💡 Why PE Matters
While Bahrain has no income tax, PE status triggers VAT registration obligations. A foreign company with a PE in Bahrain must register for VAT if turnover exceeds BD 37,500. Under Pillar Two, PE status also affects GloBE income allocation.
PE Types
🏢 Fixed Place PE
An office, factory, workshop, or warehouse in Bahrain through which business is conducted. Virtual offices and serviced offices may also create PE if used regularly and exclusively.
👤 Agency PE
A person in Bahrain who habitually concludes contracts on behalf of the foreign company. Sales agents, distributors with negotiation authority. Commissionaire arrangements may be caught.
🔧 Service PE
Employees or consultants providing services in Bahrain for more than 6 months in any 12-month period. Many DTTs include a specific service PE provision with varying thresholds.
🏗️ Construction PE
Building site, construction, or installation project exceeding 6 months (domestic law) or 12 months (many DTTs). Subcontractor time counts towards the threshold.