Middle-East Countries



In an effort to attract and encourage foreign investment, Bahrain has created a remarkable economic environment that, when considered with its geographic location, is exceptionally pro-business. Bahrain has benefited from strong economic growth in recent years and now holds a prosperous economy. Its central location in the Middle East enables good accessibility to the world's business market. Their trade routes to worldwide markets through fast and efficient access by air, sea and road are a big attraction for businesses. Bahrain is also seen as a gateway to the Gulf which has a market of over 100 million people

Types of Business Structure

Shareholding Company

100% ownership permitted for Gulf Co-operation Council (GCC) nationals • Non-GCC (foreign) investors may acquire up to 49% of the company • US investors have the same status as GCC nationals, i.e. 100% ownership is permitted

Limited Liability Company

100% foreign ownership is allowed

Partnership Company

100% foreign ownership is allowed

Single Person Company

100% foreign ownership is allowed

Branch of a Foreign Company

A branch of a foreign company registered outside of Bahrain may be established in the Kingdom either as a regional office, representative office or an operational office.

Holding Company

A holding company may be in the form of either a Closed or Public Shareholding Company, a Limited Liability Company, or a Single Person Company.

Individual Establishment

An Individual Establishment is a non-incorporated entity owned by a single individual. This type of company is only open for Bahraini citizens and GCC citizens resident in Bahrain.


Bahrain is a tax free economy with no withholding tax, no corporate tax, no income tax and no VAT, which significantly contributed to a great influx of foreign investors in Bahrain. There are however, certain taxes imposed on oil, gas and petroleum. There is also a 1% 'Social Insurance Tax' on salaries to help fund unemployment benefits for all workers and a municipal tax is also payable by individuals or companies renting property in Bahrain.



Saudi Arabia has an oil-based economy with strong government control over major economic activities. Saudi Arabia possesses 18% of the world's proven petroleum reserves and it ranks as the largest exporter of petroleum. About 40% of its GDP comes from the private sector.

Types of Business Structure

Joint Stock Company

A joint stock company is owned by five or more individuals or entities. Capital is apportioned into negotiable shares of an equal amount, and shareholders are liable only to the extent of the value of their holdings. The minimum capital requirement is two million Saudi Riyals (SR) or no less than ten million SR if its shares are offered for public subscription. The par value of each share cannot be less than SR 50, and upon incorporation, its issued paid-up capital must be no less than one-half of the authorized capital. A joint stock company can issue non-voting preferred shares in an amount up to 50 percent of its capital.

Prospective joint stock companies involving businesses such as minerals exploitation, administration of public utilities, banking and finance require authorization by Royal Decree prior to incorporation. The management is composed of a board of directors. This board, appointed by the shareholders, must have a minimum of three members. Directors must own at least 200 shares of the joint stock company.

Limited Liability Companies

Generally, a company with foreign participation would incorporate as a limited liability company, meaning a privately held company used to set up industrial, agricultural, contracting or services projects having Saudi and foreign partners. Limited liability companies are specifically not permitted to conduct banking, insurance or savings operations. These entities may not offer subscriptions to the public to raise capital, and partners cannot transfer their interest without the unanimous consent of the other partners.

A limited liability company must be registered under the Regulations for Companies as well as under the foreign capital investment regulatory regime. Contribution stipulations, as well as other mandatory information, must be registered with the Ministry of Commerce.


General Partnerships

A general partnership is an association of two or more persons who are jointly liable for the debts of the partnership to the extent of their personal fortunes. As a separate legal entity it can transact business in its own name. Partners are forbidden to transfer interests without the unanimous consent of the other partners. No minimum capital is required, and contribution terms are set forth in the partnership agreement which must be registered with the Ministry of Commerce.

Limited Partnerships

Limited partnerships are composed of general partners who are liable for the partnership's debts to the extent of their personal fortunes and limited partners who are liable for partnership's debts only to the extent of their investment. Participation by limited partners in the management of the partnership might expose them to joint individual liability with the general partners. Registration requirements are the same as for general partnerships. The name of the firm must include the name of at least one general partner. For reasons of liability, limited partners should avoid having their names included in the firm name.

Professional Partnerships

As of 1991, foreign 'free professionals' such as lawyers, engineers and medical practitioners, may establish joint practices with partnerships that are locally licensed. The establishment of a professional partnership requires approval from the Ministry of Commerce, which sets conditions that concern the reputation of the foreign firms, transfer of interests and minimum participation of Saudi partners (25 percent). Profits of foreign partners from such professional partnership will presumably be taxable, unlike salaries earned by foreign professionals working for local firms.

Joint Ventures

Foreign investment in joint ventures with Saudi partners has advantages. While foreign partners in a joint venture entity may hold 100 percent of the equity in some Gulf Cooperation Council (GCC) countries, there are advantages in having a local Saudi partner own 50 percent of the equity or more. For example, if a Saudi holds 50 percent of the equity in a joint venture company it enables the company to obtain an interest-free loan for up to 50 percent of the project cost, which is repayable over a period of ten years. In addition, majority Saudi-owned joint ventures are entitled to preference after wholly Saudi-owned companies in the allotment of government contracts. Trading and marketing activities aimed at Saudi individuals or wholly Saudi-owned companies, however, are forbidden to mixed Saudi-foreign joint ventures by Royal Decree M/11 of 1962.

Branch Offices

Foreign companies carrying out industrial or contracting works essential to the goals of economic development in Saudi Arabia may apply to the Foreign Capital Investment Committee for a license to establish a branch in the Kingdom. Upon receiving the license, the company may complete its registration process under the Regulation. It may be noted that, unlike a limited liability joint venture, a branch of a foreign entity is not entitled to a tax holiday. In practice, relatively few branch licenses have been issued, consistent with a general government policy of insulating the local market from direct competition by foreign companies.

In recent years, however, the concept of branches has been expanded to cover companies that are not involved in industrial and contracting works although the granting of such licenses is rare.

Saudi Service Agents

Foreign companies operating exclusively for the purpose of implementing government contracts are required to obtain temporary commercial registration. Such registration is available only to contractors operating in the public sector. If a foreign contractor is engaged in a governmental contract and does not have a Saudi partner, it must engage a Saudi national as an agent. In cases of certain military contracts an exception to this general rule may sometimes be made. Agents may receive compensation not exceeding 5 percent of the contract value. The agency agreement should be submitted to the Ministry of Commerce along with the application for temporary commercial registration within 30 days of signing the contract.


The standard corporate tax rate in Saudi Arabia is 20%

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