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
For businesses in Bahrain, managing labor compliance is not just about hiring the right people—it’s about ensuring every single employee is properly documented, legally employed, and paid according to national standards. This is where LMRA Audits (Labour Market Regulatory Authority Audits) come into play.
An LMRA audit isn’t something to fear, but it can become a major disruption if you’re unprepared. These audits are designed to ensure that businesses in Bahrain are:
Employing staff with valid work permits and visas
Paying salaries correctly through the Wage Protection System (WPS)
Following Bahrain’s labor regulations, including employee welfare and rights
Failing an LMRA audit can lead to heavy fines, suspension of work permits, and even the halting of your business operations. That’s why proactive preparation is key.
In this guide, we’ll explain everything you need to know about LMRA audits, how they affect your business, and most importantly—how to prepare and pass with zero stress.
The Labour Market Regulatory Authority (LMRA) is Bahrain’s governing body responsible for:
Regulating work permits and visas for expatriate employees
Monitoring labor practices and employment contracts
Enforcing compliance with national labor laws and wage protection systems
Conducting workplace inspections to ensure legal employment practices
LMRA audits are a critical tool used by the authority to ensure that employers are adhering to Bahrain’s labor regulations, protecting workers’ rights, and maintaining fair employment practices across industries.
The main objectives of an LMRA audit include:
Verifying that every employee has a valid work visa and permit
Ensuring accurate payment of salaries through WPS
Checking if LMRA fees, taxes, and levies are paid on time
Assessing workplace conditions and employee welfare
The audit scope can vary depending on the size and nature of your business, but generally, it includes a review of:
HR records and employment contracts
Salary payments and WPS submissions
Work permit statuses
On-site conditions (especially for industries like construction, hospitality, logistics)
In short, an LMRA audit evaluates whether your workforce is legal, paid correctly, and treated fairly.
While every business in Bahrain is subject to LMRA regulations, certain sectors are more frequently audited, including:
Construction and Real Estate companies
Hospitality and F&B (restaurants, hotels, catering services)
Logistics and transportation firms
Cleaning and maintenance services
Manpower supply agencies
Small to medium-sized businesses employing expats
However, even freelancers, startups, and micro-businesses can be subject to random audits, especially if:
They employ foreign workers
They’ve had previous compliance issues
They are applying for new work permits or renewals in bulk
Understanding what the LMRA auditors will focus on can help you prepare effectively and avoid last-minute scrambling.
One of the primary focus areas of an LMRA audit is ensuring that all your employees are legally employed. The auditors will:
Cross-check each employee’s work permit status
Verify visa validity and matching with the current job role
Review employment contracts for compliance with Bahrain labor law standards
Missing work permits, expired visas, or discrepancies between actual job roles and registered designations are major red flags that can result in fines or permit suspensions.
Since the launch of Bahrain’s Wage Protection System (WPS), employers are required to:
Pay employee salaries through approved banks electronically
Submit monthly Salary Information Files (SIFs) to LMRA
Ensure salary amounts match official contracts
LMRA audits will check:
SIF submission records
Bank statements as proof of salary payments
Any mismatches between agreed and paid salaries
Timeliness of payments (late payments are a compliance issue)
Failure to comply with WPS regulations is one of the most common reasons businesses face penalties during audits.
The LMRA imposes monthly fees for work permits, which employers must pay on time. During an audit, inspectors will:
Check if LMRA fees for all active employees are paid up-to-date
Review past due payments and late fee charges
Verify the accuracy of company declarations to LMRA
Proper documentation of payments, including receipts and reconciliations, is critical to demonstrate compliance.
For certain sectors like construction, hospitality, and maintenance, LMRA audits may include an on-site inspection to:
Evaluate worker accommodation standards
Check for health and safety measures
Ensure working conditions meet Bahrain’s labor welfare requirements
On-site violations, such as unsafe working environments or overcrowded accommodations, can result in immediate penalties or corrective action orders.
LMRA audits are not always random. Certain triggers can raise red flags and put a business on the authority’s audit radar.
If your business submits:
Incomplete or incorrect visa applications
Frequent requests for role changes or permit transfers
High numbers of permit cancellations without clear justification
It may prompt LMRA to initiate an audit to ensure compliance.
The LMRA system tracks SIF submissions. If your business:
Submits salaries late
Pays lower than contractually agreed salaries
Has inconsistencies between SIF files and employee contracts
You are likely to be flagged for a compliance review.
Employee grievances reported to LMRA, such as:
Non-payment or delayed payment of salaries
Improper deductions or unfair treatment
Violations of contract terms
can trigger a targeted LMRA audit on your company.
From time to time, LMRA conducts sector-wide audits to ensure systemic compliance. Businesses in high-risk sectors like construction or F&B are often part of these random compliance checks, irrespective of prior history.
Preparation is everything. If you start early and maintain consistent records, LMRA audits become straightforward and hassle-free.
Maintain a comprehensive file for each employee that includes:
Valid work permit copy
Current passport copy with valid visa
Signed employment contract (in Arabic or bilingual format)
Any amendments to terms of employment
Updated contact information
Ensure that job roles in LMRA records match actual job functions.
Before an audit:
Reconcile your Salary Information Files (SIF) with actual bank payment records
Verify salary amounts match what’s mentioned in contracts
Ensure there are no missing SIF submissions
Keeping a 12-month record of SIF files readily available is considered best practice.
Keep digital and printed copies of:
LMRA monthly fee payment receipts
Reconciliation reports showing permit statuses
Proof of timely submission and payment acknowledgements
This documentation should be organized by employee ID and submission period.
Your HR team should:
Be familiar with LMRA regulations and compliance expectations
Know where to find required documents quickly
Be able to answer auditor questions regarding processes and records
Conducting internal “mock audits” is an effective way to prepare your staff and ensure audit readiness.
Before an LMRA audit even reaches your doorstep, Fama’s audit team conducts a comprehensive compliance health check. We review:
Employee records for permit accuracy
WPS submissions and salary reconciliation
LMRA fee payments and supporting documentation
Worksite conditions and labor welfare practices (for applicable sectors)
By identifying and addressing potential gaps early, we ensure your business is fully audit-ready, reducing the risk of fines or corrective action orders.
Our team helps organize and prepare:
Salary Information Files (SIF)
Bank payment confirmations
GOSI contributions reports
Work permit lists with expiry alerts
LMRA payment history and reconciliations
We also assist in updating records or fixing inconsistencies, ensuring that every file aligns with LMRA’s audit expectations.
LMRA audits often involve physical inspections and interviews. We provide:
On-site presence to assist with documentation handovers
Liaison with LMRA inspectors to address queries promptly
Guidance to HR and admin staff during interviews or spot-checks
Our presence ensures the audit process is smooth, professional, and well-managed.
In case LMRA provides audit observations or corrective recommendations, we:
Draft a structured action plan for compliance fixes
Support you in implementing required changes
Conduct follow-up checks to ensure ongoing compliance
This proactive approach ensures your business remains in good standing with LMRA long after the audit is completed.
Failure to comply with LMRA regulations can result in:
Fines ranging from BHD 500 to several thousand, depending on severity
Daily fines for unrectified violations
Penalties for unpaid LMRA fees or incorrect SIF submissions
Repeat offenses can attract higher penalties and closer scrutiny in the future.
One of the most immediate risks of non-compliance is the suspension of:
New work permit applications
Work visa renewals
Labor approvals for upcoming projects
This can disrupt business operations, especially in industries dependent on foreign labor.
Beyond financial penalties, LMRA non-compliance can harm your:
Reputation with regulators and partners
Eligibility for government contracts or projects
Relationship with employees, leading to attrition or legal disputes
Taking LMRA audits seriously protects not just your legal standing but also your business brand and credibility in the market.
To ensure you’re fully prepared, here’s a practical checklist of documents LMRA auditors will expect:
List of all active employees with CPR and permit details
Work permit copies for each employee
Employment contracts (Arabic or bilingual)
Salary Information Files (SIF) for past 12 months
Bank payment slips for salary disbursements
LMRA fee payment receipts and reconciliations
GOSI payment records (where applicable)
Updated CPR copies
Visa stamps and residency permits
Job offer letters or amendments
Attendance records or time sheets (if requested)
Bank statements matching SIF submissions
Payroll registers for each pay period
Payslips issued to employees (digital or hardcopy)
Records of bonuses, deductions, or end-of-service settlements
Having these documents organized and readily accessible will ensure a smooth audit process with minimal disruptions.
LMRA Audit focuses on:
Employee permits and visas
Payroll and WPS compliance
Labor welfare practices
LMRA fee payments
NBR (VAT) Audit focuses on:
VAT return accuracy
Input and output VAT reconciliation
Invoice compliance and documentation
VAT payment records
While the two audits are distinct, poor bookkeeping in one area often affects the other. For example, payroll errors found during an LMRA audit can raise red flags in an NBR audit regarding VAT treatment on services or supplies.
Bahrain’s regulatory bodies are increasingly interconnected. Businesses that maintain:
Proper financial records
Clear documentation of employment practices
Accurate tax filings
are not only LMRA-compliant but also better positioned to pass NBR audits, banking due diligence, and investor reviews. Being audit-ready in one area supports compliance in the other.
Schedule quarterly internal checks to verify permit statuses, WPS submissions, and documentation completeness.
Update HR files promptly upon employee onboarding, termination, or role changes.
Implement systems or spreadsheets that track expiry dates for work permits and visas.
Set up alerts at least 60 days in advance to avoid lapses.
Ensure your HR team stays updated with LMRA policy changes.
Conduct mock audits and documentation drills.
Encourage a culture of proactive compliance, not reactive fixes.
Unsure if your business is LMRA audit-ready? Don’t wait for an official notice to find out. Book a free consultation with Fama’s audit experts and get:
A detailed compliance review of your HR and payroll practices
A checklist of documents you need to prepare
A no-obligation proposal for LMRA audit support and ongoing compliance monitoring
Let’s ensure your business stays safe, compliant, and audit-ready—always.
LMRA audits can occur at any time, especially for businesses applying for work permit renewals, receiving employee complaints, or flagged for random sector checks.
Late payment penalties apply and can accrue daily fines. Continuous non-payment may result in work permit suspensions and legal action.
While small businesses can self-prepare, working with a professional firm ensures your documentation is complete, compliant, and audit-ready, reducing the risk of errors or fines.
Yes, especially for industries like construction, hospitality, logistics, and cleaning services where labor welfare and workplace conditions are critical.
We provide end-to-end support—from pre-audit documentation checks to on-site representation during inspections, and post-audit corrective action plans.
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.
Choosing the right audit partner is not just a compliance decision — it’s a strategic one. Our firm is trusted by businesses across Bahrain because we deliver more than just reports; we deliver value. We combine deep local knowledge, international audit practices, and a commitment to personalized service. With each engagement, we focus on clarity, accuracy, and strategic insight, helping you turn regulatory obligations into business advantages.
We’re based in Bahrain, with a team that understands the intricacies of the local regulatory landscape, including NBR, MOIC, and CBB requirements. At the same time, we follow international standards such as IFRS and ISA, making our reports credible not only in Bahrain but across international markets. Whether you’re a startup, family business, or a multinational branch, we speak your language — both culturally and financially.
One of the main reasons businesses engage in external audits in Bahrain is for Commercial Registration (CR) renewal and loan or investment applications. Our reports are formatted and signed according to MOIC standards and accepted by banks and government entities. We ensure your financials are presentable, defendable, and submission-ready — saving you time, money, and back-and-forth headaches.
Your audit is conducted by highly qualified, licensed professionals with certifications such as CPA, ACCA, CIA, CMA, and relevant MOIC registration. This isn’t just about ticking boxes — it ensures your audit is legally valid, technically sound, and professionally defensible. Every report is reviewed through a quality assurance process before delivery.
We understand that time is often of the essence, especially when audits are required for CR renewal or funding rounds. Our audit teams are efficiently structured, with clear timelines, digital collaboration tools, and a client dashboard for real-time progress updates. Fast delivery does not mean shortcuts — we maintain audit integrity at every stage while honoring your deadlines.
Our audit services span across dozens of industries in Bahrain — from logistics and healthcare to fintech, hospitality, education, and real estate. We bring industry-specific knowledge to every engagement, understanding the nuances of each sector’s operational and regulatory challenges. This ensures our audit approach is relevant, tailored, and impactful for your business.
We don’t just audit and walk away. Post-audit, we provide hands-on support for any rectifications needed, help you submit to relevant authorities, and guide you on how to improve controls, accounting systems, and VAT compliance. Our end-to-end audit service ensures that you’re not left in the dark once the report is delivered.
Auditing involves handling sensitive financial and operational data. We are committed to total confidentiality, and our systems are secured through encrypted document storage, limited-access file sharing, and strict non-disclosure protocols. You can be confident that your information is safe with us.
We believe in clear, upfront pricing without hidden charges. Whether you’re a startup needing your first audit or a complex group with multiple subsidiaries, we offer fair rates and customized packages that align with your needs and budget. Value-driven service is part of our audit philosophy.
Many of our audit clients stay with us for years — not just for audits, but for ongoing accounting, VAT, advisory, and compliance services. We build long-term relationships based on trust, responsiveness, and results. As your business grows, we scale with you — helping you stay compliant, confident, and ready for every financial milestone.
Our external audit process is designed to be seamless, structured, and stress-free for your business. From the first consultation to the final signed report, we follow a transparent and proven methodology that ensures accuracy, accountability, and complete compliance.
We begin with a discovery session, where we understand your business structure, financial year, operational complexity, and industry-specific audit requirements. Based on this, we build a customized audit plan outlining timelines, required documents, and reporting goals.
Our audit team then conducts fieldwork and testing — either remotely or on-site — by analyzing your financial records, general ledger, VAT returns, and compliance documentation. We use advanced tools to cross-verify transactions, evaluate internal controls, and flag inconsistencies.
Before finalization, we present a draft report to your management team for discussion and clarification. Once all revisions are incorporated, we issue your official signed audit report, ready for submission to banks, investors, the MOIC, or CBB.
Throughout the process, you’ll have access to a dedicated audit coordinator and real-time status updates. We ensure you feel informed, prepared, and supported — every step of the way.
Over the years, we’ve earned the trust of businesses in Bahrain by consistently delivering audits that are precise, punctual, and practical.
✅ Reputation for integrity: Our firm operates with full independence, which means our reports carry weight with banks, investors, and regulators.
✅ Client-first approach: We’re known for being approachable, responsive, and easy to work with. Our clients value our professional communication and fast turnaround.
✅ Bahrain regulatory expertise: From MOIC filing formats to NBR expectations, our auditors are fully versed in local frameworks.
✅ Proven track record: We’ve successfully completed audits for hundreds of companies — including startups, family-owned enterprises, and international branches.
✅ Comprehensive support: From audit readiness checks to post-report implementation, we stand by our clients beyond just report delivery.
Our focus is not just on issuing a report — it’s on protecting your business, strengthening your credibility, and ensuring you’re always a step ahead.
Compliance is not optional — it’s foundational. In Bahrain’s evolving regulatory environment, staying compliant with financial laws is essential for license renewals, bank relationships, investor confidence, and public trust.
We ensure that your business meets all key regulatory obligations, including:
Commercial Registration (CR) renewal audits mandated by the Ministry of Industry and Commerce
Bahrain VAT compliance audits and alignment with NBR documentation requirements
Central Bank of Bahrain (CBB) audit guidelines for financial institutions and licensed entities
Adherence to IFRS and IAS audit standards, accepted locally and internationally
Proper documentation for intercompany transactions, foreign investments, and capital structures
Audit trail support for anti-money laundering (AML) and due diligence
With us as your audit partner, you don’t just meet the minimum — you gain peace of mind that your business is operating within the full scope of Bahrain’s legal and financial framework.
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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