The Surging Bahrain Real Estate - How to Grab this Opportunity?

by Zaara 24, Aug 2022

bahrain real estate

Bahrain is a small island country located in the Persian Gulf. It is a modern and traditional society, with commerce at its heart. The country’s start-up culture has been increasing since the beginning of 2014.

The Bahrain Real Estate market is booming as it witnessed a high demand for residential project developments and buyers. 

A boost in tourism also sets up cinema halls and shopping malls. So, heavy investments are made for construction purposes, and the government also focuses on small businesses.

A Rapid Growth in Bahrain’s Real Estate Market

The table below contains the figures released by the country’s Survey and Land Registration Board:

Year 2020 2021
Value in US $ 1.9 billion 2.8 billion
No. of Transactions 19,405 26,136

A surge of 46% in the value of property deals.

During the projection period (2022-27), the luxury residential real estate market in Bahrain is anticipated to grow at a rate greater than 5%.

A growing population drives the country's demand for luxury residential real estate.

Reasons Favouring Setting Up Real Estate Companies in Bahrain.

The government’s strong economic policies and the country’s strategic geographic location are favourable for becoming a true international hub for business.

   1.  Bahrain Free Zones and their Benefits

A free zone company in Bahrain can eliminate or reduce most of the costs associated with operating there. There are no taxes on profits, export and import revenues, or capital gains and no regulatory framework for working out employment laws.

 Also, Bahrain’s free zone company formation requires less paperwork than a conventional commercial organization. 100% foreign ownership approvals are available without any definite end date.

Bahrain has several Free Trade Zones and Economic Zones, such as:

  • Bahrain Logistics Zone (BLZ)
  • Bahrain International Investment Park (BIIP)
  • Sheikh Khalifa bin Salman Port (KBSP)
  • Bahrain Investment Wharf (BIW).

   2.   The Beneficial Tax Regime

The government offers a range of incentives and benefits on the taxation front with no corporate income tax, no capital gains tax, no corporate alternative minimum tax, and no property or electricity taxes. 

The Business Investors can also opt for a tax group, a legal group of business entities. They are entitled to share the tax amount because they are treated as one business entity.

    3.   Cost of Company Formation in Bahrain.

The cost is 30% lower than in other GCC countries. Some other benefits are:

  • Some licenses and approvals are required, but the process is simple with minimal expenses, generally less than USD 500*. 
  • The minimum share capital for a limited liability company is around BD 50*. 
  • The first step of preliminary approval comes from the Ministry of Industry, Commerce, and Tourism, which costs around USD 132/BD 50*. 
  • Next, the Memorandum of Association needs to be notarised at approximately USD 80/BD 30*.

*Prices are subject to change. Kindly connect with us for confirmation.

How to Start a Business in the Bahrain Real Estate Sector?

To incorporate a company in Bahrain, several procedures are essential. The business investors need to go through the following steps to register a Bahraini company:

   1.   Selection of a Legal Structure

A clear business structure is essential for the business investors, based on the number of shareholders and share capital available.

   2.   Choosing a Trade Name

While selecting a trading name, an investor should take care of some norms:

  • It should be unique, new, and innovative
  • It shouldn’t sound offensive or contain any religious content
  • It shouldn’t breach public orders and morals
  • The registry books shouldn’t include the name
  • The trade name can be registered in Arabic or any other foreign language, backed by an Arabic translation.   

   3.   Registration of the Commercial Papers

The papers that need to be submitted to the government authorities are as follows:

  • Company registration application form
  • The visa and passport of the shareholder(s)
  • Identity proofs of the company’s representatives
  • Board of Director’s Resolution, Drafted Memorandum, and Articles of Association
  • List of business activities and the CV of each business partner
  • Appointment Letter, Power of Attorney, Specimen Signature
  • Bank reference letter and NOC from sponsor
  • A lease agreement having a mention of the company’s commercial address.

   4.   Gather a License from the Real Estate Regulatory Authority, Bahrain

A RERA (Real Estate Regulatory Authority) license is essential in any real estate business. 

Also, a business license needs to be obtained by the business entities in Bahrain. It is a legal permit provided by the government authorities after crucial scrutiny of the documents.

   5.   Post-Incorporation Process

After the company’s incorporation, managing the business entity is challenging; therefore, many services, like accounting and bookkeeping in Bahrain, need to be infused. 

Thus, establishing a company in Bahrain is an intelligent investment plan and profitable. But also, going through the legal procedures single-handedly would be challenging.

So, moving forward under the guidance of a business expert would be beneficial.

The most affordable and cost-effective business setup solution is just a call away. Contact us today, and we’ll be glad to assist you.

FAQs

What are the norms that should be taken care while deciding a company name?

While selecting a trading name, an investor should take care of some norms:

  • It should be unique, new, and innovative
  • It shouldn’t sound offensive or contain any religious content
  • It shouldn’t breach public orders and morals
  • The registry books shouldn’t include the name
  • The trade name can be registered in Arabic or any other foreign language, backed by an Arabic translation.

What is the tax system of Bahrain?

The government offers a range of incentives and benefits on the taxation front with no corporate income tax, no capital gains tax, no corporate alternative minimum tax, and no property or electricity taxes.

What are the documents that are required to get the license?

The documents required are as follows:

  • Company registration application form
  • The visa and passport of the shareholder(s)
  • Identity proofs of the company’s representatives
  • Board of Director’s Resolution, Drafted Memorandum, and Articles of Association
  • List of business activities and the CV of each business partner
  • Appointment Letter, Power of Attorney, Specimen Signature
  • Bank reference letter and NOC from sponsor
  • A lease agreement having a mention of the company’s commercial address.

What is the estimated growth of the real estate market in Bahrain?

During the projection period (2022-27), the luxury residential real estate market in Bahrain is anticipated to grow at a rate greater than 5%

Which authority is responsible for issuing a real estate license in Bahrain?

The Real Estate Regulatory Authority Bahrain.

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