Ranked #2 on the Tax Attractiveness Index by Ludwig Maximilian University of Munich (LMU), Bahrain holds the status of being a Middle Eastern economic gem. The small islandic country boasts the status of being a popular Formula One racing Grand Prix destination, a tourist hotspot for bird watching, scuba diving and horse riding, as well as of having a flexible education sector.
Bahrain Fast Facts
Capital city: Manama Currency: Bahraini Dinar (BHD) Time zone: Arabia Standard Time (GMT + 3) Main languages: Arabic and English
BRIEF ECONOMIC BACKGROUND
Despite Moody's outlook for Bahrain's banking system being negative due to the country's heavy governmental debt burden, there lies an opportunity for investors to act now before Bahrain fully recovers economically. Bahrain's financial sector is the largest employer of all other sectors, making up approx. 80% of the country's workforce.
Bahrain's national banking system comprises of both Islamic and conventional banks, and the country is known as the financial hub of the Middle East. The Central Bank of Bahrain (CBB) is the single regulator of all banking and insurance activities. Bahrain's overall industry growth has been supported by the open market economy that her government has taken on.
The efficient twin Capital Markets systems structure of an Automated Trading System (ATS) and a Clearing, Settlement, and Central Depository System (CDS), ensures for a fast and efficient forex trading, averaging 2 days for international transactions to usually clear.
OPENING A PERSONAL OR BUSINESS ACCOUNT
Banks like HSBC offer easy online account setups that have multijurisdictional access, so you can use the bank account in all the countries they are operational in. Client Service Consultants from HSBC will talk you through the pathway to obtaining citizenship via offshore banking activities (as well as onshore should you decide to immigrate there), carry out internal vetting checks and take copies of your personal ID documents they need.
Most banks like HSBC and Citi Bank can issue your debit card via mail once the application process has been successful, but in Bahrain it is highly likely they may request an ID checked in-person pick up. Unlike the UAE or other offshore financial destinations, your offshore account will only be fully utilised once you've obtained a Bahrain ID. Things like credit and loans won't be available to you before obtaining at least a permanent residence status of immigration.
ADVANTAGES
With a 0% corporate income tax rate, entrepreneurs save on 15-25% of their business income received in a Bahrain-based bank account, for as long as they can prove the legitimate obtaining of funds in exchange for the provision of products/services. There is a limited corporate tax rate of 46% for companies endeavouring in the exploration, production and refining of hydrocarbons such as methane. If this is your case, perhaps Saudi Arabia would be a more likeable option.
COST OF OPENING AN ACCOUNT
Personal accounts average a minimum of USD$950.00 per single account holder, whilst the business account opening fees vary with the business's income, i.e., there are different cost structures for businesses that earn different levels of income. CITI bank works with a 'minimum monthly average balance' requirement of at least AED 3,000.00 (€810/USD$816.75/R13,815.88) for personal accounts.
References:
Comments