What makes Bahrain an exciting place to invest?

◊ The kingdom’s Economic Vision 2030 a comprehensive plan for the country’s development, places a priority on diversifying from oil revenues, with foreign direct investment a key driver.

◊ The kingdom boasts the region’s most liberal business environment with zero taxation for private companies and free repatriation of capital.

◊ Bahrain offers logistical advantages to businesses in the region: easy access to other Middle East economies being an hour’s drive from Saudi Arabia and an hour’s flight to the UAE.

◊ Structural benefits include a highly developed financial services sector; low basic costs such as rent and industrial land, the most educated workforce in the Gulf and the most flexible visa policy in the region.

Financial services

The financial services sector is a traditional strength of the Bahraini economy, being a leader in Islamic banking and playing host to over 400 financial institutions. With an open regulatory environment and a 14,000 strong financial sector workforce, 17% of Bahrain’s GDP comes from financial services, making it a key industry second only to hydrocarbons.

But far from standing still, this provides a fertile breeding ground for the emerging Fintech industry, in which Bahrain is poised to become a test bed for this developing technology within the GCC, and especially in the realm of Islamic banking. With the right regulatory environment, the requisite workforce, government support and low operating costs, Bahraini fintech startups like Valopay.com are just the beginning of an evolving industry set to flourish in Bahrain: one that will play a crucial part in her economy for years to come.

ICT

Bahrain has for decades been at the forefront of technological and regulatory change in the region. Today the ICT field is set to not only become a major driver of Bahrain’s diversifying economy, but will also take on a key role, and become increasingly woven into Bahrain’s societal fabric. From day one; immediately following liberalisation and the opening up of competition in 2002, the Telecommunication Regulatory Authority (TRA) was developed under the close guidance of the Economic Development Board (EDB), and since, the two have worked hand in glove to exert a modernising and reforming influence in the region.

An open market in Bahrain has led to high mobile and broadband penetration rates: there are 2.4million internet subscriptions as of 2017, of which 64% are mobile broadband. The effect of this environment is notable; on January 1st tech giant Amazon opened an office in Manama and to support organizations make the transition to the Amazon Cloud. Bahrain is investing in fibre optic infrastructure across the country, and recently Bahrain’s first 5G speed test took place: a collaboration between Ericsson and national telecoms provider Batelco which reached speeds of 25 GPS. This is part of a drive to achieve greater connectivity for Bahrain’s consumers, companies, and government within and without its borders, a crucial stepping stone in a worldwide economy trending towards internet connectivity. For a company such as Bahraini start-up EXA, cloud based 3D rendering company, the advantages are obvious.

Tourism

Tourism in Bahrain, already a sector of great importance to the economy, is seen as an area of significant potential growth. From ancient Dilmun ruins to a distinctly modern Formula one Grand Prix, 4 million tourists come through Bahrain’s gates every year, an influx currently thought to be worth about $1.2billion to Bahrain’s GDP.

That figure is forecast to grow almost 5% annually between now and 2026 to an eventual worth of $2billion. Although not, of course, without concerted effort. $10million of foreign investment will go into building new hotels for brands such as The Four Seasons and IBIS, and a $1.1billion airport expansion is set to double capacity.

Construction

News that in 2017 the residential sector in Bahrain will fall short by 75,000, comes with a concurrent housing plan to close this gap between supply and demand by constructing 40,000: news which will only serve to strengthen a Bahraini construction sector already benefiting from the fruits of expansion. Indeed, in the fourth quarter of 2016, the contribution of construction to Bahrain’s GDP reached record levels at $576 million.

Plans such as the East Hidd Housing Project, (1,645 villas built on reclaimed land) an extra terminal to the Bahrain International Airport, and the GCC Railway connecting gulf states are just some of the projects which will ensure the rude health of Bahrain’s construction industry for years to come.