Bahrain is one of the most attractive places to do business in the Middle East. Tax benefits and simple company registration make the country attractive for entrepreneurs. But before starting a business, it is important to understand all the costs that await you, as well as what benefits you can get from working in this country.
The main costs of registering a company
Opening a company in Bahrain involves certain costs that must be taken into account at the initial stage. These include:
- Registration fees. Depending on the type of company and the chosen business sector, registration fees may vary. The average cost of registration is about $1,000, but for some types of activities this figure may be higher.
- Legal and administrative expenses. To register a company, you often need the help of a lawyer or consultant who will help you properly prepare all the documents. The cost of such services can range from $500 to $2,000.
- Office rental. By law, the company must have a physical address in Bahrain. The minimum cost of renting a small office starts at $300 per month.
- Payment for the license. To conduct certain types of business, you need to obtain a special license. Its cost can range from $500 to $2,000 per year.
It is also important to remember that Bahrain company formation cost depends on many factors, including the type of company and its size. Therefore, before starting the process, it is worth examining in detail all possible costs.
Tax benefits and advantages
One of the main reasons why entrepreneurs choose Bahrain to do business is favorable tax conditions. The main tax benefits include:
- No income tax. Bahrain has no corporate income tax, which makes the country particularly attractive for high-yield companies.
- No VAT for certain sectors. Many companies operating in areas not related to the sale of goods and services on the local market are exempt from paying value added tax.
- Free economic zones. There are special zones in the country where companies can receive additional tax benefits and preferential conditions for renting premises.
Thus, registering a company in Bahrain can be beneficial in terms of taxes and business costs.
Additional expenses and obligations
In addition to basic expenses, entrepreneurs should take into account additional expenses that may arise in the process of doing business:
- Remuneration of employees. The minimum wage in Bahrain has not been set, but on average it is about $400-500 per month for unskilled workers.
- Social contributions. Companies are required to pay social contributions for their employees. On average, this is about 20% of the salary.
- Updating licenses and permissions. Annual updating of all necessary documents also requires additional costs.
It is important to take these costs into account when planning the company’s budget.
Important aspects for entrepreneurs
Before registering a company in Bahrain, you should pay attention to several key points:
- Choosing the type of company. Various forms of companies are available in Bahrain, such as a limited liability company (WLL) or a joint venture. The number of founders, the amount of capital and the degree of responsibility depend on the choice of the type of company.
- Obtaining licenses. Some activities require special licenses and permits. For example, if you plan to engage in financial services or trade, you will need additional permission from the Central Bank of Bahrain.
- Rules for working with foreigners. It is important to remember that there are certain restrictions on the employment of foreigners in Bahrain. In order to hire foreign workers, a company must meet a number of requirements and obtain an appropriate permit.
These and other points are worth considering before starting a business in Bahrain.
Bahrain is a great place to do business due to its tax benefits and the ease of registering a company. Despite certain expenses, the country offers entrepreneurs many advantages, such as the absence of income tax and access to free economic zones.
