Starting a Small Business in Bahrain 2025 – A Complete Guideline

Do you want to start a tax-friendly corporate business in the Middle East? Bahrain offers perfect opportunities for startups and entrepreneurs.

Bahrain’s retail market was worth $5.8 billion in 2019 and is expected to grow by 15.62% annually, reaching $10 billion by 2025.

Below, we will guide you through the whole process of starting a small business in Bahrain without any extra hassle. 

Let’s get started! 

Why Start a Business in Bahrain?

Bahrain is an attractive place for small businesses and startups because of its ever-growing economy! The country has experienced positive GDP, and will experience great growth throughout the year of 2025 as well. 

There are several reasons why Bahrain, along with it’s business are thriving, 

• In some countries’ sectors, Bahrain allows 100% foreign ownership in most sectors.
• Zero income tax for corporate business structure
• Easy access to the Persian Gulf market.
• Business-friendly environment
• Low business operation cost
• Popular business sectors include financial services, ICT, tourism, and logistics.
• The focus on digital transformation and sustainability attracts innovation.
• A strong legal framework that protects investor rights.
• Support from the government for local and international businesses.

4 Types of Companies in Bahrain

You will see different types of companies in Bahrain, but the companies below have the highest priority. 

i. Bahraini Shareholding Company

It’s the average shareholding company, working especially in Bahrain. 

Its capital is divided into individual shares making it suitable for large-scale businesses, further classified into a Public Shareholding Company (BSC-P) or a Closed Shareholding Company (BSC-C). 

A Public Shareholding Company will hold all public shares and offer at least 50% of the capital to the public.

ii. Limited Liability Company (LLC)

For having an extended amount of business, Limited Liability Companies are a popular business structure in Bahrain. 

They offer damage protection to its owner, so that their personal assets remain safe and secure from the company’s liabilities. 

iii. Partnership

In a Partnership business structure, two or more individuals who agree to share profits, liabilities, and responsibilities within each other. Bahrain has 2 core types of partnership business models, 

• General Partnership. 
• And, Limited Partnership.

iv. Sole Proprietorship or Single-Person Company

This is the basic form of any business and individuals can start a business in Bahrain through business startup agencies. 

You will have full control over your company, but you will be held liable for all debts and obligations your business may receive. 

Beside these businesses, you can choose from Financial Services, ICT, Manufacturing, Logistics, and Tourism. 

6 Important Bahrain Ministry Websites

Similar to other middle eastern companies such as UAE and KSA, Bahrain offers a complex business setup process. 

You will need to visit multiple government portals to secure a business spot in Bahrain, so we noted some below. 

Responsible Authority	Purpose
Ministry of Industry and Commerce (MOIC)	Its sole purpose is to provide information for business, trade, and industrial activities in Bahrain.
Ministry of Justice (MOJ)	The Ministry of Justice (MOJ) handles Bahrain’s judicial system.
Central Bank of Bahrain (CBB)	It’s the central bank of Bahrain and responsible for overseeing banks, insurance companies, investment firms, and financial institutions.
Ministry of Interior (MOI)	The Ministry of Interior (MOI) manages national security, law enforcement, and public safety.
Municipalities Affairs	This Ministry is responsible for business locations, zoning laws, and urban planning.
National Bureau for Revenue (NBR)	It oversees Bahrain’s taxation system.

7 Steps of Starting a Small Business in Bahrain

Forming a business in Bahrain is a straightforward process. The process can be overwhelming for some individuals. 

We have narrowed down the company formation process in Bahrain into 7 steps.

Step 1: Get Security Clearance for Commercial Registration (CR)

Getting security clearance from the Ministry of Interior is the first step of company formation in Bahrain. 

This approval ensures your business activities align with Bahrain’s regulations. Submit the required documents, like passport copies and personal details, to start the process. Once approved, this clearance allows you to proceed with your Commercial Registration (CR).

Step 2: Choose a Business Type

Bahrain offers different types of business structures, so selecting the right business type is important. Your selection depends on your goals! Here are the types of businesses in Bahrain that you can choose from, 

Business Type	Description
Sole Proprietorship	Business owned by a single person
Partnership	Owned by two or more people
Limited Liability Company (LLC)	A business structure that limits the liability of shareholders.
Single Person Company (SPC)	A company owned by one person with limited liability.
Branch Office	A branch of a foreign company operating in Bahrain.
Representative Office	A non-trading company focused on market research and promotion.
Public Joint Stock Company (PJSC)	In this company, shares are publicly traded.
Closed Joint Stock Company (CJSC)	Private company with limited shareholders.
Holding Company	A company created to manage other businesses or assets.

Step 3: Register your Business Name

For company registration, you will need to choose a unique name for your business. As an entrepreneur, you should choose a name that reflects your business motto.

The Ministry of Industry and Commerce (MOIC) verifies and approves your company name. 

Step 4: Prepare and Notarize Legal Documents

After your business name is approved, it’s time to prepare and notarize your legal documents. 

The Ministry of Justice (MOJ) in Bahrain must notarize all the documents. You will need the below documents,

• Memorandum and Articles of Association (MOA) 
• Shareholder Agreements 
• Board Resolution 
• Lease Agreement 
• Power of Attorney (if needed)

Step 5: Select the Business Location

Choosing your business location is very important. There is good news for those who want to create startups in Bahrain.

This country is planning free zones in the Muharraq Governorate. This zone will focus on business structures such as foodstuffs, pharmaceuticals and garments.

Areas such as Manama, Muharraq, and Riffa are also known for their vibrant commercial activities and infrastructure.

Step 6: Get Business License

You must apply for a commercial license from the Ministry of Industry and Commerce (MOIC). 

Depending on your business structure, you will need to apply for specific licenses. The process of getting a license is straightforward and depends on your business type and business activity. 

Just follow the below steps, 

• Choose the correct type of business license, such as commercial, industrial, or professional services
• Submit your application through the Sijilat online portal.
• Provide documents like CR approval and lease agreements.
• Get sector-specific approvals, if required, such as health or tourism permits.
• Pay the licensing fee to complete the process.
• Renew your license annually to avoid penalties.

Step 7: Open a Corporate Bank Account

In the last step, you must open a bank account in Bahrain. To open a bank account you must show the commercial registration and business license. 

Even though it seems easy to start a business in Bahrain, things can get complicated because of the Visa processing and other complex work. You can contact Black Swan and keep all complexity away with just 1 phone call! 

FAQs

Call +971 56 658 2477 Today for Your Company Registration in Bahrain

Bahrain is a great place for startups and entrepreneurs. The country is a part of the Gulf Cooperation Council (GCC), which makes it even more attractive for businesses.

If you follow the processes step by step, then starting a small business in Bahrain is simple. You have to choose the proper business structure, prepare the important documents, and complete the registration. 

Hope this blog has answered all your queries about the topic. 

Thank you for your time!