Branch of a Foreign Company
Foreign companies may establish branches in Bahrain, without the need for a local partner, if the activities that will be undertaken are open to foreign ownership. In order for a foreign company to carry out business in Bahrain it may establish a branch either by way of an operational office or a representative office.
Branches of foreign companies with an operational office may be subject to obtaining further approvals in Bahrain depending on their activities. For example, companies looking to engage in banking and insurance activities must obtain a license from the Central Bank of Bahrain.
Please note that where a branch is set up to engage in activities in Bahrain which necessitate 51% Bahraini or GCC ownership, then the following requirements are imposed with respect to the foreign parent company
- The foreign parent company must have been in existence for at least three (3) full years;
- The foreign parent company must be 100% by GCC nationals; and
- The foreign parent company itself must be established in a GCC jurisdiction.
In relation to representative offices, these are unable to carry out any business operations in Bahrain and are restricted to undertaking marketing and promotional activities in Bahrain.
The liabilities of the branch are guaranteed by the parent company, and it is a requirement under the Commercial Companies Law that the parent company provides a guarantee in relation to its’ branch, and appoints a branch manager.
