Simple Commandite Company (SCC) in Bahrain

A Simple Commandite is a limited partnership company structure established by one or more partners who are jointly liable to the extent of their entire personal wealth for the company’s obligations and other partners who have invested in the company but are not involved in its management (i.e., Limited partner). Limited partners are held responsible for the company’s obligations only to the extent of the capital contributed by them. A Simple Commandite partnership is formed by two categories of partners:

Types of Simple Commandite

1. 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 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.

2. Managing Partners

The managing 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.

Features of Simple Commandite Company in Bahrain

  • No minimum shared capital requirement (however, depending upon the business activity the minimum share capital requirement changes).
  • Partnership limited by shares structure/Partnership with unlimited liability.
  • Banking, insurance, and investment arrangements are prohibited.
  • Foreign ownership is limited to 49%.

Advantages of Setting up a Simple Commandite in Bahrain

  • Zero percentage corporate tax.
  • Local operations in Bahrain is permitted.
  • No limitations on hiring expatriate labor.
  • Access to Bahrain’s double taxation treaties.
  • Strategic location in the Middle East with Low operating costs.
  • Excellent connectivity to Saudi Arabia and other GCC countries.

Requirements for Setting up a Simple Commandite Company

  • Minimum number of two directors are required (i.e., not necessary to be partners, but needed to be a Bahraini national).
  • A minimum of two partners required, in which one can be a limited partner and one can be unlimited (Bahraini citizens only).
  • The company's authorized signatories must also be of Bahraini nationality.
  • At least 51% of Bahraini shares are necessary.
  • Foreign ownership is limited to 49%.
  • Local office presence necessary.

Documents Required to Set Up a Simple Commandite Company in Bahrain

1. General Documents

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

2. Specific Documents Concerning Company Partners

  • A draft copy of MOA and AOA and its amendments specifically for foreign companies.
  • BOD or general assembly resolution to be a shareholder in the company.
  • A copy of the commercial registration certificate.

3. Specific Documents Concerning Individual Partners

  • An original bank reference and CV for non-GCC nationals.
  • Original educational qualifications and experience letter depending on the business activity.
  • 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).

4. Specific Documents Concerning Directors of the Company

  • CPR or passport copies for non-Bahraini directors

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.

The Procedure of Setting up a Simple Commandite Company in Bahrain

  • Obtain the company registration application form from MOIC in Bahrain.
  • Usually, it takes a minimum of 2 days for the authorities to evaluate the application.
  • Submit the same to the MOIC with the required documents asked in the application
  • It takes 5-10 business days to get an approval and register the company with the MOIC.
  • 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.
  • Complete the form by mentioning all the personal as well as professional details of the shareholders, partners, and directors of the company.

Why Setup a Simple Commandite Company in Bahrain?

The Kingdom of Bahrain is an exclusive location in the Middle East for investors and entrepreneurs who are keen in widening their horizon in the business world as a Bahrain company formation has its own advantages like:

  • Lower land taxes including building and property license fees.
  • Lowest business operation cost in the Middle East.
  • Supplementary exemption from commercial tax.
  • Foreign investment and ownership permitted.
  • Exemption from Import and export duties.
  • Streamlined business policies.
  • Liberalized economy.

Thus, you can see that the location turns out to be a perfect place for the business setup process. If you are looking for one, do contact us today- we’d be glad to assist.