How to Set Up a With Limited Liability Company in Bahrain?

by Zaara 14, Jun 2021

How to Set Up a With Limited Liability Company in Bahrain?

A With Limited Liability Company, generally known as the Limited Liability Company, is one of the most prominent business setups of international investors in the Kingdom of Bahrain. It provides for full foreign ownership of most of the business operations. A Limited Liability Company is a corporate entity composed of two or more. The shareholders/partners/investors are wholly liable for the company obligations and liabilities only to the extent of their shareholding in the securities. They cannot issue public securities, negotiable rights, or bonds.

When starting your business in Bahrain, you should know that the number of investors of shares in the company will vary from 2 to 50 under Bahraini Company Law when registering with the Bahrain Ministry of Industry, Trade, and Tourism (MOICT). While this company has two partners at the time of incorporation, it can, at any time, add new partners with the necessary paperwork and specific shareholding pattern information as the transition of shares is prohibited.

Characteristics of a With Limited Liability Company in Bahrain

  • No prerequisite for a local sponsor, i.e., 100 % foreign ownership, is allowed.
  • Minimum 2 directors and two investors are required.
  • Limited Liability Company is not allowed to participate in the finance or insurance sector practices or manage funds on behalf of third parties.
  •  Limited Liability Company is expected to submit audited annual financial reports.
  • The need for an external auditor
  • Presence of the local bureau

Requirements for Establishing a With Limited Liability Company

  • Limited Liability Company Framework
  • The presence of a local branch is needed.
  • The initial share capital of BHD 100,000;
  • At least two shareholders must be enrolled with the possibility of including a limit of 50 shareholders at a later date.
  • A minimum of two directors is required.
  • External auditors are required.
  • They are dedicated to industry (applicants working in the private sector are expected to request a "No Objection" certificate provided by their current employer.
  • have no criminal history
  • The annual filing of audited financial statements to the MOICT is mandatory.

Steps to Setup a With Limited Liability Company in Bahrain

1. Choose your Company Operation

As the first move as an investor or an entrepreneur, you need to find out what kind of business opportunities suit you and the nature of your requirements in Bahrain. In particular, you need to check on licenses, business permits and review government bodies’ permissions regarding whether you may wholly own the business or whether you need a native owner (as required for such essential business operations).

2. Select a Company Name for your Business

Choosing a corporation or agency name is essential because it represents a corporate enterprise’s market identity and shows what the corporate is all about. The naming of Bahrain companies has to be treated carefully as registered trademarks; copyrights are strictly observed and applied by the Ministry of Industry, Trade, and Tourism (MOICT). An organization’s name depends on Bahrain to follow such name procedures according to its laws and regulations.

3. Select the Company Total’s Share Capital

While a minimum share capital required for a Limited Liability Company in Bahrain is BHD 100,000, there are no upper limit constraints or fixed numbers. You should invest in your company based on the nature of service, the costs involved, and consumer demand.

4. Determine the Shareholding Pattern

The shareholding pattern dictates who owns the stock in what proportion of shares. The value of claims depending on the company’s capital. Because of the laws in Bahrain, the Limited Liability Company’s arrangement guarantees that the owners are entirely responsible for the company’s obligations and are liable only to the extent of their shares.

5. Decide your Partner / Shareholder Name

Shareholders shall be deemed a signatory jointly or exclusively for their appointment as Chairman, CEO, Managing Director, etc. Two directors must create a Limited Liability Company. Many of the corporations name three directors to avoid close voting. Directors may be residents of either country and may not have to live in Bahrain. A resident director is not needed.

6. Choose a Customer Service Provider

Suppose you have agreed on all of the issues mentioned above relating to creating a W.L.L company in Bahrain. In that case, you will select a company responsible for delivering company forming services in Bahrain.  On signing a deal with the service provider, the agreement is secured.

The company service provider shall take responsibility on your behalf, thereby allowing you to concentrate on your core business activities. We at Commitbiz provide full business setup services for the Kingdom of Bahrain, including the procurement of licenses, authorizations from the authority concerned, the alignment of company activities according to the legislation, the management of proper registration procedures, the procurement of office accommodation, HR & payroll assistance, auditing, and accounting services.

The Procedure for Establishing a W.L.L Company in Bahrain

1. Application

After verifying the requirement, the application form can be filled in with the information below and sent to the MOICT. The application form includes specifics of the applicant's name, type of business activity, visa status in Bahrain, the total number of shareholders, real capital, shareholding pattern, nationality, passport copy if non-GCC, kind of entity, etc.

2. Commercial Registration without License

The MOICT shall review the application, and the Commercial Registration, except the license, is given. If any security lapse or false information is found in the application, the Ministry shall deny it. It is chosen by, and the application is authorized, payment must be made to receive a CR without a license.

3. Get your license

After issuing the Company Registration, you are expected to obtain the requisite business licenses as defined by the MOICT according to the business operation. When the licensing conditions are fulfilled, the MOICT and other regulatory bodies shall apply for the appropriate licensing.

4. Memorandums of Association (MOA) and Articles of Association (AOA)

The Memorandum of Association (MOA) and Articles of Association (AOA) of W.L.L. in Bahrain is a crucial text and regulates all terms and conditions of the relationship between the shareholders. Once approved, the MOA and AOA must be signed by the notary, and the notarized copy must be submitted electronically.

5. Certificate of Bank Deposit

When any of the above procedures are finished, the bank deposit certificates from the bank let the company open and retain it. The bank deposit certificate is submitted electronically to the MOICT.

Benefits of Setting up a W.L.L Company in Bahrain

  • 100 % foreign investment in most of the company operations
  • No prerequisite for local sponsors
  • Local activities are approved
  • LLC and its investors are not subject to any taxes in Bahrain.
  • High minimum equity capital for lenders and investors
  • LLC can recruit expatriate workers in Bahrain
  • 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 for Establishing up a Bahrain W.L.L Company

  • Application form for incorporation of the company
  • Certificate of Money Deposit
  • Financial auditor's report on some form of incoming capital
  • Copy of the Passport whether the investor is a non-GCC or a non-Bahraini investor
  • Copy of the Passport whether the Director is not a GCC or a non-Bahraini
  • Copy of the Passport whether the Designated Signatory is non-GCC or non-Bahraini
  • Power of Attorney issued-duly notarized-on behalf of the consultant representing the claimant before the Ministry
  • Applicant's educational credentials
  • Chosen business address from which the business is to be run
  • Draft Memorandum of Association of the W.L.L.
  • Board of Directors Proposal on the creation or involvement of the W.L.L. – if the company’s founder.
  • Board of Directors Resolution on the naming of the current W.L.L. as Director and Approved Signatory – where the company founder(s)
  • Company founder Commercial Authorization (or equivalent)-if company founder(s)
  • Memorandum of Affiliation (or equivalent) of the founder of the Company-if, the founder(s) of the Company

Who We Are

We at Commitbiz exclusively guide investors, entrepreneurs, and leaders to understand their concept of beginning their W.L.L company in Bahrain while helping them enter their industry and concentrate on the core business.

Our team of professionals are experts in local Bahraini laws and customs hence can offer customized solutions for starting your W.L.L Company in the Kingdom of Bahrain. The expert will guide you with our expert advice to make a distinctive business decision propels your business on the path of success. If you want to know the business opportunities in the Kingdom of Bahrain, please contact us-we'd be glad to assist.