Guidelines for setting up a business in Bahrain, Commercial Registration | Servcorp

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Guidelines for setting up a business in Bahrain

May 2013 | Servcorp

Step 1: Selection of Business Activity

The Kingdom of Bahrain welcomes and promotes investment in most business sectors without restriction. Foreign investment and 100% foreign ownership is also permitted in general, with a limited number of business activities that are reserved by law for Bahraini and GCC citizens and companies only.

Certain business activities, however, are prohibited due to their adverse economic, social or environmental impact. Following is a list of prohibited or restricted business activities in Bahrain.

Business Activities Prohibited in Bahrain:

  • Gambling
  • Alcoholic drinks manufacturing
  • Narcotics manufacturing
  • Weapons manufacturing
  • Import of all types of waste and treatment, storage and dumping of radioactive materials and toxic waste in Bahrain
  • Import, manufacturing and dealing of Asbestos and its by-products (not including Asbestos removal)
  • Import and industrial use of restricted chemicals
  • Pearl farming
  • Cigarette Manufacturing
  • Import of automatic cigarette vending machines
  • Letter post (exclusive to Bahrain Post)

Business Activities Allowed Only for Bahraini Citizens and Companies:

  • Real estate services and rental and management of land and buildings (not including buying and selling of real property, or management and development of private property)
  • Press, publication and distribution house (daily, non-daily, and specialized newspapers and magazines)
  • Printing press
  • Cinema, Television, Radio and Theatre Production and Distribution
  • Cinematic Filming Studio
  • Management and operation of cinemas and film distribution
  • Cinema halls
  • Goods land transport
  • Passenger land transport
  • Tourist land transport
  • Domestic sea cruises
  • Driving instruction
  • Motorcycle rental
  • Car rental
  • Call taxi
  • Petroleum products supply (gas stations)
  • Gas bottling and distribution
  • Cooker refilling and repairing
  • Gas cylinder distribution
  • Handing and processing formalities with Government departments and authorities
  • Hajj and Umra services
  • Foreign manpower supply
  • Commercial agencies
  • Small business activities

Business Activities Allowed Only for Bahraini and GCC Citizens and Companies:

  • Book-keeping and accounting services (not including auditing)
  • Import, export and sale of racing car fuel
  • Cargo clearing
  • Fishing

Other Restrictions

  • Trade (including sale, purchase, import and export): For companies, a minimum of 51% Bahraini/ American/ GCC ownership is required.
  • Travel and Tourism Offices: A Bahraini partner is required.
  • Medical Clinics and Centres: Licensing is confined to Bahraini or GCC citizens resident in Bahrain with medical qualifications (excluding hospitals).
  • Pharmacies: a minimum of 50% of the company's capital must be owned by a Bahraini pharmacist.

Step 2: Selection of Legal Structure

-       Partnership Company

-       Commandite by Shares

-       Bahrain Shareholding Company – Closed

-       With Limited Liability Company

-       Individual Establishment

-       Bahrain Shareholding Company – Public

-       Foreign Company Branch

Step 3: Selection of Company Name

The Ministry of Industry & Commerce (MOIC) provides the following guidelines for the selection of a company name.

Guidelines for Selection of a Company Name

An investor is required to propose four alternative company names, to be verified by the MOIC's Investor Relations Division. Names that violate the below guidelines will be rejected. In the case that all four names are disqualified, the investor will be requested to submit new alternative names.

  • The selected name shall not be registered in the name of third parties at the Ministry of Industry & Commerce
  • It shall not imply any violation of public morals, customs, traditions or religious beliefs
  • It shall not denote any activity contradicting the activity carried out by the business
  • It shall not be similar to famous brand names
  • It shall not be similar to another commercial name registered at the Ministry
  • It shall not be a name that is already registered at the Directorate of Industrial Property (except by special permission)
  • It shall be in conformity with the phrase indicating the legal form of the institution or company, which bears the name
  • It shall not be composed, in whole or in part, of some expressions or names of political connotations or that are related to the regime of any country, such as royalty or constitution
  • The phrases: insurance, re-insurance, investment, bank and derivatives thereof may not be used unless a prior authorisation from the concerned authority is obtained, provided that the company's activity is consistent with the company's name
  • Approval shall be obtained from official authorities of the commercial name of businesses undertaking certain activities within the jurisdiction of such authorities
  • A branch of a foreign company or a representative office must have a commercial name that is identical to the name of the original company, followed by the phrase 'a branch of a foreign company/representative office'

Step 4: Application for Commercial Registration

Commercial registration applications can be made at the Bahrain Investors Centre (For Companies) and the Ministry of Industry and Commerce Commercial Registration Directorate (For Individual Establishments).

All application forms are available at www.moic.gov.bh

Step 5: Activity Licensing and Approval: What's Your Business?

Commercial registration, issued by the Ministry of Industry & Commerce, is sufficient to start most business activities in Bahrain. Some business activities, however, require a license or approval by one or more Government Authorities prior to obtaining the commercial registration. In such cases, the Ministry of Industry & Commerce may only grant a CR when the investor meets all licensing and approval requirements set forth by the relevant authorities.