A Single Person Company in Bahrain is very similar to a Sole Proprietorship but is a business with limited liability. It means that the shareholder’s liability is limited to the size of their capital in the company. It is the most common approach to company registration in Bahrain. Both an owner and a corporation may own a single-person corporation. An SPC may be 100% foreign-owned, but few SPC operations are not allowed for 100 % foreign ownership.
One of the benefits of the SPC in Bahrain is that there is no need to conduct annual or extraordinary general meetings of the company; the company must merely send its audited financial accounts to the Ministry of Trade and Commerce.
A single individual company is a different legal body from its owner. It provides a limited liability company arrangement where the stock is wholly owned by a single shareholder or corporate entity or by any foreign person with full liability protection in Bahrain. By registering the company in Bahrain, the single owner of the firm’s share capital shall not be responsible for any other company’s liabilities except by the amount of the company’s assigned share capital.
The SPC in Bahrain can not conduct commercial practices related to lending, insurance, and investment operations and can not issue public securities, negotiable warrants, or debits.
Underwriting shares in public may neither incorporate a company, increase its share capital, nor borrow for its account. As well, no claims or bonds can be transferred or issued to it.
The owner / single shareholder of the company's share capital must distinguish between its financial planning and the company’s share capital.
Characteristics of an SPC in Bahrain
- There should be just one owner and no partner requirement.
- The capital requirement to set up the SPC is as low as BD1,000, depending on the type of the operation.
- The Articles of Association are the primary documents of the SPC.
- The minimum number of owners, directors, and promoters shall be one.
- Local activities are approved.
- The involvement of the local office is compulsory.
Requirements for Establishing a Single Person Company in Bahrain
- The minimum capital of BHD 50,000 is required.
- The presence of local office needed
- A single owner is appropriate as a sole owner (can also be a foreigner)
- Needs at least one agent who is the sole owner
- A minimum of one shareholder is necessary.
- Must have to have an external auditor
- The annual filing of audited financial statements to the MOICT is mandatory.
Benefits of Establishing a Single Person Company in Bahrain
- 100 percent of foreign investment allowed
- Limited Liability Company framework (According to Article 292 of the Company Commercial Law)
- Fewer rules and regulation than W.L.L Company structure
- Local business activities in Bahrain are allowed
- More than 300 activities permitted for foreign citizens
- Local sponsors are not required
- The company owner can designate a manager to manage business operations on his/her behalf
Business Climate in the Kingdom of Bahrain
- Liberal and entrepreneurship-friendly strategies
- Tax-friendly programs without corporate tax, corporation tax, capital gains tax, donation tax, inheritance tax, estate tax, and withholding tax.
- As a second language, English makes company activities simpler.
- Strong finance and banking industries to focus on
- Strategic position in the Middle East and low maintenance costs
- Excellent access to Saudi Arabia and other CCG countries
- Access to the dual taxation treaties of Bahrain
Documents Required to Establish Single Person Company in Bahrain
- Company incorporation application
- Original Announcement of a Single Person Company
- Draft Memorandum of Association & Articles of Association according to your current SPC
- Foreign companies pre-approval (depending upon the business operation)
- Certificate of capital deposit (after preliminary approval)
- Financial auditor’s statement or evolution letter for any transaction or incoming capital
- Appointment letter from an independent auditors
- Proposed authorized local office address (a copy of a signed office lease contract if one exists)
Documents Required for Individuals
- CPR copy if the owner is Bahrain or Bahraini expatriate
- Passport and visa pages copy if the owner is a Non-Bahraini resident.
- CPR copy of Manager if Bahraini resident or Copy of the Passport if Manager is non-Bahraini
- Passport and visa form copy of Manager if a non-Bahraini resident, Original, approved & signed no objection statement from the current employer for Bahraini working in the private sector (authorized by the owner of the Establishment or from the company’s authorized signatory)
- An initial bank reference and CV for non-GCC citizens
- Initial educational qualifications and experience letter (according to the type of company operation)
Documents Required for Company
- Copy of the parent corporation’s Business Registration certificate
- Copy of parent corporation’s MOA, AOA, and amendments for foreign-registered business
- Parent company’s latest audited financial statement (not required if the entity is less than one-year-old)
- General assembly agreement or Board of the director as the single owner of the SPC
How to Establish a Single Person Company in Bahrain?
Bahrain provides a liberal business climate, competitive tax rules, and low required operation costs in the Middle East. Incorporating a Single Person company in Bahrain requires a specific process to be followed before being approved with the Ministry of Industry, Commerce, and Tourism.
1. Business Name
An investor or sole owner willing to initiate an SPC must choose a company name for a legal entity that is not identical to any other licensed legal entity in the Kingdom of Bahrain. SPC Business’s naming observes those rules and regulations in compliance with Bahrain’s laws and customs.
2. Application Form
The application form for authorization of a company must be acquired and filled with personal, professional, business information about a private or corporate body interested in starting a Bahrain company. The complete registration form should be submitted to the Ministry of Industry, Trade, and Tourism (MOICT) with a description of the category of economic practice, the investor’s ethnicity, the proof of money, and the investor’s educational qualifications.
3. Article of Association
Article of the Association (AOA) is an essential document for registering the SPC Corporation in Bahrain. The AOA shall regulate all the rules and regulations relating to the company’s activity in the region. When this document is prepared, it must be submitted to the Ministry, and the notary must appropriately sign the approval, and a copy must be submitted electronically.
4. Commercial Registration
The SPC must obtain the Commercial Registration Certificate as it enables the corporation to carry out its commercial business activities in the Kingdom of Bahrain. Also, to satisfy the conditions of the Ministry and the criteria of possession, the applicant must meet those criteria.
- 18 years of age or higher, while other company activities require at least 21 years of age
- There is no criminal record.
- Good Mental Health
- Dedicated to the company (applicants working in the private sector are expected to have a 'No Objection' certificate provided by their present employer)
- Passport valid for at least two years (if the individual is a non-Bahraini citizen)
Why Establish an SPC in Bahrain?
Many investors want to invest in Bahrain because of its business-friendly environment, tolerance and inclusive culture, and the added benefit of broader GCC consumer outreach. Bahrain also charges no tax whatsoever on SPC. That includes income tax, payroll tax, capital gains tax, gift tax, inheritance tax, asset tax, and withholding tax.
Who Are We?
If you're looking to invest in Bahrain and start an SPC, it's one of the best times to open up because relative to other neighboring countries, the cost of running a company in Bahrain is still meager. The procedure can be challenging without local expertise, so it is recommended to take the help of an advisor or a specialist. Their support would be crucial to securing your money and saving your time.
At Commitbiz Business Consulting, we offer a range of creative and path-breaking business services to founders, developers, and business leaders in Bahrain. We are a team of professionals who are specialized in setting up business activities in Bahrain. If you want to know the Kingdom of Bahrain’s business prospects, please feel free to contact us.