A Guide To Launching An Spc Company In Bahrain

Bahrain is an attractive prospect for global investors due to its business-friendly environment, 100% foreign ownership, and streamlined registration process. The country's most common form of company registration is the Single Person Company (SPC), which offers limited liability and complete foreign ownership. SPCs in Bahrain are exempt from all taxes, including income tax, corporation tax, and capital gains tax. The registration process can be completed in as little as two weeks, making it an efficient option for those looking to establish a presence in the Middle East.

Choosing a company name

• Uniqueness and Availability: The chosen company name must be unique and distinct from any other legal entity's name in Bahrain. It is essential to conduct a thorough search to ensure that your desired name is not already in use by another business. You can submit your proposed name to the Ministry of Industry, Commerce, and Tourism (MOICT) for availability checks and approval.
• Compliance with Naming Conventions: Bahrain has specific naming conventions that your company name should adhere to. The name must end with the words "Single Person Company" or its abbreviation "SPC". It is important to familiarize yourself with the naming regulations to ensure your chosen name complies with these standards.
• Trademark Considerations: In addition to uniqueness, you should also conduct a separate trademark search to avoid potential conflicts with existing trademarks. This proactive step can help prevent legal issues and ensure that your company name does not infringe on the rights of other businesses.
• Reservation of Name: Once you have selected an available and compliant name, you can reserve it with the Companies Register. This step ensures that your chosen name remains available during the registration process and prevents other entities from using it.
• Cultural Sensitivity: When choosing a company name in Bahrain, it is important to be mindful of cultural sensitivities and local customs. Ensure that your company name is respectful and does not contain any words or phrases that may be considered offensive or inappropriate in the local context.
• Online Presence: Consider the availability of domain names and social media handles that align with your chosen company name. In today's digital world, establishing an online presence is crucial for most businesses. Check if you can secure a website domain and social media profiles that match or closely relate to your company name.
• Translation and Pronunciation: If your company name includes words from a language other than Arabic or English, ensure that they are translated accurately and can be easily pronounced by your target audience. This is especially important for connecting with local customers and ensuring smooth communication.

By following these guidelines, you can choose a company name that is unique, compliant, and culturally sensitive. Remember to conduct thorough research and seek approval from the relevant authorities to ensure a smooth registration process for your SPC in Bahrain.

Application form and documents

To apply for a Single Person Company (SPC) in Bahrain, you will need to submit an application form and a variety of supporting documents to the Ministry of Industry, Commerce and Tourism (MOICT). Here is a detailed list of the required documents:

• Application form: This form should include all relevant personal and professional details, such as the type of business operation, the nationality of the investor, proof of capital, and educational qualifications of the investor.
• Articles of Association (AOA): The AOA is the main governing document for an SPC and must be prepared, accepted, and signed by a notary. A copy of the AOA must be submitted online.
• Draft Memorandum of Association (MOA): This document outlines the company's structure, including the company name, objectives, share capital, and management structure. It must be drafted and notarized by the Ministry of Justice.
• Capital Deposit Certificate: This certificate is obtained after depositing the minimum required capital for your chosen business structure into a corporate bank account.
• Appointment letter from an external auditor: An SPC is required to have an external auditor.
• Original Declaration of a Single Person Company: This document confirms that the company will be owned and controlled by a single person.
• Copy of the applicant's educational qualifications: Provide proof of educational qualifications, especially if the type of business requires specific qualifications.
• Proposed registered local office address: Provide a copy of a signed office lease agreement, if available.
• Copy of Bahraini ID or passport: Submit a copy of the founder's Bahraini ID if they are a citizen. If the founder is a non-Bahraini citizen, provide a copy of their passport and visa pages.
• Copy of Director's ID or passport: If the director is different from the founder and is a Bahraini citizen, provide a copy of their Bahraini ID. If they are a non-citizen, provide a copy of their passport and visa pages.
• Copy of Authorized Signatory's ID or passport: If the authorized signatory is different from the founder or director and is a Bahraini citizen, provide a copy of their Bahraini ID. Otherwise, provide a copy of their passport.
• Original notarized power of attorney: Submit an original power of attorney document signed by the representative of the applicant.
• Copy of Resolution by the Board of Directors: Provide a copy of the resolution authorizing the formation of the SPC and the appointment of the director and authorized signatory. This can be done by the founder as the sole board member.

It is important to note that the specific requirements and documents needed may vary depending on the chosen business structure and other factors. It is recommended to consult with a business formation specialist or advisor to ensure compliance with all regulations and a smooth application process.

Articles of Association

The Articles of Association (AOA) is a crucial document for registering a Single Person Company (SPC) in Bahrain. It outlines the rules and regulations that govern the company's operations within the country. Here are some detailed instructions and considerations for drafting the AOA:

• Understanding the Purpose: The AOA establishes the internal regulations that govern the management and operations of the SPC. It defines the rights and responsibilities of the company, shareholders, directors, and other stakeholders.
• Contents of the AOA: While the specific content may vary depending on the nature of the business, there are standard clauses that are typically included in the AOA. These may include:

• Company name and registered address.
• Business objectives and activities.
• Share capital structure, including the number and types of shares.
• Shareholder rights and obligations, such as voting rights and dividend distribution.
• Director appointment and removal procedures, as well as their powers and duties.
• Meeting procedures, including the frequency and quorum requirements for general meetings.
• Financial provisions, such as accounting practices and audit requirements.
• Procedures for amending the AOA and handling disputes.

• Drafting the AOA: When drafting the AOA, it is essential to seek legal advice to ensure compliance with Bahrain's Companies Commercial Law and other relevant regulations. The document should be tailored to the specific needs and nature of the SPC.
• Approval and Submission: Once the AOA is drafted, it must be submitted to the Ministry of Industry, Commerce, and Tourism (MOICT) for approval. The ministry will review the document to ensure it complies with the legal framework. After receiving approval from the ministry, the AOA must be signed by a notary, and a copy should be submitted online to the MOICT.
• Amending the AOA: It is important to note that the AOA is not a static document. As the business evolves, amendments may be necessary. Any changes to the AOA typically follow a similar process as the initial submission, requiring approval from the MOICT and notarization.
• Role of the AOA in Limited Liability: The AOA plays a crucial role in establishing the limited liability nature of the SPC. By clearly outlining the capital structure and shareholder obligations, the AOA ensures that the shareholder's liability is limited to their capital contribution.
• Relationship with Memorandum of Association (MOA): The AOA should be drafted in conjunction with the MOA, which is another essential document in company formation. While the MOA outlines the company's relationship with external parties, the AOA focuses on the internal regulations and governance.

In conclusion, the Articles of Association is a comprehensive document that forms the foundation for operating an SPC in Bahrain. It ensures regulatory compliance, defines shareholder and director rights and responsibilities, and establishes the company's internal governance structure.

Commercial registration

To obtain commercial registration for your Single Person Company (SPC) in Bahrain, you must meet the following criteria:

• Be at least 18 years old (some commercial activities require a minimum age of 21)
• Be dedicated to your business (applicants employed in the private sector must provide a "No Objection" certificate from their current employer)
• Have no criminal record
• Have a valid passport with at least two years of remaining validity, if you are a non-Bahraini citizen

In addition to meeting these criteria, you must submit the following documents to the Ministry of Industry, Commerce, and Tourism (MOICT) for SPC registration:

• Application form for registering the company
• Draft copy of Memorandum and Articles of Association
• Capital Deposit Certificate (after pre-approval)
• Appointment letter from an external auditor
• Copy of Bahraini ID of the investor and director (if citizens) or passport copies (if non-citizens)
• Copy of the company's Commercial Registration
• Board of Directors resolution for the establishment of the SPC
• Copy of the applicant's educational qualifications
• Proposed commercial address under which the business will operate

The Articles of Association (AOA) is the main document governing the rules and regulations of your SPC's operations in Bahrain. It must be prepared, accepted by the Ministry, signed by a notary, and submitted online.

The entire application process for registering an SPC in Bahrain can take up to two weeks to complete.

Minimum requirements

To open an SPC company in Bahrain, there are several minimum requirements that must be met. Here are the key points to consider:

• Age and Criminal Record: The applicant must be at least 18 years old (some business activities may require a minimum age of 21) and must not have any criminal record. It is important to ensure you meet these basic eligibility criteria before proceeding.
• Shareholder and Director: There must be a minimum of one shareholder and one director. The shareholder can be the sole director, and both can be citizens of other countries, residing anywhere in the world.
• Capital Requirement: A minimum capital of BHD 50,000 is typically required. However, the amount may vary depending on the nature of the business activity, with some sources stating a lower amount of BD1,000. It is essential to check the specific requirements for your chosen business type.
• Local Presence: A local office presence is mandatory. You will need to secure a registered office address in Bahrain, which can be a physical office space, a shared workspace, or even a virtual office address.
• Company Name: Choose a unique company name that is not similar to any other legal entity in Bahrain. The name must end with "Single Person Company" or its abbreviation, "SPC."
• Documents: Prepare the necessary documents, including the application form, draft Memorandum of Association, Articles of Association, Capital Deposit Certificate, appointment letter from an external auditor, copies of identification documents, and any other specific requirements based on your business activity.
• Registration: Submit your application and documents to the Ministry of Industry, Commerce, and Tourism (MOICT) for processing. The registration process typically takes up to two weeks to complete.
• Audited Financial Statements: Annual submission of audited financial statements to the MOICT is compulsory. Ensure you engage the services of an external auditor to prepare these statements.

It is important to note that these are the minimum requirements, and there may be additional considerations depending on the nature of your business and the specific regulations in Bahrain. It is always recommended to consult with a business formation specialist or advisor to ensure compliance with all applicable laws and regulations.

Frequently asked questions