Guide to Establish Bahrain Shareholding Company (B.S.C Closed)

by Zaara 20, Apr 2021

Guide to Establish Bahrain Shareholding Company (B.S.C Closed)

A Closed Shareholding Company usually referred to as a Closed Joint Stock Company (BSC Closed), typically consists of various entities but not less than two as partners or owners who, by negotiable shares, belong to it. These shares may be exchanged or exchanged but can not be exchanged via subscription to the general public. Shareholders or owners shall be held liable for their respective liability regarding the corporation’s debts, and the penalty will be restricted to the extent of the number of their shares.

A shared capital of BHD 250,000 is the minimum share capital required for the start-up of a closed company. In contrast, a minimum of 50 percent of the money must be generated initially and remain within a defined span of three years.

GCC nationals are allowed to hold business shares, as are international owners. Also, US nationals are handled equally to GCC residents, and a local sponsor is not necessary, but the regional office’s participation is mandatory. GCC people are required to own 100 % ownership of a business enterprise in Bahrain, and international investors and entrepreneurs may gain up to 100% ownership, depending on the form of business operation. Moreover, the GCC region has widened its scope to uplift the non-oil sector business to a great extent. Now, let’s have a glimpse at the business incorporation in Bahrain.

Requirements of Bahrain Shareholding Company Closed Company

  • Limited Liability Company framework
  • Regional office existence needed
  • A minimum of two investors/partners/founding shareholders are necessary
  • A minimum of three directors is needed
  • A required share capital requirement of BHD 250,000
  • A minimum of 50 percent of the cash must be paid initially at the time of registration, and the remaining money must be generated within three years.
  • Shares can be transferred to the sole owner but cannot be sold for general public subscription.
  • The annual submission of the audited accounts to MOICT is mandatory.

Bahrain Shareholding Company is ideal for

  • Manufacturing
  • Research & Development
  • Banking services
  • Insurance business
  • Investment activities
  • Local operations are permitted.

Benefits of Establishing up a Closed Bahrain Shareholding Company

Bahrain is an emerging nation in the Middle East, poised to grow and develop exponentially. Here a few advantages to investing in Bahrain:

  • 100 percent foreign investment for most of the companies
  • No requirement for Bahraini partner or shareholder
  • Bahraini nationals, nationals of GCC states, and overseas investors are permitted to invest in the Bahrain joint-stock business.
  • Preferred international investment destination for US investors as the US citizens are treated similarly to the GCC citizens in the Kingdom of Bahrain following the Bahrain-US Free Trade Agreement.
  • Ease of holding as the Bahrain Shareholding company framework allows for a corporate directorship with no local needed.
  • Bahrain currently charges no corporate tax, and the repatriation of capital is not exempted as the Kingdom has double taxation agreements with many nations.
  • Zero percent corporation tax for a Bahrain Limited Liability Business
  • No duties levied on the goods imported and exported from the free zone (this requires a Bahraini shareholder for trading and commercial activities)

Documents required for Establishing a Bahrain Shareholding Business

General Documents

  • Company incorporation registration form
  • External bodies pre-approval (depending on the commercial activity)
  • Draft Memorandum & Articles of Association
  • Capital deposit certificate (after preliminary approval)
  • Feasibility Study
  • Financial auditor report of any investment capital

Documents needed if Partners are Individuals

  • Copy of valid passport and visa page if the sponsor or investor is a non-Bahraini individual
  • CPR copy for Bahraini partners and ex-pats
  • Original stamped and signed no objection statement from the current employer for Bahrainis employed in the private sector (signed by the company’s holder or the company's authorized person.
  • An initial bank reference and CV for non-GCC citizens
  • Copy of the actual educational qualifications and experience depending upon the business or commercial operation

Documents required if Partners are Company

  • Copy of the business registration certificate obtained from the government or designated location
  • Proof of Memorandum or Article of association and its provisions for global entities
  • Latest audited financial statement of the company
  • Board of directors  resolution to be an investor in the company
  • The international company's documentation must be approved by the Ministry of Foreign Affairs and the Consulate of the Kingdom of Bahrain in the business's nation of origin.

Who We Are

We at Commitbiz assist business people, entrepreneurs, and leaders in transforming their business dream by helping them in their business incorporation, acquiring license & authorizations from government authorities, and helping you start your business in the Kingdom of Bahrain. If you intend to know the business opportunities in the Kingdom of Bahrain, do Contact Us. As a group of experienced professionals with knowledge on establishing business operations in Bahrain, we’d be glad to guide you in your endeavors.