Expanding your company across borders and into Bahrain can make a big difference in your bottom line, but you also need to understand how to set up your Bahrain subsidiary successfully, including Bahrain subsidiary laws. Globalization Partners offers a better alternative with our Bahrain subsidiary outsourcing services. We’ll use our established Bahrain subsidiary to hire employees who work on your behalf, run your payroll, and ensure you stay compliant through every step of the process.
How to Set Up a Bahrain Subsidiary
Before you start to set up a Bahrain subsidiary, you need to consider certain factors, such as the location of your subsidiary and the type of entity you want to incorporate as. Certain regions can operate under separate laws and regulations, and they can also have cultural factors that make it difficult to expand. You should research the best physical location for your office at the start of the Bahrain subsidiary setup process to ensure that you make the right decision.
There are nine different types of company entities you can choose from in Bahrain, including a Bahraini shareholding company (B.S.C), closed shareholding company (B.S.C), partnership company, foreign company branch, limited liability company (LLC), simple commandite, and more. The most common subsidiary structure is an LLC that can protect both the subsidiary and the parent company from liability.
The process to set up a Bahrain subsidiary changes based on what type of entity you choose, but the common steps include:
- Selecting a company name that’s available and does not violate public order
- Applying for registration by filing prepared company documents and required forms
- Completing the registration by receiving a commercial registration certificate
- Opening a bank account
- Leasing the necessary office space
- Hiring employees to work for your company
You can register your company at the Bahrain Investors’ Center, which typically takes one to two working days. You’ll have to renew your company’s registration every year. Depending on the commercial activity, you may need a license or other approval.
Bahrain Subsidiary Laws
According to Bahrain subsidiary laws, certain industries are prohibited, and others are protected for investment by citizens of Bahrain. Gambling and the import and industrial use of restricted chemicals are both prohibited industries. Protected industries and jobs include printing presses, accounting services, the sale of racing car fuel, and more.
You also have to make payments to employees and authorities in Bahrain from an in-country bank account. Hours and opening days can vary from bank branch to branch, but they’re generally open Saturday to Wednesday or Sunday to Thursday. If this step is not required as part of the Bahrain subsidiary setup process, you must establish bank accounts before starting payroll.
To incorporate as an LLC, you will need:
- Minimum paid-up capital of at least $2,660
- Two directors
- Two shareholders of any nationality
- One manager who lives in Bahrain
Additionally, LLCs are sometimes subject to Bahraini local shareholding joint venture requirements, depending on their sector. Companies also have to meet certain tax laws, such as submitting yearly tax returns and audited financial statements.
Benefits of Setting Up a Bahrain Subsidiary
The biggest benefit of the Bahrain subsidiary setup process is that you can start operating in the country. If you incorporate as an LLC, both the parent company and the subsidiary can operate somewhat independently. The parent company will not be held liable for the subsidiary’s actions, and the subsidiary will be free to establish a company culture and environment that works for Bahrain.
You can gain even more benefits through Bahrain subsidiary outsourcing with Globalization Partners. Instead of learning Bahrain’s subsidiary laws, spending time and money to set up a subsidiary and waiting to start working, you can take advantage of the fact that Globalization Partners simplifies the process. We’ll use our established subsidiary to make sure you’re compliant, and you can begin work in a few days.
Other Important Considerations
If you decide to set up your Bahrain subsidiary alone, you need to set aside the right amount of money to incorporate. Many parts of the process include a fee, so you need to make sure your company is financially ready for the lengthy process. You should also budget your time or designate another company executive to travel back and forth to Bahrain while you establish a subsidiary.
Let Globalization Partners Help With Your Expansion
Globalization Partners is the partner you need for a successful Bahrain expansion. Contact us today to learn more.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.