Setting up a company in Bahrain

01Four routes into Bahrain

A foreign company operates in Bahrain through one of four routes.

02Foreign ownership

Foreign ownership is set activity by activity. Ministerial Decision 40 of 2021 sorts commercial activities into five schedules. Most activities are open to up to 100% foreign ownership, with the exceptions set by schedule.

• Decisions 53 of 2024 and 71 of 2025 amended Decision 40 of 2021.

03Conditions and exceptions

Schedule 4 activities carry capital, revenue and market conditions. Separate rules cover distributors, individual shareholders, oil and gas and beneficial owners.

Schedule 4 conditions

• Decision 53 of 2024: dated 17 October 2024 and in force the day after gazette publication. The Bahraini company needs paid capital of BHD 100,000. The parent needs annual revenue of at least EUR 750 million. The parent must operate in at least 10 markets.

Other rules

• Authorised distributors (Article 4 bis): a company with up to 100% foreign ownership is exempt from the Bahraini ownership rule for authorised distribution in three cases. A Bahraini-majority company of at least 51% already distributes the same trademark. The trademark owner meets the Article 5 conditions. Or the company holds rights to a trademark of economic importance and the Council of Ministers approves.
• Decision 71 of 2025, announced on 26 November 2025: five activities moved to up to 100% foreign ownership. They are data monitoring and protection consultancy, electric power generation, electric power transmission and distribution, port and private jetty management, and real estate brokerage.
• Decision 71 of 2025, Schedule 4 conditions: seven more activities allow up to 100% foreign ownership under the Schedule 4 conditions. They are rental of recreational and sports goods, interurban passenger rail, freight rail, glass and mirror cutting, ship recycling, and two machinery leasing activities. Vending-machine retail needs one Bahraini or GCC share.
• Case-by-case approval: Article 345 of the Commercial Companies Law lets the Minister approve a foreign company in a restricted activity without a partner.
• GCC partner structure: where a GCC stake is required and a corporate GCC shareholder is used, that company must be wholly owned by GCC nationals through the whole chain and established in the GCC.
• Individual foreign shareholders: they need Ministry of Interior security clearance. The law sets no timeline for it.
• Oil and gas: extraction and support activities are open to up to 100% foreign ownership under an agreement with the Government of Bahrain.
• Beneficial owners: disclosure applies at 10% or more of capital or votes and is renewed each year.

04Legal forms and capital

The Commercial Companies Law and the Commercial Registry Law set the forms. A WLL has no statutory minimum share capital.

• The Commercial Companies Law is Decree-Law 21 of 2001. The Commercial Registry Law is Legislative Decree 27 of 2015.
• Decree-Law 38 of 2025 took effect on 12 September 2025. It amended the Commercial Companies Law, abolished partnerships by participation and moved personal liability to directors and shadow managers.
• Virtual board and shareholder meetings are allowed by default.
• Schedule 4 foreign-owned companies need BHD 100,000 paid capital.

05Licences and authorities

MOIC issues the Commercial Registration and the activity licence through Sijilat. Other bodies add approvals for their sectors.

• A change of ownership or a share transfer needs MOIC registration.
• No separate foreign investment licence applies to share transfers.

06Steps, timing and fees

Registration runs through Sijilat in two stages. A Commercial Registration (CR) without a licence comes first. The licence request follows.

1. Apply on Sijilat for a CR without a licence. The MOIC Registration Department reviews and decides on the application and the applicant pays the fees.
2. Request the licence on Sijilat. The Registration Department decides on the application.
3. Obtain approval from the licensing authorities.
4. Notarise the memorandum of association.
5. Present the bank certificate showing cash capital, or documents for in-kind capital.
6. Pay the fees. MOIC completes the transaction.
7. Register as an employer with the Labour Market Regulatory Authority (LMRA) and the Social Insurance Organisation (SIO). Register with the National Bureau for Revenue (NBR) for VAT only where the company must register for VAT.

Timing and fees set by MOIC

• CR without a licence: the fee is BHD 50 and the processing time is 3 working days. It is valid for one year.
• What a CR without a licence allows: it does not allow the activity to start. It allows preliminary tasks such as leasing commercial space, approaching banks, engaging vendors and reserving a commercial name.
• Licence request: the MOIC processing time is 3 working days. The notarisation fee is BHD 20.
• Add an activity: the fee is BHD 20 plus transaction fees and the processing time is 3 working days. It needs approval from the licensing authorities and notarisation of the amended memorandum.
• Business licences can be applied for only after the CR is obtained.

Applying

• An applicant needs an advanced eKey to apply on Sijilat. Otherwise a professional body, or a person with a notarised power of attorney who holds an advanced eKey, applies.
• Sijilat lists over 350 business activities. Each has its own requirements.

Documents

• A foreign company partner provides a decision to establish or join the company, a certified copy of its commercial registration and a certified copy of its memorandum of association with amendments.
• A branch of a foreign company provides a certified parent company decision to open the branch, a certified power of attorney for the branch manager, a financial report signed by a certified auditor, a letter of guarantee for the branch, and certified copies of the commercial registration and memorandum of association with amendments.
• Foreign documents need an apostille. Bahrain is a party to the Hague Apostille Convention.
• Some documents need Arabic translation.

07Free and industrial zones

PwC lists three zones. Each has its own customs or VAT features.

• The Bahrain Economic Development Board names Bahrain Investment Wharf as part of the Salman Industrial City logistics network with BIIP and BLZ.
• Bahrain levies no corporate income tax on ordinary commercial profit, so the zone terms concern customs duty, VAT and licensing.

08Bank accounts

Companies open accounts with licensed Bahraini retail or commercial banks. Salaries are paid through banks.

• Banks run their own checks.
• Salaries are paid through banks under the LMRA Wage Protection System.

09Reporting duties

Companies keep accounts under IFRS and file audited accounts with MOIC within six months of the financial year end.

• Who files: public and closed shareholding companies, WLLs and branches of foreign companies. A registered audit firm prepares the accounts. A directors' signature is needed, two for shareholding companies including the chairman. Filing is through the online portal.
• Financial year: no fixed statutory year end applies. A company with a 31 December year end files by 30 June.
• Late filing: MOIC places a violation on the CR. It blocks online applications and CR renewals.
• Beneficial owners: disclosure applies at 10% or more of capital or votes and is renewed every year.
• Sijilat filings: CR renewal, changes of directors, shareholders, activities or capital, and beneficial owner updates.
• NBR filings: VAT returns online. DMTT registration, advance payments and returns for in-scope groups.
• Payroll filings: SIO monthly by the 15th. LMRA Wage Protection System.

10Incentives and support programmes

Support comes from Tamkeen (the Labour Fund), the Economic Development Board, the Ministry of Labour and the Bahrain Development Bank. Seven Tamkeen programmes are listed here.

Funding and programme status

• Tamkeen is funded largely from work permit fees. About 80% of those fees go to Tamkeen.
• Tamkeen suspended several enterprise programmes for redesign in 2026. They include Start Your Business, Business Growth, Digital Solutions, Financing Support, Riyadat and Mashroo3i.
• Tamkeen closed Train and Place, the Wage Increment Programme for new employees, Global Ready Talent and Global Ready Entrepreneur from January 2026.
• The National Employment Programme, Apprenticeship, Jobseeker Training, Freelancer Support and SME Fund remain open.
• Support programmes target Bahraini workers and enterprises in Bahrain. They are not grants for a foreign parent company.