The tiny Middle-Eastern nation of Bahrain has a strong economy with particular success in the oil & gas and financial services industries. While the country is still undoubtedly heavily reliant on oil revenues, it has made positive progress with diversification in recent decades.
There are many opportunities for foreign businesses in Bahrain, but if you are contemplating an expansion project you should be prepared to experience unexpected delays. The country has a complex framework of employment and business regulations, so legal navigation, along with the language barrier, can result in slow progress and increased costs.
At Horizons, we offer an extensive set of outsourcing services to help organizations expand into Bahrain quickly and effectively. Our professional employer organization (PEO), payroll, and employ of record (EOR) services give you the ability to outsource all the complex administration and legal compliance work so you can focus your efforts on a rapid and successful expansion.
Our dedicated in-house recruitment team can also help you to find, hire, and onboard new employees in Bahrain. If you have not yet established an entity in the country, you can use our local subsidiary as employer of record, providing all the benefits of hiring talent in Bahrain but without any of the associated administration.
Our outsourcing services could cut your expansion expenditure by thousands, speed up your growth, and give you greater flexibility moving forward.
Why choose Horizons for your Bahrain expansion?
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Hiring in Bahrain: Employment law overview
Employment contracts in Bahrain
Employers in Bahrain must provide a formal written contract for every hire they make in the country. These contracts need to contain all details of the employment arrangement such as wage/salary, benefits, terminations rules, and more. They should also be written in Arabic and use the local currency of the Bahraini dinar.
Working hours in Bahrain
The standard working week in Bahrain is between 40 and 48 hours spread across five days. In general, Friday and Saturday as taken as rest days. Ramadan can affect these hours.
Public holidays in Bahrain
There are a number of public holidays in Bahrain. The following days are given as paid leave to many employees each year:
- New Year’s Day
- Labour Day
- Eid Al Fitr
- Prophet’s Birthday
- National Day
- Eid Al-Adha
- Hijri New Year
Bahrain vacation leave
Employees in Bahrain are usually entitled to 30 days of paid vacation leave annually. This entitlement is gained after one year of service with an employer. Before this, vacation is accrued (2.5 days/month).
After five years of employment, Muslim employees are also entitled to a one-off 14-day paid entitlement specifically for a pilgrimage to Mecca.
Bahrain sick leave
In general, employees in Bahrain can take up to 35 days of paid sick leave annually. The first 15 days are paid at 100% of normal pay and the following 20 days are paid at 50%. A further 20 days can be taken without pay.
Parental leave in Bahrain
Female employees in Bahrain are entitled to 75 days of maternity leave, in general, with a mandatory 40-day period of leave after giving birth. The first 60 days of leave are paid and the remaining 15 days are unpaid.
Terminations and severance in Bahrain
Employees in Bahrain who are on indefinite-term contracts and have worked for at least three months are entitled to a severance payment upon dismissal. This payment varies depending on the length of service as it generally equates to two days of salary per month of service. For fixed-term contractors, employees will usually need to pay for the time left on the contract when dismissing prior to completion.
Notice of termination is usually 30 days or more.
Taxation in Bahrain
Bahrain does not have a personal income tax. There are also no general corporate taxes for most companies. However, employers must pay a 3% tax on the salaries of employees.
Employees must pay 1% of salaries toward unemployment insurance and 6% for social security. Employers must pay 9% of salaries for social security.
Health coverage in Bahrain
Bahrain has a public healthcare system, but foreign nationals may not qualify for coverage so should always get private insurance. Some employers choose to offer private medical insurance as an employee benefit, but it is fairly uncommon.
Bahrain compensations & benefits
Compensation laws in Bahrain
There is no mandatory minimum wage in Bahrain for private-sector employees.
Benefit management in Bahrain
Setting up a benefits system for your employees in Bahrain can be confusing if you are not familiar with the nation’s complex labor laws, language, and cultural differences, so it is common to experience delays.
Outsourcing your benefit management process ensures that you fully understand and adhere to the rules, ensuring your compliance and speeding up the process significantly. At Horizons, our Bahrain employment experts will help you to find and arrange your benefits, advise on your strategy, and ensure compliance with the law.
Horizons helps businesses expand into Bahrain faster
Horizons’ Bahrain-focused PEO, employer of record, and payroll outsourcing services pro your company with everything you need to commence your Bahraini operation quickly and compliantly. Our experienced team will ensure that you are all set to trade in Bahrain in as little as 48 hours, and could save you more than 80% in expenditure, even if you haven’t established a Bahraini entity.
Our experts will manage your company’s payroll, benefits, and expenses in Bahrain. Additionally, we can oversee HR duties, as well as employment and tax compliance. And as the only global PEO with an in-house recruitment team, Horizons will source, hire, and onboard your local workforce.
Contact us today to discover how our Bahraini-specific services can support your expansion.