Commandite by Shares Company in Bahrain

Commandite Partner by Shares is a Limited partnership by shares company structure established between two categories of partners, one of which is that of joint partners who are jointly liable to the extent of their entire personal wealth for the company’s obligations and the other is that of limited partners or silent partners (shareholders) who are not liable for the company’s obligations except to the extent of their equity (shares) in the capital. Moreover, the shares of the limited partners are negotiable, while the shares of the unlimited partners are not.

Types of Partners in Shared Commandite

1.Joint Partners/ Managing Partners

The managing/joint partners are jointly liable to the extent of their entire personal wealth for the company’s debts and obligations (Partners with unlimited liability). For managing partner with unlimited liability according to law, Bahraini citizens are only permitted.

2.Limited Liability Partners/ Silent Partners

The silent partners do not have any involvement in the direct management of the company but have a limited liability partnership to the extent of their investment (partnership limited only by shares). In Bahrain, silent partners can be any foreign nationals but are allowed to invest only a maximum of 49% of the capital of the company as sleeping partners only.

According to Bahraini laws, the sleeping partner or non-managing partner does not have to be named or identified in the company’s public records. Consequently, the sleeping partner’s name must not appear in the company name, as this would void their limited partnership status

Requirements for Setting up a Commandite Shares Company in Bahrain

These are the requirements for starting a business in Bahrain:

  • Have no criminal record.
  • The external auditor is required.
  • Local office presence is mandatory.
  • Minimum shared capital of BHD 20,000.
  • A minimum number of 4 partners or promoters are required.
  • Minimum of two directors are required (They don't need to be a shareholder).
  • At least one manager is required (i.e., The manager must be a Bahraini citizen).
  • Annual submission of the audited financial statements to MOICT is compulsory.
  • Banking and insurance activities are not permitted under this company structure.

Advantages of Setting up Commandite Shares Company in Bahrain

  • Excellent connectivity to Saudi Arabia and other GCC countries.
  • Strategic location in the Middle East with Low operating costs.
  • Low minimum shared capital for shareholders & investors.
  • Can have 100 percent foreign ownership is allowed.
  • Local business operations in Bahrain are allowed.
  • Access to Bahrain's double taxation treaties.
  • Local sponsors are not necessary.
  • Zero percentage corporate tax.

Check out this article for learning about the business oppurtunities in Bahrain.

Documents required to setup Commandite Shares Company in Bahrain

1. General Documents

  • External entities pre-approval depending on the type of business activity.
  • A draft copy of Memorandum Of Association and Articles of Association.
  • Financial auditor’s report or evolution letter for in-kind capital.
  • Company registration application form.

2. Specific Documents Concerning Company Partners

  • A copy of commercial registration certificate obtained from MOIC.
  • All the documents of the authorized foreign company must be authenticated from the Ministry of Foreign Affairs and the Embassy of Bahrain at the country of origin.
  • A draft copy of MOA and AOA and its amendments specifically for foreign companies.
  • Latest audited financial report if the company is at least one year old.

3. Specific Documents Concerning Individual Partners

  • Copy of CPR for Bahraini partners and expatriates, passport and visa page copies for non-Bahrainis.
  • Original, stamped and signed no- objection letter from the current employer for Bahraini 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 the non- GCC nationals.
  • Original educational qualifications and experience letter depending on the business activity.

4. Specific Documents Concerning Directors of the Company

  • CPR or passport copies for non-Bahraini directors.
  • Board Of Directors or general assembly resolution to be a shareholder in the company.

It should be noted that the Ministry of Industry, Commerce, and Tourism (MOIC) has the right to request additional documents if necessary at any time during the procedure.

How to Setup Commandite Shares Company in Bahrain?

Well, to proceed with the business setup process of a commandite shares company in Bahrain, one has to go through the following process.

  • Obtain the company registration application form from MOIC in Bahrain.
  • Complete the form by mentioning all the personal as well as professional details of the shareholders, partners, and directors of the company.
  • Submit the same to the MOIC with the required documents asked in the application.
  • Usually, it takes a minimum of 2 days for the authorities to evaluate the application.
  • File for Commercial Registration in Bahrain if the application is accepted by the Ministry.
  • Once the evaluation is done you can submit all the documents with an attached copy of the business plan.
  • Draft a Memorandum of Association and Articles of Association. Once the document is prepared and accepted by the Bahraini Ministry it must be signed by the notary and a copy must be submitted online.
  • It takes 5-10 business days to get an approval and register the company with the MOIC.

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