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Importing & Distributing

Import Procedures
Anyone who wishes to import goods to Bahrain for the purpose of sale or consumtion must obtain a general licence from the Directorate of Customs and Ports of the Ministry of Finance and National Economy. Importers must fill in the customs declaration and present the following documents:

1. Import Customs Declaration Form (CDF)
2. Delivery note from the exporting agent to the importer (with valid CR)
3. Three copies of the exporter's invoices (originals) to the importer
4. Two copies of the Packing List with details of weight, packaging and commodity classification for each article submitted
5. A certificate of origin (original) of the competent Chamber of Commerce of the country of origin of goods
6. A copy of the insurance policy
7. Original Bill of Lading
8. Import permit / authorization of the competent authority for the import of controlled goods
9. Bank statement / guarantee (if applicable)
10. A statistical declaration if the final destination of the goods is within countries of the Cooperation Council (GCC)

After the Customs Declaration has been submitted using the deCAS system, the clearance procedure for the imported goods is as follows:

1. Pay the duties and taxes due at the customs office where the goods are to be cleared
2. Submit all necessary documents to the customs officer
3. Pay the handling fee and make an appointment at the counter of the port operator for moving cargo
4. The port operator moves the container to the checkpoint
5. Customs assess the risk level of the goods and may decide to carry out an inspection
6. Finally, the goods are cleared and can leave the customs office

For more information, consult the website of the Customs affairs.

Distribution market players
Despite being a small country with a relatively modest population, the kingdom has more than twenty malls and the same number of supermarkets/hypermarkets. These have appeared in the last 20 years and have taken advantage of traditional channels (souks, travelling salesmen, stands). The largest supermarket chains include: Géant, Midway, Carrefour, Lulu Hypermarket, Jawad. The largest wholesalers are: BMMI, Jawad Business Group, HHM Group (Fine Food), Ali & Sons (Foodco).

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Operating a Business

Type of companies

With Limited Liability Company (WLL)
Number of partners: Minimum 2, maximum 50.
Capital (max/min): 20,000 BHD minimum
Shareholders and liability: Limited: partners are responsible for the company's debts and obligations to the extent of their participation in the capital.
A Single Person Company (SPC)
Number of partners: 1 person, from Bahrain or
Capital (max/min): 50,000 BHD minimum
Shareholders and liability: Unlimited; the owner is responsible for all of the company's debts and obligations with his entire personal property. 
Bahrain Shareholding Company (BSC)
Number of partners: Minimum 7 (public); ou 2 (closed)
Capital (max/min): 1.000,000 BHD minimum (public); or 250,000 BHD (closed)
Shareholders and liability: The partners are responsible for the company's debts and obligations to the extent of the value of their shares.
Commandite Company by Shares
Number of partners: Minimum 4
Capital (max/min): 20,000 BHD minimum
Shareholders and liability: Unlimited if the joint partners are jointly responsible for the company's obligations, to the extent of their personal wealth; or limited if the partners (share-holders)  are only liable for the company's obligations to the extent of their equity (shares) in the company's capital.
Partnership Company
Number of partners: Minimum 2
Capital (max/min): Not applicable
Shareholders and liability: Unlimited
 
Setting Up a Company Bahrain East Asia & Pacific
Procedures (number) 6.0 7.3
Time (days) 8.3 29.7

Source: Doing Business - Latest available data.

 

Cost of Labour

Minimum Wage
BHD 300 per month (source: ILO, 2011).
Average Wage
Gross average monthly wage of men: BHD 311 (source: ILO, 2010);
Gross average monthly wage of women: BHD 365 (source: ILO, 2010).
Social Contributions
Social Security Contributions Paid By Employers: 12% (3% for expats)
Social Security Contributions Paid By Employees: 7% (1% for expats)
 

Intellectual Property

National Organisations
The Directorate of Industrial Property of the Ministry of Industry and Commerce.
Regional Organisations
Bahrain participates in the work of the GCC Patent Office.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

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Tax Rates

Consumption Taxes

Nature of the Tax
Value-added tax (introduced on 1 January 2019)
Tax Rate
5%
Reduced Tax Rate
Basic foodstuffs; domestic and international transport; new properties; healthcare; exports of goods and services; high-value metals; domestic oil and gas; education; and medicine and medical equipment are zero-rated.
The supply of bare land and buildings, specific financial services, and certain imported goods are exempt.
Other Consumption Taxes
Tobacco products and energy drinks are subject to excise tax at 100%, while carbonated drinks are subject to excise tax at 50%. Further goods may also become subject to excise tax in the future.
 

Corporate Taxes

Company Tax
None, except for oil companies, at a 46% rate of net profits
Capital Gains Taxation
Capital gains are not taxed in Bahrain.
Main Allowable Deductions and Tax Credits
Bahraini laws provide for deductions for nearly all costs associated with taxable activities in the country, such as the cost of production, refinement, remuneration of employees associated with these taxable activities (including social insurance and pensions paid for the benefit of these employees), and other operational losses.

All reasonable and justifiable costs of production and exploration of products sold during the current taxable year are deductible for tax purposes, if these expenses have not been deducted elsewhere in calculating net taxable income.
All taxes and duties not imposed by the Bahrain income tax law - such as customs duties - can also be deducted from taxable income.

Unutilised losses may be carried forward indefinitely and deducted up to an amount equivalent to the net income. Carryback of losses is not permitted.

Other Corporate Taxes
Other taxes include:
- registration and licence fees: c
ompanies are subject to registration fees (from BHD 25 to 1,000) and licence fees that vary according to the nature of their activity
- stamp duty: applies to the transfer and/or registration of real estate only and is levied at a rate of 2%. If the duty is paid within 60 days following the transaction date, the rate of the stamp duty is reduced to 1.7%
- municipality tax: levied on the rental of commercial and residential property to expatriates at a rate of 10%
- social security contribution: employer's social security contribution is 12% for Bahraini workers and 3% for non-Bahraini workers, calculated on a maximum monthly earning capped at BHD 4,000
- a 10% levy is imposed on the gross turnover of hotels and first-grade restaurants.
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
The list of tax treaties signed by Bahrain.
Withholding Taxes
No whitholding taxes (interests, dividends, royalties) are levied in Bahrain.

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