorporation notice in the official gazette
- Register the company and employees with the General Organization for Social insurance
Who We Are
We at Commitbiz have a team of professionals are experts in local Bahraini laws, and customs. We can offer customized solutions for starting your Company branch in the Kingdom of Bahrain and guide you with our expert advice you can make a distinctive business decision that propels your business in the path of success. If you want to know the business opportunities in the Kingdom of Bahrain, feel free to Contact Us.
What is a foreign company branch in Bahrain?
A foreign company branch in Bahrain is an extension of a company incorporated outside Bahrain that operates and conducts business activities within the country.
Can a foreign company establish a branch in Bahrain?
Foreign companies can establish branches in Bahrain, subject to specific legal and regulatory requirements.
What are the benefits of establishing a foreign company branch in Bahrain?
Establishing a foreign company branch in Bahrain offers advantages such as accessing the local market, expanding business operations, benefiting from tax incentives, and leveraging Bahrain's strategic location as a regional business hub.
Can a foreign company branch repatriate profits back to the parent company?
A foreign company branch in Bahrain can repatriate its profits back to the parent company, subject to applicable tax and foreign exchange regulations.