Economic Substance Requirements in the Kingdom of Bahrain

In line with the OECD and G20's BEPS initiative to combat tax avoidance, Bahrain has implemented Economic Substance Regulations (ESR) for both regulated and non-regulated entities. These regulations ensure businesses maintain a substantial economic presence in Bahrain by conducting core income-generating activities locally. Key directives and ministerial orders issued by the Central Bank of Bahrain (CBB) and the Ministry of Industry and Commerce (MOIC) establish compliance requirements, including annual reporting and demonstrating adequacy of operations, employees, and management. Non-compliance can result in severe penalties. For comprehensive support in meeting ESR obligations, download our flyer or contact our Bahrain-based Tax experts for assistance.