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Holding Company in Bahrain

Updated on Friday 05th July 2019

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Holding-Company-in-Bahrain.jpgThe holding company in Bahrain is incorporated for the purpose of owning shares in other companies either in Bahrain or abroad. It does not engage in commercial activities, it does not provide goods or services. The types of assets owned by a holding company can be shares in other corporations as well as private equity funds, hedge funds, bonds, real estate, patents, trademarks, as well as other valuable assets.
 
Investors who are interested in company formation in Bahrain for the purpose of incorporating a legal entity that will be used to own shares or assets should know that the business will be subject to the requirements set forth for the selected business form.
 
Our agents can help investors set up a company in Bahrain, either a public company or a limited liability company that will be used as a holding.
 

Types of holding companies

 
  • Closed joint-stock company: a company with at least two founders and a capital composed of shares that cannot be offered for public subscription.
  • Open joint-stock company: unlike the closed variant, the shares of this company can be publicly traded.
  • Limited liability company: a business with no more than 50 partners, each liable to the extent of their invested capital.
  • Single person company: the business is owned by a single individual who is responsible for all of the obligations that arise.
 
As seen from the list above, these business forms present different types of advantages and investors can set up a company in Bahrain based on the degree of liability that will be imposed on them after incorporation as well as by paying attention to other corporate characteristics. 
 
The joint-stock company and the limited liability company are often the two chosen business forms because of the limited liability of the shareholders. They are only liable up to the amount they invest in the company capital. Investors should know that for the joint-stock company the capital is larger, no less than 250,000 BD for the closed joint-stock, with 50% of this amount deposited initially. Investors then have the ability to pay the rest of the capital within no more than three years. For this company, the minimum value of a share is minimum of 100 fils and maximum 100 BD. 
 
In the case of the limited liability company, there is no minimum mandatory capital, however, the value of one share cannot be less than 50 BD.
 

Company formation in Bahrain

 
In order to open a company in Bahrain, investors must follow the following steps:
 
  1. Choose a business form: the first step is to choose a business form for the future holding company from one of those previously described.
  2. Choose a company name: one that is not already registered and one that does not violate public order, traditions or religious belief; the name cannot mock the activity carried out by the business.
  3. Company documents: the company’s Bylaws and Articles of Association are drafted and submitted for approval by the parties; they are later signed.
  4. Capital: a certificate of capital deposit must be obtained prior to moving further with the process.
  5. Registration: the application for registration can be submitted electronically; all of the documents, the Articles of Association and others, need to be attached.
  6. Others: as the holding company is not engaged in economic activities, it will not have to obtain special permits and licenses.
 
Once the commercial register certificate is issued electronically, a hard copy of the same document can also be obtained for a fee. The final step is for the registration of the company to be published in the Official Gazette or on the website of the Ministry of Industry, Commerce and Tourism.
 
Holding companies in Bahrain can be successfully used for managing and growing a number of commercial assets while maintaining diverse and active portfolios.  They can be used to hold shares in companies across a number of different business fields, such as real estate, financial services, tourism, healthcare, and others. Moreover, the holding can invest in companies that present an attractive growth potential.
 
Foreign direct investments have increasedin Bahrain, as seen below:
 
  • - foreign direct interments increased to 10,902 million BHD in 2018;
  • - in 2017 the value of the foreign direct investments was 10,333 BHD;
  • - in 2016 the value was 9,796 BHD.
 
Contact our agents who specialize in company registration in Bahrain for complete details on the steps needed to open a holding company as well as details about the holding company regime. Our agents can provide complete incorporation assistance regarding the type of company or the business field in which it activates.

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