Bahrain Business Licenses: A Step-By-Step Guide For Entrepreneurs

Bahrain is known for its business-friendly environment, offering 100% foreign ownership in most sectors and a streamlined registration process. The country has no corporate or personal income taxes, making it an attractive option for investors worldwide. The process of obtaining a business license in Bahrain involves several steps, including obtaining security clearance, registering your business name, securing an office address, drafting and notarizing legal documents, opening a corporate bank account, and obtaining final approvals from regulators and licensing authorities. The cost of setting up a company in Bahrain ranges from BHD 800 to BHD 2,150, and the typical timeframe for completion is 20 to 45 business days, depending on the complexity of the business structure and required licenses.

Obtaining security clearance

Understand the Purpose of Security Clearance:

The security clearance procedure is adopted by the immigration department to check the feasibility of a person applying for entry into Bahrain. It involves multiple checks to identify and mitigate risks associated with granting entry permission. The main objectives are to prevent the entry of terrorists, criminals, and individuals deemed unsuitable for entry into the country.

Gather Required Documents:

To obtain security clearance for your business license, you will need to provide the following documents:

• A copy of your passport, including the previous passport number.
• Travel history documents, such as visas or permits from other countries.
• Proof of business ownership in other countries.
• Education certificates and letters confirming your work experience.

It is important to ensure that your documents are clear, properly scanned, and notarized if required.

Submit a Comprehensive Profile:

To increase your chances of obtaining security clearance, it is advisable to submit a comprehensive and accurate profile. This includes providing clear and detailed information about your background, business activities, and any supporting materials that strengthen your case. Being transparent and meeting the requirements set by the NPRA improves your likelihood of a positive outcome.

Address Any Concerns or Defects:

If your security clearance request is defected, don't lose hope. This does not necessarily mean an outright rejection. It indicates that the NPRA requires additional information or clarification. Work closely with experienced professionals to address any concerns, provide necessary documentation, and demonstrate your commitment to operating a lawful and secure business in Bahrain.

Seek Professional Assistance:

Consider engaging the services of professional consultants experienced in the security clearance process for business licenses in Bahrain. They can guide you through the complexities, ensure compliance with regulations, and improve your chances of a successful outcome.

Registering your business name

Firstly, it is important to choose three unique and relevant names for your business. These names should be in line with Bahrain's naming conventions and should not infringe on any existing trademarks. It is also recommended to conduct a separate trademark search to avoid any potential conflicts in the future. The chosen name will need to be approved by the Ministry of Industry and Commerce (MOICT).

Once you have decided on three potential names, you can submit them to the MOICT for availability checks and approval. This can be done through the ministry's Commercial Registration Portal at https://www.sijilat.bh/. The new Sijilat system has made it easier to register a business name, and you can expect to receive approval within 18-26 working days.

In addition to the business name, you will also need to provide an office/shop/workshop commercial address where the company's head office will be located. This address must comply with municipal regulations and be approved by the relevant authorities. Virtual office providers often assist their clients with this approval process.

If your business is related to any specialized activity, you will also need to obtain approval from other licensing entities. This includes obtaining the necessary licenses from relevant government authorities, depending on your specific industry.

It is important to note that the process of registering your business name is just one part of the overall company formation process in Bahrain. The entire process can typically be completed within 20 to 45 business days, depending on the complexity of your business structure and the required licenses.

Securing an office address

When registering a business in Bahrain, you will need to provide a registered office address in the country. This can be a physical office space, a work desk in a shared workspace, or even a virtual office address.

The chosen address must comply with municipal regulations and be approved by the relevant authorities. Virtual office providers often handle the approval process for their clients. Consider factors like cost, scalability, and professional image when choosing an office address type.

Bahrain offers ideal office locations for your business. These include the Diplomatic Area, which is great for financial services companies, or the Seef Area, which is ideal for those in the tourism and leisure industry.

If you are out of Bahrain, you can make a Power of Attorney from your home country. If your country is a Hague Apostille Member, you will also need to get an apostille stamp from the foreign office.

As proof of address, you will need to provide shop pictures, a tenancy agreement copy, and an electricity bill copy. If your business is related to any specialised activity, approval from other licensing entities will also be required.

Drafting and notarizing legal documents

A crucial step in registering your business in Bahrain is drafting a Memorandum of Association (MOA). This document outlines your company's structure, including details like the company name, objectives, share capital, and management structure. It is a foundational document for your company. Consider consulting a business formation specialist to ensure it accurately reflects your business goals and complies with regulations.

Once drafted, the MOA needs to be notarized by the Ministry of Justice. The Ministry of Justice may require additional documents along with the MOA for notarization.

If you are present in Bahrain, you can make a Power of Attorney at a public or private notary. If you are outside of Bahrain, you can make a Power of Attorney from your home country. If your country is a Hague Apostille Member, you will also need to get an apostille stamp from the foreign office.

Foreign documents must be notarized and legalized, or notarized and apostilled.

Opening a corporate bank account

The Bahraini government requires established business units to hold a corporate bank account as per corporate law. The Central Bank of Bahrain (CBB) is the regulatory body in the nation. The process of opening a corporate bank account in Bahrain is straightforward. Here are the steps you need to follow:

• Select a Bank: Choose a bank that suits your business needs. The Kingdom of Bahrain has a strong global banking network, including 36 representative offices of overseas banks.
• Understand the Norms and Objectives: Familiarize yourself with the bank's norms and objectives. Understanding the requirements will make the process easier.
• Gather Required Documents: The list of essential documents includes identity proof, address proof of business shareholders and investors, a well-drafted business plan, and a company registration certificate. Foreign documents must be notarized and legalized or apostilled.
• Submit Documents and Initial Fee: Submit the required documents to the bank and deposit the initial fee. This step is mandatory and cannot be skipped.
• Carry Out Transactions: Once your bank account is opened, you can start making transactions.

It is important to note that you cannot begin business transactions until you have obtained the final license and regulatory approvals, which includes receiving approvals from regulators and licensing authorities and paying the necessary licensing fees and permits.

Additionally, if you are a company offering financial services, you must also obtain a license from the Central Bank of Bahrain, which typically takes 60 days.

Frequently asked questions