Bahrain or United Arab Emirates: where should your business be based?
The United Arab Emirates ranks higher in the index, 01 against 06. Which suits you depends on where the owners live, what the company is for and how it will be run.
Pillar by pillar
Doing business, side by side
Tax
Ordinary companies pay no corporate income tax. Oil and gas profits are taxed at 46%, multinational groups with revenue of EUR 750 million or more pay a 15% top-up tax from 2025, and a draft 10% tax on larger local companies is proposed from 2027.
Profits up to AED 375,000 are taxed at 0%. In a free zone the 0% rate reaches qualifying income only, and VAT is charged at 5%.
Set-up
Registration through Sijilat takes about 5 days, or about 14 working days with the activity licence. The fee is BHD 50 plus BHD 100 for up to three activities, with set-up costs generally under BHD 190.
Set-up typically costs AED 10,000 to 50,000 in total, depending on mainland or free zone, the activity and any licences. Capital must be fully paid at incorporation.
On the ground
The company needs a business address recorded with the Ministry, usually a lease or a qualifying shared office, and must keep audited accounts. There is no statutory minimum capital for a WLL.
A mainland company needs no resident director or secretary, but it must appoint an auditor. Free zone requirements vary from one zone to another.
Ownership
Companies must record anyone owning or controlling 10% or more with the Ministry through Sijilat and confirm the details at each annual renewal. The register is not open to the public.
The beneficial ownership register is open to the authorities only. Each company must name a UAE-resident individual as the contact for its register.
Residence
An owner of a registered Bahraini company can apply for a self sponsored investor residence permit. Golden Residency is open to property owners from BHD 130,000 and to some long serving residents and retirees.
An investor or partner can hold a five-year green residence visa on the trade licence. A ten-year golden visa needs capital or a partner's share of AED 2 million.
Living and working
Currency
Bahraini dinar (BHD), pegged to the US dollar.
UAE dirham, pegged to the US dollar.
Time zone
UTC+3 all year, with no summer time.
UTC+4.
Personal tax
There is no personal income tax. Employers pay social insurance of 3% on expatriate salaries, up to a BHD 4,000 monthly ceiling.
The UAE does not levy income tax on individuals.
Flights
Bahrain International Airport has nonstop scheduled flights to 67 destinations, including seasonal routes, across the Gulf, South Asia, Europe and East Asia.
Dubai International served 217 destinations in 99 countries at the end of H1 2026; London is 6 hrs 50 mins by British Airways.
Language
Arabic is the official language; English is allowed in some Dubai Courts circuits, and the DIFC Courts sit in English.
Bahrain vs United Arab Emirates: common questions
Bahrain: Ordinary companies pay no corporate income tax. Oil and gas profits are taxed at 46%, multinational groups with revenue of EUR 750 million or more pay a 15% top-up tax from 2025, and a draft 10% tax on larger local companies is proposed from 2027. The United Arab Emirates: Profits up to AED 375,000 are taxed at 0%. In a free zone the 0% rate reaches qualifying income only, and VAT is charged at 5%.
Bahrain: Registration through Sijilat takes about 5 days, or about 14 working days with the activity licence. The fee is BHD 50 plus BHD 100 for up to three activities, with set-up costs generally under BHD 190. The United Arab Emirates: Set-up typically costs AED 10,000 to 50,000 in total, depending on mainland or free zone, the activity and any licences. Capital must be fully paid at incorporation.
Bahrain: The company needs a business address recorded with the Ministry, usually a lease or a qualifying shared office, and must keep audited accounts. There is no statutory minimum capital for a WLL. The United Arab Emirates: A mainland company needs no resident director or secretary, but it must appoint an auditor. Free zone requirements vary from one zone to another.
Bahrain: Companies must record anyone owning or controlling 10% or more with the Ministry through Sijilat and confirm the details at each annual renewal. The register is not open to the public. The United Arab Emirates: The beneficial ownership register is open to the authorities only. Each company must name a UAE-resident individual as the contact for its register.
Bahrain: An owner of a registered Bahraini company can apply for a self sponsored investor residence permit. Golden Residency is open to property owners from BHD 130,000 and to some long serving residents and retirees. The United Arab Emirates: An investor or partner can hold a five-year green residence visa on the trade licence. A ten-year golden visa needs capital or a partner's share of AED 2 million.
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