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Doing Business in Bahrain

Michael Decker
Michael Decker

As of 2020, Israelis now have the opportunity to start and run an Israeli business in Bahrain. The thriving economy of this principality has made Bahrain the financial center of the Persian Gulf. Many Israelis, however, have only scanty knowledge of Bahrain and its commercial potential. This article provides an explanation tax policy in Bahrain and the process required to register a company there.

Our law offices in Jerusalem and Tel Aviv, specialize in commercial and immigration law. The office provides its Israeli and international clients with a variety of legal services, including registering and setting up companies in Bahrain, in the United Arab Emirates, and in other locations throughout the world. We provide ongoing legal consultation to businesses and companies, representing them before tax authorities in Israel and abroad, and more.

The Economy in Bahrain – General Information

Israeli business in BahrainIn 2020 an important and historic event took place, in which peace agreements were signed for the first time between Israel and the Persian Gulf states. The United Arab Emirates appears to have captured most of themedia  attention, but Bahrain is also included in these agreements. It is worth noting that in the past few years, Bahrain has been considered one of the most important and central principalities in the Persian Gulf, due primarily to its highly developed economy. Its international ranking in terms of ease of doing business continues to rise each year. In 2020 the World Bank ranked Bahrain among the 10 countries in the world with the most positive change in their business climate.

One thing that has driven Bahrain’s success is that it has avoided relying solely on its petroleum reserves. Today the petroleum industry represents only 1/3 of Bahrain’s economy. Bahrain is home to many industries, such as the banking and financial sector, an advanced hi-tech industry, manufacturing (particularly of metals such as aluminum and iron), and more.

The tourist industry in Bahrain is also thriving. Millions of tourists visit the country every year, with most of them concentrated in the capital city Manama. Accordingly, the city is full of luxury hotels, fancy restaurants and tourist attractions, such as the Formula 1 racetrack, artificial islands, and large shopping centers.

Taxation in Bahrain

Like the United Arab Emirates, Bahrain has no income tax for individuals. Nor are companies taxed in most sectors, with company taxes levied only in specific sectors such as the energy sector (gas and petroleum). Bahrain has signed double taxation avoidance agreements (DTAAs) with many countries, including Britain and European Union member countries. As of this writing, Bahrain does not yet have a DTAA with Israel.

Registering a Company in Bahrain

The procedure for registering a company in Bahrain is quite rapid, generally within 1 to 5 business days. Registration of a company requires filling out an application and presenting a draft memorandum of association, as well as documents such as photocopies of the identity cards of the company representatives and the CVs of the stockholders. Among the services offered by our office, we assist clients in handling applications to set up businesses in Bahrain, as well as obtaining business licenses and long-term visas. Likewise, we provide ongoing consultation to ensure proper legal management of the business, including issues of international taxation, planning tax policy that conforms to legal requirements, etc.

Contact an attorney specializing in immigration law and setting up businesses in Bahrain

Above we presented a brief summary of the great potential offered to Israelis by the possibility of setting up a business in Bahrain. For a consultation and additional information on the subject, you can contact an attorney specializing in immigration and commercial law from our offices. Our offices assist Israeli and international clients to start businesses in Bahrain, in the United Arab Emirates, and in many other locations. This includes maintaining ongoing contact with the authorities and working together with relevant experts from these countries.

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