Company formation in Bahrain
Bahrain Limited Liability Company (LLC) offers foreigners the lack of corporate tax along with other tax exemptions. Foreigners may own 100% shares in LLC.
The law applicable to all companies is Decree No 21 of 2001. It is also known as "Commercial Companies Law" (CCL) from 2001.
Foreigners who want to own 100% of shares in the LLC must abstain from operating in Bahrain. Many business activities in Bahrain may require a 51% shares by Bahrain citizens.
Companies from Bahrain are active investing in real estate in Poland and other markets.
Bahrain Limited Liability Company has the following advantages:
- a limited liability company engaged exclusively in business activities outside of Bahrain may be 100% owned by foreigners
- LLC and shareholders are not subject to any type of taxation
- one shareholder who controls the company
- low minimum share capital: currently the minimum share capital is approximately USD 2650
Foreigners can create three different types of limited liability companies.
1. SPC - Single Person Company is a limited liability company for one owner. Only one shareholder who manages the company himself is required. The company name must end with the words "Single Person Company" or the abbreviation "S.P.C.".
Foreigners who are a natural person or a single legal entity can create SPC in Bahrain. The only prohibitions on business activities are banking, insurance and financial services. SPC can be involved in both local and international activities.
2. WLL - abbreviation for "With Limited Liability" which resembles the European GmbH and SaRL. The law requires at least two shareholders and two directors.
In addition, a local manager is required, who is usually the secretary of the company. WLL may not conduct banking or insurance activities or invest funds on behalf of third parties.
3. Bahrain Shareholding Company resembling a limited liability company. At least two shareholders and board members are required. It is a public joint-stock company, ideal for a large number of investors for large projects.
The minimum share capital is USD 660,000 and at least 50 shareholders. A board of directors with at least three members is also required. All shares are sold publicly and the company can be listed on the Bahrain stock exchange.
All three companies provide limited liability to shareholders and can be 100% foreign owned.
The proposed company name may be registered by the company register in Bahrain. All founding documents are filed in the company register. After submitting, company details must be published in the journal. Preparing documents and registering them by the company register may take up to two weeks.
A minimum requirement is two shareholders who form a company, with the exception of a SPC company. Shareholders can live anywhere in the world and be citizens of any country. Residents are not required.
Two directors are needed to set up a company. Most companies appoint three directors to avoid problems when voting. Directors may be citizens of any country and do not have to live in Bahrain.
There is no requirement for a resident director. The only required official who must be appointed by the company is the secretary who acts as a manager.
The company must have a local address of the registered office. Foreigners most often use the address of their lawyer's office or accountant.
There is no corporation tax, capital gains tax, withholding tax, gift tax, property tax or inheritance tax. The only taxes are paid by the oil industry companies: oil production, refineries and distribution companies.
The names and citizenship of directors and shareholders are included in public registers.