Hire in Bahrain through our Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that takes on the legal and administrative responsibilities of employing workers on behalf of another company. This arrangement allows businesses to hire employees in countries where they don't have a legal entity, effectively expanding their global reach without the need to establish a local subsidiary.

For a country like Bahrain, with its strategic location and growing economy, EORs play a crucial role in facilitating international business operations and attracting foreign investment. They provide a streamlined solution for companies looking to tap into Bahrain's diverse workforce and expanding market opportunities.

How Does EOR Work?

The EOR model operates through a series of interconnected steps:

1. Client partnership: A company partners with an EOR to hire employees in Bahrain.

2. Legal employment: The EOR becomes the legal employer of record for the workers in Bahrain.

3. Payroll management: The EOR handles all payroll-related tasks, including salary calculations, tax withholdings, and benefit deductions.

4. Compliance oversight: The EOR ensures compliance with Bahrain's labor laws, tax regulations, and employment standards.

5. HR support: The EOR provides HR-related services, such as onboarding, leave management, and performance reviews.

6. Risk mitigation: The EOR assumes legal responsibility for employment-related risks and liabilities.

Throughout this process, the client company maintains control over the day-to-day work and responsibilities of the employees, while the EOR manages the administrative and legal aspects of employment.

Benefits of Using an EOR

Employing an EOR in Bahrain offers numerous advantages for businesses:

1. Rapid market entry: Companies can quickly establish a presence in Bahrain without the need to set up a local entity.

2. Compliance assurance: EORs stay up-to-date with Bahrain's evolving labor laws and regulations, ensuring full compliance.

3. Cost-effectiveness: Businesses can avoid the expenses associated with establishing and maintaining a local subsidiary.

4. Risk reduction: EORs assume legal responsibility for employment-related risks, protecting the client company.

5. Local expertise: EORs provide valuable insights into Bahrain's business culture, labor market, and employment practices.

6. Flexibility: Companies can easily scale their operations up or down without the complexities of managing a local entity.

7. Focus on core business: By outsourcing employment administration, companies can concentrate on their primary business activities.

8. Access to talent: EORs facilitate hiring local talent in Bahrain, tapping into the country's diverse workforce.

9. Simplified global expansion: EORs make it easier for companies to expand into multiple countries simultaneously.

10. Time savings: The EOR handles time-consuming HR and payroll tasks, freeing up resources for the client company.

By leveraging an EOR's services, businesses can navigate the complexities of Bahrain's labor market with greater ease and efficiency, allowing them to focus on growth and innovation in this dynamic Gulf nation.

Bahrain's employment landscape is a dynamic blend of tradition and modernity, shaped by its young population, growing workforce, and strategic focus on developing a knowledge-based economy. The country's high literacy rate and emphasis on education have produced a skilled labor pool, with many Bahrainis holding university degrees. While the service sector, particularly finance and tourism, dominates the job market, Bahrain is also nurturing growth in technology and manufacturing industries.

Overview of Labor Laws

Bahrain's labor laws aim to protect both employees and employers while promoting a fair and productive work environment. Key aspects include:

• A standard 48-hour workweek with at least one day off
• Mandatory annual leave and public holidays
• Maternity leave provisions for working mothers
• Regulations on termination and end-of-service benefits
• Non-discrimination policies in hiring and workplace practices

These laws apply to both Bahraini nationals and expatriate workers, ensuring a level playing field in the labor market.

Cultural Considerations

Understanding Bahraini culture is crucial for successful employment relationships:

• Family-centric values: Employers should be flexible with time-off requests for family events
• Communication styles: Indirect communication is common; pay attention to non-verbal cues
• Hierarchical structures: Respect for seniority and use of professional titles is important
• Religious observances: Work schedules often accommodate prayer times and Ramadan
• Gender dynamics: While progressing, traditional gender roles may still influence some workplaces

Adapting to these cultural norms can greatly enhance workplace harmony and productivity.

Challenges of Direct Hiring

Direct hiring in Bahrain can present several challenges:

1. Navigating complex labor laws and regulations
2. Understanding and adhering to cultural nuances in the workplace
3. Managing the process of obtaining work visas for expatriate employees
4. Ensuring compliance with Bahrainization policies that promote local employment
5. Adapting to the hierarchical nature of Bahraini business culture
6. Bridging potential language barriers, especially in sectors with a high expatriate presence
7. Addressing skill gaps between educational outcomes and industry needs

These challenges underscore the importance of thorough preparation and local expertise when engaging in direct hiring in Bahrain. Many companies find that partnering with a global Employer of Record like Rivermate can help navigate these complexities more efficiently.

Bahrain's payroll and tax system is designed to support social welfare programs while maintaining a competitive business environment. The country's approach to taxation is relatively straightforward, with no personal income tax for employees and a focus on social insurance contributions from both employers and employees. This system ensures that workers are protected through various social benefits while keeping the tax burden relatively low.

Employer Contributions

Employers in Bahrain play a crucial role in funding the country's social insurance system. Their contributions are essential for maintaining a robust social safety net for employees. Here's a breakdown of the main employer contributions:

Social Insurance Contributions

Employers are required to contribute to the Social Insurance Organization (SIO) for both Bahraini and expatriate employees. The contribution rates differ based on the employee's nationality:

• For Bahraini employees: 12% of the employee's gross salary
• For expatriate employees: 3% of the employee's gross salary

These contributions are due monthly and must be remitted to the SIO. They fund various social benefits, including pensions, disability support, and unemployment insurance.

Work Injury Insurance

In addition to SIO contributions, employers must also contribute towards work injury insurance. The rates for this insurance are:

• 3% of Bahraini employees' salaries
• 1% of expatriate employees' salaries

This insurance provides coverage for employees in case of work-related injuries or illnesses.

Other Potential Contributions

Depending on the nature and size of the business, employers may be subject to additional contributions:

1. Municipal Fees: These vary based on the company's location and activities.
2. Training Levy: Companies with over 50 employees that do not provide sufficient training may be required to pay a training levy of 3% of their annual payroll.

Employee Contributions

While Bahrain does not impose personal income tax on employees, workers are still required to contribute to the social security scheme. These contributions ensure that employees have access to various social benefits. Here's an overview of employee contributions:

Social Insurance Contributions

Employees contribute to the Social Insurance Organization (SIO) at the following rates:

• Bahraini employees: 7% of the gross salary
• Expatriate employees: 1% of the gross salary

These contributions are typically withheld directly from the employee's paycheck by their employer. The funds go towards old age, disability, death, and unemployment benefits.

Work Injury Insurance

Although employers are primarily responsible for work injury insurance, employees may see a 1% contribution reflected on their pay stub as part of this insurance scheme.

Additional Deductions

Employees may have other deductions from their salaries, which are usually voluntary in nature:

1. Pension schemes: Some employees may choose to contribute to additional pension plans.
2. Savings plans: Voluntary savings programs offered by employers or financial institutions.
3. Union dues: If applicable, employees who are members of labor unions may have union fees deducted from their salaries.

It's important to note that these additional deductions are typically optional and subject to the employee's consent.

By understanding the payroll and tax system in Bahrain, both employers and employees can ensure compliance with local regulations and make informed decisions about their financial responsibilities and benefits.

Bahrain offers a comprehensive set of employee benefits, balancing mandatory requirements with optional perks to create an attractive work environment. As an Employer of Record (EOR), Rivermate expertly navigates these benefits, ensuring compliance with local labor laws while helping companies provide competitive packages to attract and retain top talent. By managing both mandatory and optional benefits, an EOR simplifies the complexities of employment in Bahrain, allowing businesses to focus on their core operations.

Mandatory Benefits

• Annual leave of 30 days per year, accruing at 2.5 days per month
• Paid leave for all official public holidays
• Sick leave as per employment contract or company policy
• 60 days of paid maternity leave for female employees
• End-of-service benefits, including:
  • Pre-funding contributions to the Social Insurance Organization (SIO) for non-Bahraini employees
  • End-of-service indemnity upon employment termination

Optional Benefits

• Financial security and retirement savings:

  • Salary sacrifice schemes
  • Matched savings plans

• Health and wellness:

  • Enhanced health insurance plans (e.g., dental and vision coverage)
  • Employee Assistance Programs (EAPs)
  • Wellness programs and fitness subsidies

• Work-life balance and family support:

  • Flexible work schedules
  • Remote work options
  • Compressed workweeks
  • Childcare assistance
  • Tuition reimbursement or educational assistance

• Additional perks:

  • Company cars or transportation allowances
  • Housing allowances or subsidized housing options
  • Employee discounts on company products or services

By offering a mix of these mandatory and optional benefits, employers in Bahrain can create a compelling employee value proposition, fostering a motivated and productive workforce. As an EOR, Rivermate ensures seamless implementation and management of these benefits, allowing companies to provide competitive packages while maintaining full compliance with local regulations.

Terminating an employee's contract and managing the offboarding process in Bahrain requires careful attention to legal requirements and best practices. This process ensures a smooth transition for both the employer and the employee while maintaining compliance with local labor laws.

Understanding Termination in Bahrain

In Bahrain, employers can terminate an employee's contract for various reasons, including:

• Gross misconduct
• Underperformance
• Redundancy
• Completion of a fixed-term contract
• Employee resignation

Regardless of the reason, it's crucial to follow proper procedures to avoid legal complications.

Notice Requirements

When terminating an employee in Bahrain, employers must provide a minimum notice period of 30 days, as stipulated by Article 99 of the Labour Law. However, employment contracts may specify longer notice periods, which must be respected. The termination notice should be:

• In writing
• State the reason for termination
• Include the effective date

Severance Pay

Bahraini labor law mandates severance pay in certain situations:

• For indefinite contracts terminated without cause after three months of employment: Two days' wages for each month of service (minimum one month's wages, maximum twelve months' wages)
• For fixed-term contracts terminated before expiration: Severance pay is required

However, severance pay may not be necessary in cases of gross misconduct by the employee.

Offboarding Process

To ensure a smooth transition, consider the following steps in your offboarding process:

1. Conduct an exit interview
2. Retrieve company property (e.g., laptops, access cards)
3. Revoke access to company systems and accounts
4. Process final paycheck, including any outstanding wages and severance pay
5. Provide necessary documentation (e.g., certificate of employment)
6. Update internal records and inform relevant departments

Additional Considerations

Be aware that some industries or companies may have additional termination provisions in their collective bargaining agreements. For more information on labor laws in Bahrain, consult the Bahraini Labour Market Regulatory Authority (LMRA) resources.

By following these guidelines and staying informed about local labor laws, employers can navigate the termination and offboarding process in Bahrain effectively and professionally.

Bahrain, a small island nation in the Persian Gulf, has become an attractive destination for foreign workers due to its growing economy and diverse job opportunities. For those considering employment in Bahrain, understanding the visa and work permit requirements is essential. Here's a concise overview of what foreign workers need to know:

Entry Visa

Most foreign nationals require an entry visa to enter Bahrain. Depending on your nationality, you may be eligible for a visa on arrival or need to apply for one in advance through a Bahraini embassy or consulate.

Work Visa

To work legally in Bahrain, foreign nationals must obtain a work visa. This process typically involves the following steps:

1. Job offer: Secure a job offer from a Bahraini employer.
2. Employer sponsorship: Your employer must sponsor your work visa application.
3. Documentation: Prepare necessary documents, including a valid passport, educational certificates, and professional qualifications.
4. Medical examination: Undergo a medical examination in your home country or upon arrival in Bahrain.

Work Permit

Once you have a work visa, your employer will apply for a work permit on your behalf. This permit is usually valid for two years and can be renewed.

Residence Permit

Foreign workers staying in Bahrain for an extended period must obtain a residence permit, which is typically processed alongside the work permit application.

Important Considerations

• Processing times for visas and permits can vary, so it's advisable to start the application process well in advance of your intended start date.
• Some professions may require additional certifications or approvals from relevant Bahraini authorities.
• It's crucial to comply with all visa and permit regulations to avoid legal issues or deportation.

By understanding and following these requirements, foreign workers can ensure a smooth transition to working life in Bahrain. Always consult with your employer or a legal professional for the most up-to-date and specific information regarding your situation.