Fama Accounting Services, Office 2294, Building 574 Road 31 Block 611 Al Hamriya, Bahrain
Fama Accounting Services, Office 2294, Building 574 Road 31 Block 611 Al Hamriya, Bahrain
Why Construction Accounting in Bahrain Is Different?
Construction is unlike any other industry in Bahrain. Whether you’re a contractor working on government infrastructure, a private developer building residential towers, or a subcontractor supplying materials, your finances are more complex than a standard business. Unlike retail or services, construction companies deal with:
Project-based accounting (each project is its own profit center).
Work-in-progress (WIP) tracking (to measure percentage of completion).
Retention accounting (withholding part of payment until project completion).
Cost overruns & variations (materials, labor, imports).
VAT on progress billing, subcontractors, and imports.
Without specialized accounting services, many construction firms in Bahrain face cash flow crises, VAT fines, and audit risks. That’s where we come in — offering construction-focused accounting and financial management tailored to the Bahraini market.
📲 Call/WhatsApp +97333733381 (Click Here) to protect your projects from hidden financial risks.
👉 Related Service: Accounting in Bahrain
Specialized Project Accounting, Cost Control, and Compliance Solutions for Builders, Contractors & Developers
Construction accounting is not just bookkeeping — it’s about matching project timelines, client payments, subcontractor invoices, and compliance deadlines. Here are the most common pain points we see:
Irregular Cash Flow – Payments often come late, while expenses (materials, salaries) are immediate.
Retention Money – Clients hold back 5–10% of contract value until final handover. Many businesses mismanage this.
Cost Overruns – Fluctuating steel, cement, and imported equipment prices.
Complex VAT – Applying VAT on milestone billing, subcontractor payments, and cross-border services.
Work in Progress (WIP) Accounting – Projects run over multiple years, making revenue recognition tricky.
Audit Trails – The NBR and auditors demand detailed financial evidence, especially on government contracts.
Failing to account for these properly can lead to profit leakage, VAT penalties, and disputes with clients or regulators.
A general accountant may handle routine bookkeeping, but construction requires industry-specific expertise:
Job Costing – Tracking labor, materials, equipment for each project.
Progress Billing – Managing milestone-based invoices.
Subcontractor Accounting – Ensuring VAT compliance on subcontractor payments.
Contract Variations – Adjusting revenue recognition for scope changes.
Equipment Depreciation – Managing machinery used across multiple projects.
👉 Related Service: VAT in Bahrain
Our accounting services ensure your construction firm stays compliant with Bahraini regulations while maximizing profitability.
We offer end-to-end accounting solutions designed for the construction sector:
Recording all project transactions.
Job costing for labor, materials, equipment.
Maintaining client and subcontractor ledgers.
Separate accounts for each contract.
Tracking profitability project-by-project.
Managing variations and claims.
VAT on milestone billing.
Handling retention VAT.
VAT on imports of raw materials.
Preparing and filing VAT returns with the NBR.
👉 Related Service: Audit in Bahrain
Monthly payroll processing for workers.
LMRA and GOSI compliance.
Cost allocation per project.
Work-in-progress (WIP) reporting.
Cash flow forecasting.
Budgeting and project financial health reports.
VAT in construction is not straightforward. Here’s where businesses go wrong:
Charging VAT incorrectly on advance payments.
Forgetting VAT on subcontractors’ invoices.
Misreporting VAT on retention money.
Claiming VAT refunds without proper documentation.
Since fines can reach 5,000 BHD for late or incorrect filing, we ensure error-free VAT returns and NBR compliance.
📲 WhatsApp us at +97333733381 (Click Here) to avoid VAT penalties.
👉 Related Service: VAT in Bahrain
One of the biggest mistakes contractors make is recognizing all income upfront, rather than spreading it across the project timeline. This leads to:
Overstated profits.
Higher-than-actual tax liability.
Confusing financial reports.
We use percentage-of-completion accounting so that your financials reflect the real progress of the project.
Construction companies in Bahrain are often subject to audits — both statutory audits and NBR VAT audits.
Our audit preparation ensures:
Every invoice is NBR-compliant.
Retention and milestone payments are properly recorded.
Financial statements meet IFRS standards.
👉 Related Service: Audit in Bahrain
✅ Local Expertise – Familiar with Bahrain’s tax, VAT, and audit rules.
✅ Construction Focus – Decades of experience with contractors and developers.
✅ End-to-End Support – From bookkeeping to VAT to financial reporting.
✅ Technology Driven – Use of Xero, QuickBooks, and ERP for project-based accounting.
✅ Regulatory Compliance – Always aligned with MoIC, NBR, and LMRA requirements.
Construction projects involve long timelines, milestone-based payments, and complex VAT rules. Specialized accounting ensures accurate job costing, cash flow management, and compliance with Bahrain’s tax and labor regulations.
Job costing tracks expenses, revenues, and profitability per project. It allows contractors to compare actual costs vs. budgeted costs, helping avoid cost overruns and pricing errors in future bids.
Standard 10% VAT applies to most construction services. VAT must be applied on milestone invoices and subcontractor charges. Some government-related projects may qualify for VAT exemptions.
👉 Related: VAT Services in Bahrain
Yes. Input VAT paid on materials, machinery, or subcontractor services can be reclaimed, provided proper invoices and NBR-compliant records are maintained.
Delayed milestone payments.
Cash flow gaps between expenses and receivables.
Retention payments held by clients.
VAT reconciliation with subcontractors.
Payroll compliance with LMRA and GOSI.
Yes. Even small contractors face VAT obligations, payroll compliance, and project-based cost tracking. Outsourcing accounting helps avoid penalties and improve profitability.
Retention is recorded as accounts receivable but recognized only when released. Specialized construction accounting ensures retention amounts are tracked accurately to avoid cash flow surprises.
WIP reports track ongoing project costs, billings, and completion percentages. They help contractors measure profitability mid-project and prevent under/over-billing.
Developers account for costs like land acquisition, design, and construction as capitalized assets until units are sold. Revenue is recognized upon delivery to buyers, aligned with IFRS standards.
Contractors focus on project costs, subcontractors, and progress billing.
Developers manage land value, financing, and unit sales recognition.
Both require tailored accounting methods.
Forecast inflows/outflows by project.
Monitor milestone billing schedules.
Negotiate supplier credit terms.
Ensure prompt VAT refunds.
Use professional cash flow modeling.
Yes, most companies need annual audits. Banks and investors often require audited financial statements before approving financing or project tenders.
👉 Related: Audit in Bahrain
Yes. We prepare audit-ready financials including WIP schedules, project cost reports, VAT reconciliations, and payroll records, ensuring smooth statutory audits.
We manage:
LMRA work permit compliance.
GOSI contributions for Bahraini employees.
Overtime & end-of-service benefits.
Multi-site labor cost allocation.
Yes. Housing allowances, travel reimbursements, and end-of-service benefits are accounted for under Bahrain labor law requirements.
QuickBooks – Best for contractors.
Xero – Cloud-based with project integrations.
ERP systems – For large developers with multiple projects.
Yes. We migrate your records into QuickBooks, Xero, or ERP systems, set up job costing, VAT modules, and train your team for smooth usage.
Project profitability reports.
WIP schedules.
Retention receivable reports.
Cash flow forecasts.
VAT reconciliation statements.
We record FX differences in compliance with IFRS, ensuring accurate cost reporting for imported equipment and supplies.
Yes. We track subcontractor invoices, apply VAT correctly, and reconcile payments against project budgets.
Advance payments are recorded as liabilities and gradually recognized against project costs, ensuring compliance with accounting standards.
We recommend monthly accounting services with quarterly financial reviews to stay compliant and catch cost overruns early.
Yes. We prepare payroll records, worker data, and compliance reports to ensure smooth LMRA audits with no penalties.
Yes. While Bahrain has no corporate tax (except for oil/gas), construction companies must comply with VAT laws and can optimize cash flow through smart VAT planning.
We track receivables, retention, and overdue invoices, providing clear documentation for legal or arbitration processes.
Yes. Accurate financial statements and profitability reports strengthen tender applications and improve credibility with clients.
Late VAT filing leads to 5,000 BHD penalties. We offer urgent VAT filing services to ensure compliance even under tight deadlines.
We record assets under fixed asset schedules, track depreciation, and ensure accurate valuation for financial reporting.
Yes. Our CFO advisors provide strategic financial planning, project financing support, and investor reporting for growing construction firms.
👉 Related: Accounting in Bahrain
📲 Contact us via WhatsApp +97333733381 (Click Here) to book a free consultation. We’ll assess your projects and recommend the best accounting solution for your construction business.
Construction companies in Bahrain face unique financial challenges. From VAT on milestone billing to work-in-progress accounting, one small mistake can cost thousands in penalties or lost profits.
With our specialized construction accounting services, you get:
Accurate project financials.
100% VAT compliance.
Cash flow control and profitability insights.
Audit-ready financial statements.
📲 Call/WhatsApp us now at +97333733381 (Click Here) for a free consultation.
👉 Explore related services:
Minimize risks and maximize growth with our comprehensive accounting solutions in Bahrain.
Below is an overview of our general pricing packages for our suite of services in Bahrain. Costs vary depending on factors such as the services we offer.
Read some reviews and success stories from our loyal customers who achieved their goals and how our expert solutions have made a lasting impact on their growth, compliance, and financial clarity. Your success is our greatest achievement!
Client
I am so happy to have chosen this company! Right from the start it was a very easy decision, I knew I am in the right hands. They contacted me with every update they had and always kept me up to date with all the information and steps that we will proceed next.
Client
Highly recommend for anyone looking to establish a company in Bahrain! Waqas Akram and his team made the entire process smooth and stress-free. They were incredibly knowledgeable, responsive, and handled every detail with professionalism.
Client
The team was highly professional, efficient, and knowledgeable. They ensured that all paperwork and procedures were handled smoothly, saving us both time and effort. I highly recommend their services to anyone looking out there.
Client
Abdullah and the team have been great in assisting me with related tasks. In challenging timeframes they've supported me to ensure our company operations can start in Bahrain without any issues. Thank you. I will recommed their services.
Client
I was extremely impressed with their services. Their expertise made everything smooth and hassle-free. I highly recommend Setup in Bahrain for anyone looking for their business here. Their professionalism and commitment to customer satisfaction are top-notch.
With years of experience and a highly qualified team, we bring unmatched expertise and in-depth knowledge of Bahrain’s financial landscape to every service we provide.
With the introduction of Value Added Tax (VAT) in Bahrain, businesses must ensure they are fully compliant with local regulations to avoid fines and maintain smooth operations. Our services ensure:
✅ Accurate VAT calculations and filings.
✅ Error-free bookkeeping for tax audits.
✅ Cost savings through VAT optimization strategies.
✅ Peace of mind knowing your financials are in expert hands.
✅ Improved business credibility and investor confidence.
✅ Seamless regulatory compliance for local and international operations.
Our services cater to businesses of all sizes and industries operating in Bahrain, including:
📌 Small & Medium Enterprises (SMEs) – Streamline accounting processes and tax compliance.
📌 Startups & Entrepreneurs – Affordable and efficient accounting solutions to manage finances.
📌 Retail & E-Commerce Businesses – VAT compliance for online and offline transactions.
📌 Construction & Real Estate Companies – VAT advisory on industry-specific transactions.
📌 Corporate Entities & Large Businesses – Advanced accounting strategies for profitability.
📌 Freelancers & Consultants – Hassle-free tax reporting and financial planning.
📌 Manufacturing & Trading Companies – Optimize VAT compliance on goods and imports.
📌 Service-Based Businesses – Financial management for professional service providers.
📌 Step 1: Consultation & Assessment – Understanding your business needs.
📌 Step 2: Implementation of Accounting & VAT Systems – Setting up cloud-based solutions.
📌 Step 3: Ongoing Compliance & Reporting – Monthly financial management and VAT filings.
📌 Step 4: Audit Support & Advisory – Ensuring full regulatory compliance and business growth.
📌 Step 5: Financial Analysis & Growth Planning – Helping businesses scale with strong financial planning.
🚨 Did you know? Businesses failing to comply with Bahrain’s VAT regulations can face penalties up to BHD 10,000 for late or incorrect filings! Our experts ensure:
✅ Timely VAT returns & error-free financial statements.
✅ Accurate record-keeping for VAT reclaims & audits.
✅ Guidance on VAT-exempt and zero-rated transactions.
✅ VAT risk assessment & compliance checks to avoid fines.
✅ Optimized tax strategies to enhance profitability.
✅ Assistance with government tax incentives and rebates.
🔹 Certified Accountants & VAT Specialists with deep industry expertise.
🔹 Customized Accounting & VAT Solutions for every business.
🔹 Reliable, Transparent, and Affordable Services.
🔹 100% Compliance Guarantee with Bahrain’s financial laws.
🔹 Cloud-Based, Secure, and Efficient Accounting Processes.
🔹 End-to-End Financial Support from Bookkeeping to Tax Advisory.
🔹 Trusted by Hundreds of Businesses Across Bahrain.
Accounting is not just about tracking income and expenses; it plays a key role in a company’s success by:
Ensuring compliance with Bahrain’s financial laws and regulations.
Providing accurate financial insights for informed decision-making.
Helping businesses optimize tax planning and VAT compliance.
Enhancing transparency and credibility with investors and stakeholders.
Supporting business growth through strategic budgeting and forecasting.
Whether you handle accounting in-house or outsource accounting services in Bahrain, having a well-structured accounting system is non-negotiable for success.
✅ Expert Accountants & VAT Specialists – We handle everything from bookkeeping to VAT filing.
✅ 100% Compliance with Bahrain’s Tax Laws – Avoid penalties and late filings.
✅ Accurate & Transparent Financial Reporting – Essential for decision-making and audits.
✅ Cost-Effective & Scalable Solutions – Tailored accounting services for businesses of all sizes.
✅ Cloud-Based Accounting & VAT Automation – Secure and efficient financial management.
✅ Industry-Specific Expertise – Customized solutions for various business sectors.
✅ Dedicated Support – Personalized assistance for financial planning and compliance.
Various regulatory bodies govern Bahrain’s accounting landscape, ensuring businesses adhere to financial reporting and compliance requirements.
| Regulatory Authority | Role in Accounting Compliance |
|---|---|
| Ministry of Industry & Commerce (MOIC) | Oversees business registrations, financial regulations, and commercial compliance. |
| Central Bank of Bahrain (CBB) | Regulates financial institutions, banks, and investment firms in Bahrain. |
| National Bureau for Revenue (NBR) | Governs VAT registration, compliance, and reporting. |
| Bahrain Commercial Companies Law (BCCL) | Mandates financial record-keeping, audits, and reporting for companies. |
| International Financial Reporting Standards (IFRS) | Global accounting standard applied in Bahrain for financial transparency. |
Key Takeaway: Businesses operating in Bahrain must maintain accurate accounting records, submit periodic financial reports, and comply with VAT regulations to avoid penalties.
Bahrain follows International Financial Reporting Standards (IFRS), ensuring businesses align with global best practices. The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards also apply to Islamic finance institutions operating in Bahrain.
| Accounting Standard | Applicable Businesses |
| IFRS | Public companies, multinational corporations, financial institutions |
| IFRS for SMEs | Small and medium enterprises (SMEs) |
| AAOIFI | Islamic financial institutions |
Companies are required to maintain financial statements, including balance sheets, income statements, and cash flow reports, adhering to IFRS principles.
Businesses in Bahrain can benefit from a range of accounting services that streamline operations and ensure compliance.
Accurate bookkeeping ensures every financial transaction is recorded properly. This includes:
Recording daily transactions.
Managing accounts payable and receivable.
Reconciling bank statements.
Bahrain implemented VAT (Value Added Tax) at 10%, requiring businesses to:
Register for VAT with the National Bureau for Revenue (NBR).
File VAT returns on time to avoid penalties.
Maintain proper VAT invoicing and compliance documentation.
Efficient payroll management ensures timely salary payments while complying with Bahrain’s labor laws.
Monthly salary processing.
End-of-service benefits calculation.
WPS (Wage Protection System) compliance.
Businesses must maintain annual financial statements for tax reporting and auditing purposes.
Preparation of balance sheets, profit & loss statements, and cash flow reports.
Conducting internal and external audits.
Ensuring compliance with MOIC and CBB regulations.
Many businesses in Bahrain use accounting software like:
Zoho Books (for SMEs & startups)
QuickBooks (for cloud-based accounting)
Tally ERP (for large enterprises)
Odoo ERP (for automated accounting & reporting)
Solution: Work with an experienced accounting firm in Bahrain to stay updated on new tax laws and compliance regulations.
Solution: Use automated accounting software or outsource VAT compliance to professionals.
Solution: Implement cloud-based payroll systems to ensure error-free salary processing.
Solution: Conduct periodic audits and use standardized accounting frameworks like IFRS.
Yes, businesses with an annual turnover above BHD 37,500 must register for VAT in Bahrain.
Zoho Books, QuickBooks, Tally ERP, and Odoo are popular choices for Bahrain companies.
Yes, all businesses in Bahrain must undergo an annual external audit as per the Bahrain Commercial Companies Law.
Yes, many businesses choose to outsource accounting in Bahrain to specialized firms for cost efficiency and compliance.
Bahrain has adopted the Bahraini Accounting Standards (BAS), which are aligned with the International Financial Reporting Standards (IFRS). These standards ensure consistency, transparency, and comparability of financial statements across businesses.
Most businesses in Bahrain are required to prepare their financial statements in accordance with IFRS. These globally recognized standards enhance the credibility of financial reports and facilitate international business operations.
Bahrain’s taxation system is relatively simple compared to other countries. Key taxes include:
Value Added Tax (VAT): Introduced in 2019, VAT is levied at a standard rate of 5% on most goods and services.
Corporate Tax: Bahrain does not impose corporate tax on most businesses, except for oil and gas companies, which are subject to a 46% tax rate.
Withholding Tax: A 5% withholding tax is applied to royalties, interest, and other payments made to non-residents.
Whether you’re a small business or a multinational company, having accurate, compliant, and strategic accounting in Bahrain is essential for success. From VAT compliance and bookkeeping to financial reporting and auditing, the right accounting partner can save you time, money, and legal troubles.
Get Started Today! If you need expert accounting in Bahrain, contact us for a free consultation and discover how our tailored services can benefit your business.
Minimize risks and maximize growth with our comprehensive accounting solutions in Bahrain.
With a reputation for precision, and excellence, we are here to support your business growth while ensuring compliance with Bahrain’s financial and regulatory standards.
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