Chat with us

Bahrain – Employer of Record

EWS helps you to hire an international workforce quickly and compliantly, without setting up a legal entity locally. If you’d like to get in touch about our employer of record solution in Bahrain, click here

Country Introduction – Bahrain

Capital –  Manama City
Currency –  Bahraini Dinar
GDP –  $44.17 Billion USD (2022)
People/Nationality- Bahraini
Language –  Arabic
Major Religions –  Islam and Christianity
Population – estimated 1,823,523 Million as of July 2022

Bahrain is an archipelago in the Middle Easta with thirty-three islands. It is located off the coast of Saudi Arabia and Qatar. Bahrain has a strategic location in the Persian Gulf, through which much of the Western world’s petroleum must transit to reach the open ocean. It is renowned for its verdant groves of date palms and gorgeous pearls; since ancient times it has been an entrepôt for trade and a source of natural resources for the surrounding area.

Bahrain represents an attractive avenue to explore. Over USD32 billion dollars have been invested in infrastructure, property and regulatory initiatives, which are in advanced stages of progress. Additionally, certain target sectors are prioritized to drive further foreign investment. Prime opportunities exist in the financial services, manufacturing, logistics, tourism, real estate, healthcare, education and technology. An added benefit to businesses is the fact that there are no restrictions on capital repatriation, currency exchange or transfer of dividends.

Contract of Employment

Unlike some other GCC (Gulf Cooperation Council) countries, Bahrain does not require the signing of a government contract. However, the contract entered between the employer and the employee must be registered with the Labour Market Regulatory Authority (LMRA) to obtain the employee’s work permit and residence visa. Under the Labour Law, the contract should be in Arabic, but in practice, where contracts are drafted in another language, an Arabic-translated version may be attached to fulfill this requirement. Any contractual changes should be notified to the LMRA and amended on the filed employment contract copy.

Probation Period

 Generally, a duration of 3 months is allowed, although this may be increased up to a maximum of 6 months due to the unique requirements of certain occupations.


An employee may be terminated without notice or compensation in certain situations, including where the employee has assumed a false identity, fraud, non-compliance with written instructions and does not attend the workplace without legitimate cause.

An employer is obliged to serve a termination notice should it wish to dismiss an employee. As per the Bahraini Labour Law, the notice period must not be less than 30 days. However, the employers are bound to follow a longer notice period if it is stated in the employee’s contract.

Working Hours

Usual work hours in Bahrain is 8 hours plus an hour break for 5-6 days a week, primarily depending on which industry an employee belongs.


Overtime hours should not exceed 2 hours per day. The employee shall receive for each additional working hour a wage equivalent to his due wage plus at least 25 % for hours worked during the day, and at least 50% for hours worked during the night.

Annual Leave

Employees are generally entitled to 30 calendar days of annual paid leave after one year of service. During the first year of employment, the employee is entitled to take accrued vacation, which for all employees accrues at a rate of 2 1/2 days per month.

Sick leave

An employee is granted leave in case of sickness, provided they present a valid medical absence report from a certified doctor. The total amount of leave granted is 24 working days equivalent to two days per month.

Maternity Leave

The start of maternity leave should be no earlier than forty-five (45) days prior to the expected date of childbirth and you should have maternity leave of at least sixty (60) days after childbirth. Maternity leave is available to eligible Philippines-based employees regardless of nationality or marital status.

The maternity leave period is counted in calendar days, inclusive of Saturdays, Sundays, and holidays. This is in consonance with the rule that maternity leave should be availed of in a continuous and uninterrupted manner.


Bahrain’s standard VAT rate is 10%.

Income Tax

There are no taxes in Bahrain on income, sales, capital gains, or estates, with the exception, in limited circumstances, to businesses (local and foreign) that operate in the oil and gas sector or derive profits from the extraction or refinement of fossil fuels (defined as hydrocarbons) in Bahrain.

Employer/Employee Contributions

The current rate of contributions to the SIO is 19% for local employees (12% employer; 7% employee) and 4% for expatriate employees (3% employer; 1% employee). These contributions to the SIO are to be withheld by the employer and remitted to SIO monthly.

For companies operating a multi-country payroll, it is important to note that the concept of tax residence is not recognised in Bahrain. Social insurance and pensions are paid in Bahrain, administered by the SIO (Social Insurance Organization).

Public Holidays

There are 12 public holidays in Bahrain:

–  New Year
–  May Day/Labour Day
–  Eid al Fitr
–  June Solstice
–  Arafat Day
–  Eid al Adha
–  Muharram
–  Ashoora
–  September Equinox
–  The Prophet’s Birthday
– National Day
–  December Solstice

Severance Pay

Entitlement of the separation pay in Bahrain is equivalent to one-month salary or at least one-month salary for every year of service, whichever is higher. A fraction of at least six months shall be considered as one whole year. The period of service is deemed to have lasted up to the time of closure of the company.

Employees terminated under probation are generally entitled to receive two days of wages for each month served, with a minimum of one month pay and a maximum of 12 months of pay, regardless of whether the termination was for cause.

Work and Residence Permits (Expatriates)

Work and Residence visas are duly processed through the Bahraini Labour Market Regulatory Authority (LMRA), they issue all visas before expats arrive in the country. As the necessary documentsare submitted, employees will also need to complete certain steps. In addition to providing a medical report, employees should show academic or professional qualifications for the position. Bahrain typically processes all work visa applications in around 15 business days, but delays could take up to four weeks.

After the employees get their work permit, they’re automatically entitled to live in Bahrain. All family members will need a family visa, but the visa does not apply to extended family members. When applying for a family visa, your employees will need to apostille their documents, including their birth certificate, marriage certificate, and educational degree certificate.

Other requirements are as follows:

–  A completed visa application form.
–  The employee’s passport.
–  A passport-size photo.
–  Copy of the contract with the employee’s name, birth date, and nationality.
–  Health record from an authorised clinic.

Interested in global expansion? click here

  • share on Facebook
  • share on Twitter
  • share on LinkedIn

Related Blogs