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Why is Bahrain an Attractive Country for Investors?

Why is Bahrain an Attractive Country for Investors?

The Kingdom of Bahrain consists of the Island of Bahrain and the small archipelago surrounding it. The investment opportunities here abound, despite an ongoing focus and reliance on the oil and gas sector. The Government is keen on attracting foreign investors and a number of business sectors, including the financial services sector or the logistics services sector offer important opportunities. 

Why is Bahrain an attractive country for investors? Among the many advantages in the region, a strategic location and the low costs for doing business are constantly among the reasons why foreign entrepreneurs are turning their attention to this country.

Company registration in Bahrain is a simplified process and investors can open micro, small or medium businesses, with an easy registration process via the Commercial Registration Portal, SIJILAT.

Below, we describe the main reasons to invest in Bahrain and the key investment sectors. Foreign entrepreneurs can request specialized aid from our team of agents who specialize in company formation in Bahrain.

Reasons to invest in Bahrain

Businesses of all types can benefit from setting up their offices in Bahrain. The Kingdom is one of the leading countries in the Gulf Cooperation Council (GCC) region mainly because of its competitive business environment and good conditions for both investors and individuals living here.

The main advantages for those who set up a company in Bahrain are the following:

  1. Excellent business climate: the Kingdom of Bahrain is often included in international statistics as one of the countries with the most attractive business climates and economic freedom.
  2. Good location: Bahrain’s location in the Arabian Gulf is of great importance when discussing the kingdom’s advantages. The Middle East market is easily accessible by land, sea or air.
  3. Easy company formation: investors can set up a company in Bahrain with low costs and the costs for gas or water are competitive ones; low rent rates are also an advantage.
  4. Qualified workforce: the region’s development has attracted a large number of educated and experienced employees from which investors can choose qualified individuals to work on their teams.
  5. Trading advantages: an important feature for import/export companies as they can trade in any local and foreign currency.
  6. Taxation benefits: there is no corporate income tax for companies other than oil, gas and petroleum companies; other taxes are also not applicable here.

Apart from these six features briefly highlighted here, investors in Bahrain will also enjoy a dynamic real estate market, a diverse community, and a modern, global economy, all set within a liberal business environment. 

The Kingdom’s strategic location, the lack of taxes for companies in many different business fields and the liberal and modern business climate are among the top cites reasons why investors choose to set up a company in Bahrain.

Our lawyers in Bahrain can explain the main requirements imposed to foreign investors.

Key investment opportunities in Bahrain

What are some of the business fields that are attractive to foreign investors? We name a few:

  • • Financial services: investors can, upon receiving a license, offer traditional banking services, insurance services, Islamic financial services, and others.
  • • Industry: the strategic location at the heart of the GCC means that manufacturers can benefit from basing their company in Bahrain.
  • • Logistics services: the Kingdom is well positioned and well-connected, allowing for logistics companies to benefit from many advantages, including those related to the lack of taxes.
  • • Real estate: opportunities are to be found in this evolving market that has grown over the last ten years.

As previously stated, there is no corporate income tax for companies that activate in most of the business fields. The tax rate of 46% applies only to those companies that derive their profits from oil, gas and petroleum extraction, production and refining. Moreover, there is no withholding tax, no capital duty or payroll tax, no real property tax and no wealth or net worth tax. A social security tax and a stamp duty will apply.

With all of these tax advantages, Bahrain can be seen as a location that offers the advantages of an offshore jurisdiction while remaining an onshore location. The business environment is the same as that in other locations such as free zones or offshore locations that offer no taxes and full foreign ownership, at the same time remaining a reputable location in the Gulf region.

Foreign entrepreneurs who wish to know more about how to open a company can contact our agents who specialize in company formation in Bahrain.