Bahrain: 0% income tax, residency through real estate

Bahrain does not apply general taxation of personal income or corporate profits, nor any withholding tax. The applicable rate is 0%¹ for individuals and 0%² for companies.

Two exceptions remain: the hydrocarbons sector, which has its own regime, and the global minimum tax, introduced for multinational groups within its scope.

The real tax burden falls on consumption: value added tax has applied at the standard rate of 10%³ since 1 January 2022, after being introduced at a lower rate and then doubled.

This trajectory is the most reliable signal available on the direction of Gulf public finances: the tax burden is shifting from income to consumption.

For a French national, the rule remains unchanged whatever these particularities: the absence of local tax does not end French tax domicile. As long as the household or the centre of economic interests remains in France, article 4 B of the code général des impôts (French General Tax Code) continues to apply.

Residence has traditionally relied on employer sponsorship, but the kingdom has opened an independent route based on property ownership, administered by the national authority regulating residence.

This so-called self-sponsorship permit is open to owners of a property worth at least BHD 50,000⁴, or about about $132,000⁵.

This threshold is an order of magnitude lower than in the Emirates, where it stands at from AED 2,000,000⁶, or about about €520,000⁷, or in Qatar, at QAR 730,000⁸.

This is the main argument for the Bahraini scheme: it makes the Gulf accessible to moderate wealth, which is unusual in the region.

Two caveats apply. The property must be located in an area open to foreign ownership, and keeping it is a condition for retaining the permit.

Supply is concentrated in a few developments designed for international buyers, mainly on artificial islands and in Manama's business districts. The number of developers is limited.

The narrowness of the market has a direct consequence for liquidity: a property bought at the permit threshold is mainly resold to another applicant for the same scheme. The property's value is therefore linked to the regime's appeal.

One feature specific to the kingdom is worth noting: Bahrain is linked to Saudi Arabia by a causeway, and part of the property demand comes from residents living or working on either side. This dependence on its neighbour is a market factor in its own right.

We do not publish Bahraini registration fees, service charges or the list of areas open to foreign ownership: they do not appear in our verified sources.

1. Check that the target property is in an open area and reaches the BHD 50,000⁴ threshold.
2. Obtain the permit and then the identity card, which is required to open a bank account.
3. Take out the compulsory health insurance.
4. Do not confuse the residence permit with a tax residency certificate, which must be obtained separately.
5. Deal with the departure from France according to its own criteria.

We do not publish the tax residency criteria used under Bahraini law or the conditions for issuing a certificate: they do not appear in the sources we have been able to consult. Yet this is the document on which the application of any treaty depends.

Bahrain therefore holds a particular place in the region: more socially open, cheaper, more accessible, but also more dependent on its neighbours and further along in the transition to consumption-based taxation. For an expatriate, the cost of entry is modest and the quality of life real; for an investor, the market is narrow and its valuation depends largely on decisions taken elsewhere.