Citizens of Bahrain can become general partners of a partnership, who cooperate together under a common name and have unlimited liability for the obligations of a partnership.
This type of company is not popular in Bahrain, and a Limited Liability Company is often chosen for incorporation rather than a Limited Partnership.
Association in Participation
This type of structure is generally formed for realizing specific projects.
Joint Stock Company
All the members of this type of company must be citizens of Bahrain, and this is usually a public company which undertakes banking or insurance business.
Closed Joint Stock Company
Foreigners can be shareholders of this type of company.
Limited Liability Company
It is a widely used type of company in Bahrain. If a company participates in manufacturing or services market segment, it may be fully owned by foreign persons. However, the government permission must be obtained, as otherwise foreign ownership may constitute only 49% of a company’s shares.
This type of a business structure is fully owned by one person, who can appoint a company’s administrator or administer it on his own. Due to unlimited liability, this type of company is not popular among entrepreneurs.
As there are no withholding taxes and other fiscal advantages, Bahrain is an attractive jurisdiction to incorporate a holding company in.
Branch of a Foreign Company
International companies are allowed to have 100% ownership of companies operating in tourism, healthcare, education and training, technology, several manufacturing and business consultancy sectors. A company may establish its branch in Bahrain upon receipt of the government permission.
Individuals are not liable to pay income tax. There are no withholding or capital gains taxes, as well as no exchange controls. Social security contributions are payable.
Companies are not liable to pay corporation tax if they do not operate in the market segment related to oil exploring and refining. Property tax is levied at different rates.
Import duties, customs duties and excise duties are levied at different rates on various goods and services. The use of free zones of Bahrain may limit or avoid payment of these taxes.