An Indian who has gone to Bahrain for employment becomes a person resident outside India under FEMA and must convert resident savings accounts to NRO, route foreign earnings through NRE or FCNR accounts, and follow the rules on property, shares and loans for non-residents. On returning to India for good, the accounts are redesignated as resident accounts, while a Resident Foreign Currency account can keep foreign earnings abroad in value. We review your position and fix gaps with the bank.
- Document route
- Bahraini notary, then apostille from the Ministry of Foreign Affairs, or signing at the Embassy of India, Manama
- Time difference
- IST is 2h30 ahead of Bahrain all year (no daylight saving)
- Law
- FEMA 1999 and RBI rules
- Investment rules
- Non-Debt Instruments Rules 2019
FEMA Compliance for NRIs from Bahrain: how it works
We begin with a list of your Indian accounts, deposits, mutual funds, demat holdings, insurance policies and property, and the date you took up employment in Bahrain. Under FEMA, a person going abroad for employment is treated as non-resident from departure, not after a set number of days, so a savings account left as resident is a common error. We prepare the letters to the bank for redesignation, check that mutual fund and demat records show NRI status with the correct repatriable or non-repatriable tag, and confirm that any home loan or loan against deposits is permitted for non-residents.
Where something was missed, such as holding a resident account for several years after leaving or investing in a category not open to NRIs, we advise on regularisation, which may involve a compounding application to the RBI through the bank. Before your return, we plan the transition: converting NRE deposits, opening an RFC account if you want to keep foreign earnings in foreign currency, and keeping documents showing that Bahrain earnings were brought in through banking channels. The aim is a clean record before tax residency also changes.
What clients in Bahrain should know
- FEMA status and income tax residence are separate tests, so a Bahrain NRI can be non-resident under FEMA from the day of departure while the 182-day rule decides income tax status.
- Remitting Bahrain salary to an NRE account keeps the money fully repatriable, while depositing it into an NRO account mixes it with Indian income and limits its later transfer abroad.
- Agricultural land, plantations and farmhouses cannot be bought by NRIs and OCI cardholders under the general permission, though they can be inherited.
Step by step from Bahrain
Video consultation
A call at a time that suits Bahrain, after we have read your documents.
Documents signed in Bahrain
Bahraini notary, then apostille from the Ministry of Foreign Affairs, or signing at the Embassy of India, Manama
Work in India
Our team files, appears and follows up in India, and shares scans of everything filed.
Result and handover
Certified copies and originals are couriered to you in Bahrain where needed.
The full guide
This page covers what changes when you are in Bahrain. For the law, the documents and the step-by-step procedure, read our main page on FEMA Compliance for NRIs, or see all services for clients in Bahrain and the Cross-Border Tax & Money practice area.
Questions from clients in Bahrain
I forgot to convert my savings account when I moved to Bahrain. What now?
Tell the bank and convert it to an NRO account as soon as possible. Depending on how long it stayed resident and what was done with it, we may advise a regularisation step.
Can I keep my Indian demat account while in Bahrain?
You can hold investments, but the account must be redesignated for NRI status and linked to an NRE or NRO bank account, and some products are restricted for NRIs.
What happens to my NRE account when I return from Bahrain?
On returning permanently, NRE accounts are redesignated as resident accounts or the funds moved into an RFC account. Fixed deposits can usually run to maturity.