Doing business in Bahrain

Bahrain's legal system is based on civil law with Sharia as a principal source of legislation. The Ministry of Industry and Commerce registers companies, the National Bureau for Revenue administers VAT and excise tax, the Central Bank of Bahrain is the single financial regulator, the Labour Market Regulatory Authority issues work permits and the Economic Development Board promotes investment. Bahrain is a member of the GCC customs union.

Key facts

Corporate income tax

None generally; 46% on oil and gas; 15% DMTT for large MNE groups from 2025; 10% tax proposed from 2027

VAT

10% standard since 1 January 2022

Foreign ownership

Up to 100% depending on activity; certain activities banned

Main entity form

Limited liability company

New York Convention

Party

Withholding tax

None on dividends, interest or royalties

Bahrain allows GCC citizens and foreigners to own up to 100% of most company forms, depending on the activity, with certain activities banned. Companies are registered with the Ministry of Industry and Commerce through the Sijilat online platform. The limited liability company is the usual vehicle, and joint stock companies and foreign branches are also available.

Key facts

• Up to 100% foreign ownership is possible in most company forms depending on the activity, but check the activity code, since certain activities are banned to foreign owners.

• The limited liability company is the usual vehicle; joint stock companies, holding companies and branches of foreign companies are also available, with set minimum capital for joint stock companies.

• Registration runs online through Sijilat, and activities needing prior approval are referred to the relevant licensing authority.

Who handles this in BahrainCorporate & Entity ServicesLegal & ContractingRisk, Compliance & Financial Integrity

Bahrain levies no general corporate income tax, but oil and gas companies are taxed at 46% and a 15% domestic minimum top-up tax applies to large multinational groups from 2025. A 10% corporate tax on larger companies was endorsed by the government in December 2025 but still needed legislative approval when checked. VAT applies at a standard rate of 10%, and there are no withholding taxes on dividends, interest or royalties.

Key facts

• There is no general corporate income tax, but oil and gas companies are taxed at 46% and large multinational groups face a 15% minimum top-up tax from 2025; a proposed 10% corporate tax, expected from 2027, should be tracked.

• VAT is 10% as standard since 2022 and is administered by the National Bureau for Revenue.

• No withholding tax applies to outbound dividends, interest or royalties.

• Joint stock companies file audited financial statements with the Ministry of Industry and Commerce; limited liability companies file audited statements or an auditor's letter of good standing.

Who handles this in BahrainTax & International StructuringAccounting, Reporting & Statutory ComplianceAudit & Assurance

Statements not yet checked against a source are marked AI-written. Confirm anything you plan to rely on with a qualified local professional.

1 statement on rates, thresholds or deadlines is held back until it is checked against an official source.

Key facts

• Foreign staff need LMRA work permits; employers must meet a Bahrainisation ratio or pay the optional parallel fee for extra permits.

• Social insurance contributions are 26% of pay for Bahraini employees and 4% for expatriates, split between employer and employee.

• The 2012 Labour Law sets minimum terms, including at least 30 calendar days' annual leave.

Who handles this in BahrainEmployment, Payroll & MobilityLegal & Contracting

This topic was written by AI from general knowledge and is being checked against official sources. Confirm anything you plan to rely on with a qualified local professional.

The Central Bank of Bahrain is a single regulator for banking, insurance, investment business and capital markets. Foreign nationals may own property in designated areas.

Key facts

• All financial services, including insurance and capital markets, are licensed by the Central Bank of Bahrain, which also runs a fintech sandbox.

  AI-written

• The Economic Development Board supports foreign investors with entry.

  AI-written

• Foreigners may own freehold property in designated areas.

  AI-written

• Public contracts are tendered under Tender Board oversight.

  AI-written

Who handles this in BahrainGovernment & Regulatory AffairsCommercial Intelligence & Market Research

This topic was written by AI from general knowledge and is being checked against official sources. Confirm anything you plan to rely on with a qualified local professional.

2 statements on rates, thresholds or deadlines are held back until they are checked against an official source.

The Bahraini dinar is pegged to the US dollar and there are no exchange controls, so capital and profits move freely. Bahrain is a regional banking centre regulated by the Central Bank of Bahrain. Banks apply full know-your-customer checks under anti-money laundering law.

Key facts

• No exchange controls apply, so dividends and capital can be sent abroad freely.

  AI-written

• Expect detailed beneficial ownership checks at account opening.

  AI-written

Who handles this in BahrainBanking & Capital AccessPayments, Foreign Exchange & SettlementRisk, Compliance & Financial Integrity

Statements not yet checked against a source are marked AI-written. Confirm anything you plan to rely on with a qualified local professional.

Bahrain is a WTO member and part of the GCC customs union. It has a bilateral free trade agreement with the United States, in addition to GCC agreements. Importers need a commercial registration covering import activity.

Key facts

• Most imports bear customs duty of 5% of CIF value, with higher rates for alcohol, cigarettes and certain other goods.

• Goods of US origin can benefit from the bilateral free trade agreement in force since 2006.

• GCC agreements with EFTA and Singapore extend further preferences.

  AI-written

• Import activity must be covered by the commercial registration.

  AI-written

Who handles this in BahrainTrade, Customs & Supply ChainRisk, Compliance & Financial Integrity

This topic was written by AI from general knowledge and is being checked against official sources. Confirm anything you plan to rely on with a qualified local professional.

4 statements on rates, thresholds or deadlines are held back until they are checked against an official source.

Who handles this in BahrainTechnology, Data & CyberLegal & Contracting

Statements not yet checked against a source are marked AI-written. Confirm anything you plan to rely on with a qualified local professional.

Trade marks, patents and designs are registered with the industrial property office of the Ministry of Industry and Commerce. Bahrain is a member of the Madrid Protocol, the Patent Cooperation Treaty and the Paris and Berne Conventions, so international filing routes are available.

Key facts

• Trade marks can be filed nationally or by designating Bahrain in a Madrid application.

  AI-written

• Patents are obtained nationally or through the PCT, since the GCC Patent Office no longer accepts filings.

  AI-written

• TRIPS standards apply through WTO membership.

Who handles this in BahrainIntellectual Property & Brand ProtectionLegal & Contracting

This topic was written by AI from general knowledge and is being checked against official sources. Confirm anything you plan to rely on with a qualified local professional.

Takeovers of listed companies are regulated by the Central Bank of Bahrain. A 2018 bankruptcy law introduced a reorganisation procedure modelled on debtor-in-possession restructuring.

Key facts

• Deals meeting the competition law criteria must be notified before completion.

  AI-written

• Listed company takeovers fall under Central Bank of Bahrain rules.

  AI-written

• Distressed businesses can use a court-supervised reorganisation under the 2018 law.

  AI-written

Who handles this in BahrainTransactions & DealsGovernment & Regulatory AffairsLegal & Contracting

This topic was written by AI from general knowledge and is being checked against official sources. Confirm anything you plan to rely on with a qualified local professional.

1 statement on rates, thresholds or deadlines is held back until it is checked against an official source.

Bribery is a criminal offence under the Penal Code and Bahrain is a party to the UN Convention against Corruption. Anti-money laundering law applies to financial institutions and designated businesses, with reports to a financial intelligence unit. Listed companies and financial institutions follow corporate governance codes.

Key facts

• Bribery of public officials is a crime and Bahrain is party to the UN Convention against Corruption.

  AI-written

• Designated businesses must report suspicious transactions, and Bahrain is assessed through MENAFATF.

  AI-written

Who handles this in BahrainRisk, Compliance & Financial IntegrityInsurance & Risk Transfer

Statements not yet checked against a source are marked AI-written. Confirm anything you plan to rely on with a qualified local professional.

Bahrain has a civil court system with a Court of Cassation at its apex, and the Bahrain Chamber for Dispute Resolution, which hears larger commercial and financial disputes. Its 2015 arbitration legislation follows the UNCITRAL Model Law, and Bahrain is a party to the New York Convention for awards made in other contracting states.

Key facts

• Larger financial and international commercial disputes may fall to the Bahrain Chamber for Dispute Resolution rather than the ordinary courts.

  AI-written

• Ordinary court proceedings are in Arabic, with a three-tier structure up to the Court of Cassation.

  AI-written

• Arbitration law follows the UNCITRAL Model Law as amended in 2006, and foreign awards from other contracting states are enforceable under the New York Convention.

Who handles this in BahrainDisputes & ResolutionLegal & Contracting