Foreign companies looking to establish their regional headquarters can open a branch in Bahrain. This is a business form that is best suited for companies in fields such as financial services but it can also be used to establish the presence of a company in a different business field.
The Bahrain branch will be under the control of the foreign company and the legal entity abroad will be the one liable for the activities and debts of its Bahrain regional office.
One of our agents who specialize in company formation in Bahrain
can assist foreign companies that wish to secure their presence on the market. A branch is a form of establishing a business presence that has somewhat lighter requirements compared to the subsidiary, for example. However, investors will still be required to comply with the existing registration and licensing obligations.
The advantages of the branch in Bahrain
The branch can be the most suitable means of entering the market in Bahrain for many foreign companies. While the parent company will need to remain liable for its Bahraini counterpart, it does have certain advantages that can be particularly interesting for companies in the financial services, for example. For example, this is a means of operation for foreign bank branches.
The advantages of the branch are the following:
Complete foreign ownership: the company abroad retains full foreign ownership for its branch in Bahrain.
No capital requirements: there is no mandatory requirement for a minimum share capital when opening a branch in Bahrain.
Permitted activities: provided that it has adequate permits, the branch can engage in a large number of activities.
Easy setup: the requirements for opening a branch in Bahrain are not complicated and can be easily handled by foreign investors.
Location advantages: a branch in Bahrain can be used as a springboard to expand the business operations in other countries.
Companies in fields such as banking and financial services, insurance companies, investment activities, manufacturing, automotive and others, can use branches successfully in order to establish their presence in Bahrain.
The requirements for opening a branch in Bahrain in 2021
If setting up a branch in Bahrain in 2021, it is important to keep in mind that these business entities will need to function as per the local regulations and this includes having the right permits and licenses for some types of activities.
Below, our team of agents who specialize in company registration in Bahrain
list the most important requirements for those willing to set up a foreign branch:
- Liability: the parent company is the one liable for the activities of the branch and the liabilities it may incur while performing the operations.
- Guarantee: when opening a branch, the parent company is required to issue a guarantee to the Ministry of Finance.
- Local office: it is mandatory for the foreign branch to maintain a local presence in Bahrain (have a local office).
- Sponsor: the branch will need a sponsor who can be a natural or a legal person.
- Manager: the local branch in Bahrain will also need a manager who will be Bahraini; exemptions apply in some cases.
- Licenses: for branches in some business fields, applying for a proper permit or license is required before they can commence business.
When opening a branch, a registration form will need to be filled in and accompanied by the parent company’s registration documents. The capital deposit certificate, as well as the sponsorship agreement signed by the Bahraini individual or company, will also be required.
The name of the branch needs to be a unique one in Bahrain. In most cases, it will be the same name as that of the foreign company abroad, however, one of our agents can help investors perform a name check. The documents for registering the branch are submitted to the Ministry of Commerce, at the Bahrain Investment Centre and are subject to preliminary approval. A bank account for the branch of the foreign company will also be required. Once the branch has obtained the certificate of registration, it can public the incorporation in the official gazette and then register for social insurance purposes for being able to hire employees.
Foreign companies looking to set up a company in Bahrain can choose to open a branch and maintain their presence in the country through this regional headquarters. Other options include opening a subsidiary which is a locally registered company for which the foreign parent company will not be liable.
Business expansion through a branch office in Bahrain in 2021
Expanding a company's operations through a Bahrain branch office in 2021 represents one of the most modern ways of creating a satellite company. Apart from having access to the country's network of double tax treaties, the branch office will be subject to income tax on the profits it makes here.
Foreign business owners considering setting up a branch in Bahrain in 2021 can rely on the services provided by our local agents. We can also provide details on the licensing requirements such an entity must respect.
our team who specializes in company registration in Bahrain
for more information about opening a branch or for details about the other available options.