Bahrain Sets Economic Substance Return Filing Period for 2025 Financial Year

On 26 October 2026, Bahrain's Ministry of Industry and Commerce (MOIC) issued a circular pursuant to Ministerial Order No. (106) of 2018, which governs the Economic Substance Regulations (ESR). The circular mandates that all entities within the scope of the ESR must file their Economic Substance Return for the financial year ended 2025 exclusively via the International Tax Information Exchange System (ITIES) portal.

The filing window is explicitly set from 26 October 2026 through 26 November 2026. Entities are required to complete their submissions within this period to demonstrate compliance with the ESR requirements.

The circular also reiterates the list of ESR-relevant activities as defined under Ministerial Order No. (106) and provides links to essential resources, including a guide for registering on the ITIES portal and an ESR-ITIES Compliance Guide. These resources outline the data and documentation entities must provide to satisfy MOIC's compliance expectations.

Ministerial Order No. (106), which introduced Bahrain's ESR framework, aligns with the European Union's Criterion 2.2 and the OECD's Base Erosion and Profit Shifting (BEPS) Action 5 minimum standard. The regulations target geographically mobile business activities to prevent profit shifting to low or no-tax jurisdictions. Entities conducting one or more relevant activities must meet enhanced economic substance criteria to comply.

The circular emphasizes that entities must register on the ITIES portal, obtain MOIC approval, and file their Economic Substance Return entirely through this platform.

A non-exhaustive list of relevant activities subject to ESR compliance is included in the circular, reflecting the scope of businesses required to file.

- Confirm their ESR scope based on activities registered with Sijilat, Bahrain's online commercial registration portal.

- Complete ITIES portal registration promptly to allow sufficient time for MOIC approval within the filing window.

- Prepare supporting documentation and ensure that reported data aligns with Sijilat records and financial statements before the 26 November 2026 deadline.

Failure to comply with ESR obligations under Ministerial Order No. (106) may result in enforcement actions, including warning notices, suspension of commercial registration certificates, penalties, and potential criminal prosecution.

This announcement serves as a critical reminder for entities operating in Bahrain to adhere strictly to the ESR filing requirements to maintain regulatory compliance and avoid sanctions.

Disclaimer: The information provided herein is general and does not constitute legal, accounting, or tax advice. Entities should consult their professional advisors to address their specific circumstances. Ernst & Young LLP disclaims any obligation to update this information in response to changes in laws or regulations.