Company registration in Bahrain opens up broad prospects for entrepreneurs who want to carry out their activities in an economically stable state. Due to the 2025 tax reform, individuals interested in business registration in Bahrain, should familiarize themselves with the introduced and potential changes in tax legislation, which can have a significant impact on the structure and tax obligations of the business.
Bahrain Revenue Authority issues Guidance on Minimum Corporate Taxation, exercising its powers to administer taxation. The Guide contains a detailed analysis of the legal provisions on the minimum internal income tax and provides comprehensive explanations regarding the procedure for registering taxpayers.
Bahrain issues Guidance on Minimum Corporate Taxation
Under the new tax legislation of the Kingdom of Bahrain, which came into force from the beginning of 2025, multinational corporations (MNCs) classified as large taxpayers are required to pay an additional corporate tax, ensuring a minimum effective income tax rate of 15%. The consolidated revenue threshold for classifying an MNE as a large taxpayer is set at €750 million for two of the four previous financial periods.
Guide to Bahrain Minimum Income Tax and Registration Requirements provides a comprehensive analysis of the scope of the Domestic Minimum Top-Up Tax Law, defining the range of entities covered by it. It sets out in detail the procedures and requirements associated with the registration of these entities.
Maximum term of state registration of legal entities in Bahrain Belonging to a group of companies and operating in the Kingdom, in accordance with the requirements of the DMTT Law, is 120 days from the beginning of the financial year to which the said law applies. However, if the taxpayer fulfills the criterion associated with achieving a certain level of income for two of the four financial periods completed before January 1, 2025, the legislation provides for the possibility of extending the registration period until January 30 of the same year.
Conclusion
Bahrain introduces 15% income tax on multinational corporations. The tax authority issued a regulatory act containing a detailed description of the procedure for registering taxpayers subject to the legislation on minimum income tax. New corporate tax regime in Bahrain regulates that the taxpayer is required to undergo both initial registration with the tax authority and subsequent registration in the information system of the tax authority.
In the event that a multinational corporation has several related legal entities operating in the Kingdom of Bahrain, each of them is subject to registration with the tax authority, but the right to file a tax return is limited to one of them, determined in accordance with the corporate structure.
Planning to register a company in Bahrain, or if you are already doing business in the Kingdom, It is advisable to involve experienced lawyers specializing in commercial law issues for cooperation. Our company, which has many years of experience in the legal services market, guarantees clients highly qualified assistance and support in the process of registering companies in Bahrain, and also provides assistance in adapting to the specifics of legal and tax regulation of business activities in the Kingdom of Bahrain.
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