How to start a business in Bahrain as a foreigner (2026)

Legal framework

Commercial Companies Law (Decree-Law No. 21 of 2001, as amended — most recently by Decree-Law No. 38 of 2025), administered by the Ministry of Industry and Commerce (MOIC) via the Sijilat one-stop online commercial-registration portal; the Bahrain Economic Development Board (EDB) supports investor onboarding.

Key points: starting a business in Bahrain

1. 01Foreign ownership

   100% foreign ownership is allowed in the vast majority of MOIC activity codes without a local sponsor; a residual list of activities (e.g. press/publishing, Hajj/Umrah services, clearance/expediting offices, workforce/labour supply, real-estate brokerage, and parts of oil & gas and defence) remains reserved or subject to Bahraini participation.

   state.gov investmentpolicy.unctad.org

2. 02Legal framework & 2025 update

   The Commercial Companies Law (Decree-Law 21/2001) was amended by Decree-Law No. 38 of 2025, which modernised company forms (merging the Single Person Company into the WLL structure) and refined foreign-ownership conditions, including lower capital thresholds.

   investmentpolicy.unctad.org iclg.com

3. 03Minimum capital

   The WLL — the standard vehicle for foreign investors — has no statutory minimum share capital in general. For wholly foreign-owned entities the previously-required BD 2 million threshold was cut to BD 100,000 effective 18 October 2024, and regulated sectors (finance, insurance, real estate) can require higher amounts set by their sectoral regulator.

   investmentpolicy.unctad.org state.gov

4. 04Setup steps via Sijilat

   Standard flow: (1) reserve trade name and choose legal form on Sijilat; (2) obtain security clearance from the Ministry of Interior for foreign shareholders/directors; (3) obtain any sectoral/activity approvals; (4) sign and notarise the Memorandum/Articles of Association; (5) deposit capital (where applicable) and obtain the bank certificate; (6) collect the Commercial Registration (CR) and municipal/activity licences.

   moic.gov.bh sijilat.bh

5. 05Typical timeline

   A straightforward WLL is generally registered in roughly 2–4 weeks (about 11–20 business days for the core CR); more complex or regulated activities requiring additional licences can extend the process to 6+ weeks.

   moic.gov.bh state.gov

6. 06Investor support & tax context

   The Bahrain EDB provides free investor-facilitation services, and Bahrain levies no personal income tax and (aside from oil, gas and — from 2025 — the DMTT on large multinationals under Pillar Two) no general corporate income tax, which lowers ongoing compliance friction for new SMEs.

   bahrainedb.com pwc.com

Timeline of decisions

1. 18 Dec 2025Decision · official
   Decision No. 71 of 2025 further liberalises foreign ownership

   Amending Decision No. 40 of 2021, Bahrain opened more activities (including real-estate brokerage and port operation) to 100% foreign ownership, some unconditionally and others subject to a BHD 100,000 minimum capital and large parent-company revenue. It deepens Bahrain's open-investment regime for new businesses.

   UNCTAD Investment Policy Monitor

2. 12 Sept 2025Law · official
   Decree-Law No. 38 of 2025 modernises the Commercial Companies Law

   Effective on publication, the amendment lets companies hold board/shareholder meetings and conduct voting electronically by default and broadly modernises corporate governance, reducing administrative friction for setting up and running companies.

   U.S. Library of Congress, Global Legal Monitor

3. 1 Jan 2024Guidance
   MOIC Resolution No. 43 of 2024 ties registration to a corporate bank account

   The Ministry of Industry and Commerce made opening a Bahraini corporate bank account a prerequisite to finalising commercial registration, adding a compliance step to the company-formation workflow on Sijilat.

   KPMG Bahrain (regulatory alert)

4. 3 Apr 2023Guidance · official
   Bahrain launches the 'Golden Licence' for major investors

   The Economic Development Board introduced a Golden Licence for projects worth over USD 50 million or creating 500+ jobs, offering streamlined licensing, priority land allocation, and a dedicated account manager. It created a fast-track setup channel for large-scale ventures.

   Bahrain Economic Development Board

5. 1 Jan 2021Decision
   Decision No. 40 of 2021 consolidates the foreign-ownership framework

   MOIC issued a consolidated schedule defining which commercial activities permit 100% foreign ownership and which remain restricted, becoming the reference framework that later decisions (e.g. No. 71 of 2025) amend.

   Mondaq (legal analysis)

6. 1 Jan 2020Law
   Resolution No. 28 of 2020 amends the Commercial Companies Law

   The resolution allowed joint-stock companies to issue classes of preference shares, let limited partnerships use standalone trade names, and introduced a not-for-profit company form, broadening the menu of corporate vehicles available to founders.

   Al Tamimi & Company

7. 1 Jan 2019Law · official
   Legislative Decree No. 10 of 2019 expands 100% foreign ownership

   Bahrain removed many remaining restrictions so that the large majority of MOIC-listed activities became open to full foreign ownership without a local partner, cementing it as a GCC leader in open foreign investment.

   UNCTAD Investment Policy Monitor

8. 1 Jan 2018Law · official
   Decree-Law No. 53 of 2018 amends the Commercial Companies Law

   A major overhaul of the 2001 law that, together with related reforms, opened the door to full foreign ownership in most sectors and updated governance rules, an inflection point for how easily foreigners can establish companies in Bahrain.

   WIPO Lex

9. 1 May 2015Guidance · official
   Sijilat online commercial-registration portal launched

   MOIC and the e-Government Authority launched Sijilat, a single online portal linking the government agencies that issue licences and approvals, enabling end-to-end company registration, renewals, and amendments online.

   Ministry of Industry and Commerce

10. 1 Jan 2001Law · official
    Commercial Companies Law promulgated by Decree-Law No. 21 of 2001

    The foundational statute governing the formation, types, management, and dissolution of companies in Bahrain (WLL, BSC, partnerships, etc.). It remains the core legal framework that all later amendments build on.

    WIPO Lex

Sources

1. 1.moic.gov.bh/en/node/2724
2. 2.sijilat.bh/
3. 3.moic.gov.bh/en/node/1582
4. 4.bahrainedb.com/bahrain-pulse/investor-questions-on-bahrains-regulations-faqs-answere
5. 5.state.gov/reports/2025-investment-climate-statements/bahrain
6. 6.investmentpolicy.unctad.org/investment-policy-monitor/measures/2920/bahrain-passed-a-new-law-allo
7. 7.investmentpolicy.unctad.org/investment-policy-monitor/measures/3398/bahrain-new-commercial-compan
8. 8.investmentpolicy.unctad.org/investment-policy-monitor/measures/4846/bahrain-amends-conditions-of-
9. 9.iclg.com/practice-areas/foreign-direct-investment-regimes-laws-and-regulations
10. 10.pwc.com/m1/en/tax/documents/doing-business-guides/dbibh.pdf