Opening a bank account in Bahrain

Most places make a company prove it exists before a bank will talk to it. Bahrain wrote the opposite case into its rulebook: a bank here may open an account for a company still being formed, so the capital has somewhere to be paid and the registration can finish. The permission carries a clock and limits on what the money may do meanwhile.

What else we do in the kingdom is collected on the Bahrain page; for a company registered elsewhere, start here.

An account before the company exists

A bank may open an account for the purpose of injecting the initial capital of a company under formation. Until every customer due diligence requirement has been fully met, no transfer or disbursement may take place out of it. The money can arrive and be seen to have arrived, which is what the registration needs, and it stays put until the checks finish.

A second account, for the bills of getting started

Separately, a bank may open an account to pay formation expenses, on conditions agreed with the customer. Guidance shapes them: the bank asks for the nature and volume of expected transactions and the likely suppliers, may agree a ceiling on payments, and should ensure money leaves only through the electronic funds transfer system. Banks are also expected to connect their systems to the registration portal.

Six months, and what happens at the end

All accounts of a company under formation must be closed and the funds returned, or else suspended, where the final commercial registration has not arrived and the customer has not completed the due diligence requirements within six months of the account being opened. The period may be extended by bilateral arrangement between bank and customer — a conversation for month four.

When a bank may say no

The grounds are narrow. A bank should deny a request only for serious reasons, or where suspicion arises from its own risk assessment. The example the rules give is the discovery that a shareholder of the company under formation appears on a sanctions list, local, regional or international.

The papers, and who may certify them

Straight from the register

An abstract printed from the commerce ministry's own portal satisfies the requirement for a certified copy.

A certifier from a listed state

Documents not handed over in original form are certified by one of the named professionals from a GCC or FATF member state.

Contact details on the certificate

The certifier leaves clear contact details, and the bank verifies them through a professional body, a database or a call.

Twenty per cent of the issued capital

Identity is obtained and verified for shareholders at that level, except for companies listed in a GCC or FATF state.

What the bank collects about the entity itself

If the checks cannot be finished

The rulebook does not leave a half-checked relationship running. Where a bank cannot comply with the due diligence requirements, it must consider freezing the funds received and reporting a suspicious transaction, ending the relationship, declining the transaction, or returning the funds to the counterparty by the method they arrived in.

Sources: the capital and formation expense accounts, the six-month limit, the grounds for refusal and the electronic transfer condition — paragraphs FC-1.1.10B to FC-1.1.10F of the central bank rulebook; the documents, certification and the 20% level — section FC-1.2.