Buying and owning property in Bahrain as a foreigner

Authored by the expert who managed and guided the team behind the Bahrain Property Pack

Everything you need to know before buying real estate is included in our Bahrain Property Pack

Who is the author of this content?

SANDS OF WEALTH

A team specialized in real estate investing in MENA countries (Morocco, UAE, Oman, etc.)

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Bahrain. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At Sands of Wealth, we explore the Bahraini real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Manama, Seef, and Amwaj Islands. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What types of properties can foreigners buy in Bahrain, and are there any restrictions compared to locals?

Foreigners can purchase freehold properties in Bahrain, but only within government-designated zones.

The approved areas include Amwaj Islands, Seef, Durrat Al-Bahrain, Juffair, Bahrain Bay, Bu Ghazal, Northern Manama, and Dannat Hawar. Within these zones, foreign investors can buy both residential properties (apartments and villas) and commercial properties with full ownership rights.

Bahraini nationals, however, enjoy unrestricted property ownership throughout the country. This gives locals significantly broader access to real estate opportunities compared to foreign buyers, who are limited to these specific freehold developments.

The restriction exists to balance foreign investment opportunities with protecting certain areas for local ownership. As of September 2025, these designated zones represent some of the most modern and well-developed areas in Bahrain, offering high-quality amenities and infrastructure.

It's something we develop in our Bahrain property pack.

Do you need to meet any specific residency or visa requirements to purchase property in Bahrain?

No specific residency or visa status is required to purchase property in Bahrain as a foreigner.

You can buy property regardless of your current visa situation or whether you live in Bahrain. However, property ownership opens the door to residency benefits. Foreign property owners can apply for a self-sponsorship residency permit, typically valid for five years and renewable.

To qualify for this residency permit, the property must meet minimum value thresholds, generally BHD 200,000 or more. This residency permit allows you to sponsor your spouse and children, making it an attractive option for families looking to relocate.

The residency permit is not automatically granted but requires a formal application process through the relevant government authorities. This Golden Residency program has made Bahrain increasingly attractive to international investors seeking both property investment and long-term residency options.

Is it necessary to be physically present in Bahrain to buy property, or can the process be done remotely?

Physical presence in Bahrain is not strictly necessary to complete a property purchase.

Many international buyers successfully complete transactions remotely through legal representation and properly notarized documents. However, you will need to ensure all documentation meets legal requirements, including original signatures where necessary.

A power of attorney can be established to allow your legal representative to handle the property transfer on your behalf. This must be properly executed and may require notarization in your home country or at a Bahraini consulate.

While remote purchase is possible, having trusted local legal representation becomes even more critical when you're not physically present to oversee the process. Many buyers choose to visit Bahrain at least once during the process to view properties and meet with their legal team, even if the final paperwork can be completed remotely.

What are the fiscal implications of owning property in Bahrain, such as taxes or fees on rental income or capital gains?

Bahrain imposes a 10% municipal tax specifically on properties owned by non-Bahrainis.

This annual tax represents the primary fiscal obligation for foreign property owners. Importantly, Bahrain does not levy income tax or capital gains tax on property transactions, making it relatively tax-friendly for international investors.

Rental income from your property is not subject to income tax, allowing you to keep the full rental yield from your investment. However, you should budget for periodic maintenance charges and service fees associated with property management.

Registration fees range from 1.5% to 3% of the property's value, depending on the type and price of the property. These are one-time costs paid during the purchase process. The absence of capital gains tax makes Bahrain particularly attractive for investors planning to sell their properties in the future.

What is the step-by-step process to purchase property in Bahrain, and what documents will you need to provide?

Step	Action Required	Documents/Details
1. Research & Selection	Choose property in freehold zone	Property must be in designated area
2. Legal & Financial Preparation	Engage lawyer and secure financing	Legal representation recommended
3. Reservation Agreement	Sign initial agreement	10% deposit typically required
4. Due Diligence	Verify title and legal status	Property history and ownership verification
5. Sales Agreement	Finalize and notarize contract	Complete sales contract with all terms
6. Payment Completion	Transfer agreed funds	Full payment or mortgage arrangement
7. Registration	Register with Survey and Land Registration Bureau	Receive official title deed

Essential documents you'll need include a valid passport (with at least 6 months remaining), proof of residence, six months of bank statements, and valid health insurance in Bahrain.

For those seeking the Golden Residency permit, you'll need evidence of property investment equal to or exceeding BHD 200,000. All foreign documents may require translation and notarization.

Do you need a lawyer to buy property in Bahrain, or is it possible to handle everything without legal assistance?

While not legally mandated, using a real estate lawyer or professional agent is highly recommended for foreign buyers.

The complexity of property law, government approvals, and registration procedures makes professional legal assistance valuable for ensuring a smooth transaction. Lawyers can handle contract negotiations, due diligence, and government registrations on your behalf.

Professional representation becomes particularly important when dealing with developer agreements, verifying property titles, and ensuring all legal requirements are met. They can also help navigate any issues that arise during the purchase process.

Given the significant financial investment involved and the differences in legal systems, the cost of legal assistance is generally worthwhile insurance against potential problems. Many buyers who attempt to handle purchases independently encounter delays or complications that professional assistance could have prevented.

It's something we develop in our Bahrain property pack.

Which areas in Bahrain are popular among foreigners to settle, and what are the best neighborhoods for long-term living or renting out?

The most popular areas for foreign settlement are Amwaj Islands, Seef, Durrat Al-Bahrain, Juffair, Bahrain Bay, Bu Ghazal, Northern Manama, and Dannat Hawar.

Amwaj Islands stands out as particularly attractive to expatriates, offering waterfront living, modern amenities, and a resort-like atmosphere. The area features high-end restaurants, shopping centers, and recreational facilities, making it ideal for both long-term residence and vacation rentals.

Seef is known for its proximity to major shopping malls, business districts, and easy access to both Manama and the airport. This makes it highly suitable for professionals and families, with strong rental demand from both long-term residents and business travelers.

Juffair offers urban convenience with numerous dining and entertainment options, while Bahrain Bay provides luxury waterfront living with stunning views. These neighborhoods consistently show strong rental yields due to their popularity among the substantial expatriate community working in Bahrain's financial and business sectors.

What are the areas in Bahrain with the best potential for capital appreciation, high rental yields, and solid rental income?

Amwaj Islands, Durrat Al-Bahrain, Seef, and Juffair represent the strongest investment opportunities for both capital appreciation and rental yields.

Amwaj Islands continues to show robust demand due to its unique waterfront lifestyle and limited supply of similar developments. The area attracts high-income expatriates willing to pay premium rents, resulting in strong rental yields and steady capital appreciation.

Seef benefits from its central location and proximity to business districts, maintaining consistent rental demand from professionals and families. The area's infrastructure development and ongoing commercial projects support long-term capital growth prospects.

Waterfront and luxury developments across these areas demonstrate the strongest performance metrics. Bahrain's growing reputation as a business and financial hub, combined with its strategic location in the Gulf, continues to drive demand for quality residential properties in these premium locations.

As of September 2025, rental yields in these areas remain competitive compared to regional markets, supported by Bahrain's stable political environment and business-friendly policies.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Bahrain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Can you provide a breakdown of property prices by city or region, including the cost per square meter?

Area	Property Type	Price Range (BHD per sqm)
Amwaj Islands	Apartments	900 - 1,300
Seef	Apartments	800 - 1,200
Juffair	Apartments	750 - 1,100
Durrat Al-Bahrain	Apartments	850 - 1,250
Bahrain Bay	Apartments	950 - 1,400
Luxury Waterfront Villas	All Premium Areas	1,500 - 3,000+

As of September 2025, apartment prices in the most popular foreign-friendly areas range from BHD 750 to BHD 1,400 per square meter, with luxury waterfront villas commanding significantly higher prices.

Amwaj Islands and Bahrain Bay represent the premium end of the market, with waterfront properties commanding the highest prices due to their unique locations and amenities. Seef and Juffair offer more moderate pricing while still providing excellent access to amenities and business districts.

These prices reflect the current market conditions and vary based on specific location within each area, property condition, amenities, and view quality. Waterfront properties and those with marina access consistently command premium pricing across all areas.

What are some classic mistakes and pitfalls that foreigners should avoid when purchasing property in Bahrain?

The most common mistake is assuming foreign ownership is permitted anywhere in Bahrain, when it's actually restricted to specific designated zones.

1. **Failing to verify approved zones**: Always confirm your chosen property is within a government-designated freehold area2. **Skipping professional legal assistance**: Not using qualified lawyers or real estate professionals leads to costly oversights3. **Overlooking ongoing costs**: Underestimating the 10% municipal tax, utility fees, and maintenance charges in budget calculations4. **Inadequate due diligence on developers**: Not verifying developer credibility and project completion status before purchase5. **Misunderstanding residency requirements**: Assuming property purchase automatically grants residency without proper application procedures

Many buyers also fail to properly research the rental market before purchasing investment properties, leading to unrealistic yield expectations. Additionally, not understanding the specific terms and renewal requirements for residency permits can create complications later.

Currency fluctuation risks should also be considered, as many buyers finance purchases in their home currency while property values and rental income are in Bahraini Dinars.

Is it possible for foreigners to get a mortgage in Bahrain, and what are the typical interest rates, conditions, and tips for securing one?

Yes, foreigners can secure mortgages in Bahrain, though terms and availability depend on individual bank policies and your financial profile.

Typical down payment requirements range from 20% to 30% of the property value, with interest rates generally between 4% and 7% depending on the bank and applicant's creditworthiness. Banks typically require proof of stable income, employment history, and comprehensive financial documentation.

Your debt-to-income ratio will be carefully evaluated, and banks prefer applicants with established banking relationships in Bahrain or the region. Having a local bank account and demonstrating financial stability in the country can improve your mortgage prospects.

Some banks offer specific mortgage products designed for expatriates, which may have different terms than standard local mortgages. Shop around with multiple banks, as terms and approval criteria can vary significantly between institutions.

It's something we develop in our Bahrain property pack.

What taxes, fees, and additional costs are associated with purchasing property in Bahrain, and what should buyers expect when reselling?

Property purchase in Bahrain involves several fees beyond the property price itself.

Registration fees range from 1.5% to 3% of the property value, paid as a one-time cost during the purchase process. The 10% annual municipal tax applies specifically to foreign-owned properties and represents an ongoing obligation.

Additional costs include attorney's fees (typically 1-2% of property value), real estate broker commissions (usually 2-3%), government approval processing fees, and utility connection charges. These costs can add 5-8% to your total investment.

When reselling, expect to pay transfer fees, real estate agent commissions (typically 2-3% of sale price), and potential legal fees for handling the transaction. The absence of capital gains tax in Bahrain means you keep the full profit from property appreciation.

Budget for ongoing costs including property management fees if you're not resident in Bahrain, insurance premiums, and regular maintenance expenses. These ongoing costs should be factored into your investment calculations, particularly for rental properties.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Bahrain Company Formation - Buy Property in Bahrain
2. Arab MLS - Can a Foreigner Buy Property in Bahrain
3. Sands of Wealth - Moving to Bahrain to Buy Property
4. Iris WLL - Expatriate Housing in Bahrain
5. Property Finder Bahrain - Property Buying Guide
6. Sands of Wealth - Bahrain Real Estate for Foreigners
7. Sovereign Group - Bahrain Golden Residency
8. IMI Daily - Bahrain Golden Residence