Bahrain Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in bahrain, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Using an agent or distributor

The U.S.-Bahrain Free Trade Agreement (FTA) and Bilateral Investment Treaty (BIT) ensure American companies no longer need to appoint a local commercial agent, though they may opt to do so. A commercial agency arrangement enables foreign investors to access the market without having to establish a direct presence in Bahrain. A commercial agent is any Bahraini party appointed by a foreign party to represent the foreign party’s product or service in Bahrain. Local law governs the relationship, whether the relationship is structured as a distributorship, sales agency, or otherwise. As in other Gulf countries, regular, personal contact is the key to success in trade relationships.

A company’s office qualifies as a regional office if the company services even one additional GCC country from the office. Bahraini law does not require foreign companies to hire a local agent or partner to establish a regional office in Bahrain. Nevertheless, U.S. companies setting up regional offices typically find it useful to have a relationship with a local representative, particularly to navigate the local bureaucracy.

Establishing a local office

Companies wishing to open an office in Bahrain can do so on the Ministry of Industry and Commerce’s (MOIC) official commercial registration portal, Sijilat, or by visiting the Bahrain Investors’ Center (BIC), located in the Bahrain Financial Harbor in Manama. Operated by MOIC, BIC is a “One-Stop Shop” where representatives from all the different ministries involved in the registration of a business, as well as representatives from financial institutions, legal entities, and telecommunication companies, come together to support registrants. Some commercial activities such as tourism, entertainment, schools, nurseries (daycare), and training institutions, however, may require approval from other government agencies.

MOIC’s Commercial Registration and Companies Directorate regulates all commercial licenses and activities in Bahrain.

Applicants may obtain a commercial license application form electronically from MOIC’s website: www.sijilat.bh or visit BIC for more information.

Bahrain Investors’ Center
Bahrain Financial Harbor
Harbor Gate
PO Box 2210
Manama, Kingdom of Bahrain
Email: investorrelation@moic.gov.bh

Franchising

The demand for U.S. franchises remains strong in Bahrain, particularly in the fast food, restaurant, and retail sectors. More than one hundred U.S. franchise restaurants and outlets operate in Bahrain, with new ones opening regularly. Many major brands are present in Bahrain, including Applebee’s, Baskin Robbins, Caribou Coffee, Dairy Queen, Domino’s, Dunkin’ Donuts, Krispy Kreme, McDonald’s, Pizza Hut, and Starbucks. Although Bahrain’s market is receptive to new franchising opportunities, including in the automotive and hospitality sectors, there is strong competition given the variety of local and international franchises that utilize broadly popular internet and app-based food delivery services, including Talabat and Jahez.

The Bahraini government has yet to develop specialized legislation to regulate franchising activities. Franchise agreements are governed by standard commercial laws. Bahrain’s legislation for regulating patents and trademarks constitutes the most specialized body of commercial laws that apply to franchising activities. Bahrain is a member of the World Trade Organization (WTO) and has ratified the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.

Direct Marketing

Bahrain is ranked third globally in the number of internet users with a 100 percent penetration rate and easy access to social media and online platofrms have helped create an active medium for marketing businesses online. However, traditional advertising methods remain active, such as printed ads in local newspapers and magazines, fairs and exhibitions, and billboards. Advertising is also possible on Bahraini television and radio. Many businesses distribute flyers in residential neighborhoodsand advertise via text messaging. Bahrain also hosts a number of trade shows, which provide opportunities to market to importers and distributors.

Joint Ventures/Licensing

The demand for joint ventures and licensing opportunities remains strong in Bahrain. The infrastructure, ICT, electricity, water, tourism, training and education sectors have been privatized and are important growth sectors in the economy.

American companies are attractive to Bahraini partners due to their strong brand recognition and high quality.

Bahrain’s Commercial Companies Law permits joint ventures between parties. A joint venture agreement must specify the parties’ rights and obligations and determine the division of profits and losses. There are no other specific formalities for parties to enter into a joint venture (such as registration). Joint ventures in Bahrain have no corporate identity. Since all business activity in Bahrain must be conducted through a company or an individual establishment, third parties have recourse against a company or individual establishment, not directly against the joint venture.

In practice, foreign companies and local businesses who want to engage in joint ventures can set up a new company. Establishing a limited liability company is the most popular business vehicle for this purpose. The parties’ relationship is governed by legal documents from the new company, in particular the memorandum of association. However, some parties also draw up additional agreements to govern their relationship. These are enforceable only to the extent that they are not contrary to the laws of Bahrain.

The Commercial Section of U.S. Embassy Manama helps match U.S. and Bahraini firms looking to form joint ventures locally and within the regional market.

Express Delivery

Major global express delivery companies, such as DHL, FedEx, UPS, ARAMEX, Sky Net, and others, operate in Bahrain. Transit times vary but for packages shipped from the United States to Bahrain, the average time is two to three days, not including the customs clearance process. Customs procedures and requirements are standard and can be found on the Bahrain Customs website at www.bahraincustoms.gov.bh.

Due Diligence

Due diligence is essential to avoid fraud. Any legitimate business in Bahrain will operate under a valid Commercial Registration (CR), with a validity date of less than two years. All U.S. companies should check a company’s CR through the Bahraini government’s Commercial Registration Portal, www.sijilat.bh, before doing business with it. The U.S. Commercial Service also provides a fee-based due diligence service for U.S. companies, called International Company Profile. For details, contact:

U.S. Embassy Manama – Commercial Section
P.O. Box 26431
Manama, Kingdom of Bahrain
Tel: (973) 1724-2700
Fax: (973) 1725-6717
Email: mailto:bh.usembassy.gov/business
Website:  bh.usembassy.gov/business

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