Bahrain has emerged as a prime location for establishing businesses in the Gulf Cooperation Council (GCC) region after ranking highly across several global indices and reports in the previous year and cementing the country as a trusted investment hub for international business. These reports cover elements of the overall status and quality of the business environment, such as Foreign Direct Investment (FDI), innovations, economic policies and legislature frameworks.
The business-friendly environment in Bahrain, with policy and strategic initiatives, attracts international investment and companies into the country. The Bahrain Economic Development Board (Bahrain EDB) and Team Bahrain have been central in securing over $1.7 billion through 2023 to bring the country’s total FDI up to $6.8 billion—a record figure for the country, and in doing so, have positioned Bahrain firmly in the top 20 FDI performers globally on the Greenfield FDI Performance Index 2023 (FDI Intelligence) and 4th largest in the region.
The financial sector in Bahrain accounted for a significant 18.1% of real GDP in Q3 of 2023, surpassing oil as its largest contributor to the economy. Innovative legislation supports this sector’s growth, which earned Bahrain the top spot in Islamic Finance Regulations from the Islamic Finance Development Report 2023 (ICD-LSEG).
Bahrain’s capital city, Manama, ranked first globally for Financial Attractiveness with the Global 150 Cities Index 2023 (-AIRINC). The island nation offered the best-value operating and living costs, which positioned it as an attractive destination for businesses looking to optimise expenses. The strategic location, infrastructure and frameworks provide unparalleled access to the Gulf markets and beyond, ranking second and tenth on the Timeliness subindex in the Arab world and globally, respectively, from the Logistics Performance Index 2023 (The World Bank).
The commitment to streamlining regulations and enhancing policies in Bahrain ensures a seamless experience for expanding or establishing companies. The relative ease of doing business in the country is reflected in its tenth place ranking of Policies of Doing Business in the WIPO Global Innovation Index 2023, first in the Arabic world in Economic Freedom, from Frasier Institutes, Economic Freedom of the World 2023 rankings, and first in the Middle East and North Africa (MENA) in Financial, Investment, and Trade Freedom (Index of Economic Freedom 2023, The Heritage Foundation).
These impressive achievements and the global positioning of Bahrain set a strong standard for the surrounding nations and their economies regarding how to competitively evaluate their regulations and attractiveness. Other countries in the Middle East are similarly looking to offer unique advantages to those businesses established in the region. Countries with large and growing consumer markets, like Egypt, are providing opportunities across diverse sectors and, in terms of their connectedness, bear similar advantages to Bahrain by allowing immediate access to Africa and the Middle East. Other economies, reflective of Bahrain’s economic evolution, are attempting to diversify their economies, like Kuwait, which offers a stable economic environment with substantial financial reserves from its oil and gas sector and is now actively working to become increasingly diverse by offering incentives to encourage foreign investment into various sectors.
For businesses looking to capitalise on Bahrain’s opportunities, it is important to be aware of a few key considerations for establishing in the region. Bahrain’s regulatory landscape offers a relatively transparent and efficient framework compared with other nations, making it an attractive regulatory environment for businesses seeking access to the region.
Bahrain is currently witnessing sector-specific opportunities in the technological and financial sectors. The financial services industry in Bahrain excels. With bank account opening being an integral part of the company formation process, it is much easier for established businesses to set up a corporate bank account.
Finally, the talent pool and labour market in Bahrain received recognition across several indices, ranking fourth globally in skilled labour, first in the Arab world for the Percentage of Females in the Labour Force, tenth globally for Talent Readiness, and first in MENA in Finance Skills, Employee Training and Language Skills (IMD World Talent Ranking 2023). In addition to securing first in the GCC for the Sustainability of Talent according to the Global Talent Competitiveness Index 2023 (INSEAD), these accolades accumulate to allow Bahrain to boast a highly skilled workforce and labour environment to attract further international talent and security in its capabilities.
The strategic initiatives, pro-active business policies and competitive advantages have made Bahrain a destination for company formation within the GCC region. It offers unique opportunities, advanced frameworks, ease of business, and a favourable investment environment. Bahrain presents itself as a compelling location for companies looking to set up in the region, blending economic freedom and infrastructure to set the country apart as a leading hub for international and local business investment. These numerous assessments, criteria and rankings for business, in which Bahrain excels, highlight and underscore the country’s attractiveness.
