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Investing in the Kingdom of Bahrain

The Kingdom of Bahrain's long-term plan is to enhance the competitiveness of its economy which is a main principle of its Economic Vision 2030. The Kingdom thrives to attract foreign investments and provide high-quality job opportunities for Bahraini citizens, in addition to raising standards of living in general. Bahrain invested more than $440 million in the private sector as the driving engine of its national economic growth.

Located at the heart of the Gulf region , Bahrain has a natural geographic advantage, which is continually enhanced through new infrastructure projects. With access to an economy worth US$2 trillion by 2020, Bahrain’s position at the heart of the Arabian Gulf makes access to every market in the region very quick, efficient and convenient.

The Kingdom of Bahrain has an attractive business and investment environment that helps any investor to establish their business conveniently. Some of the incentives that Bahrain offers are the low establishment and operational costs for businesses, few indirect taxes for private enterprises and individuals, and 100% foreign ownership of business assets. Thus, operating in Bahrain can make a significant difference in profitability.

The Kingdom of Bahrain has the highest qualities of life in the Middle East. It has excellent educational institutions, healthcare, and shopping facilities. It also has a young, educated, bilingual local workforce . Bahrain boasts an over 40-year track record as the Gulf's leading financial center. The kingdom also provides access to a regional market of 1.5 billion people, Arab countries with 300 million people and a Gulf Cooperation Council (GCC) market of 40 million people. It is a pioneer in the Gulf region: Bahrain is ranked fourth in terms of cost of living in the Middle East and has the highest level of economic freedom in the Middle East and North Africa (MENA) region according to the Heritage Foundation Economic Freedom Index 2016 . It also provides competitive rates for infrastructure and utilities.

Moreover, the Bahraini telecommunications sector is the most liberated from any regulatory restrictions. Bahrain is the first in MENA in Information and Communication Technology (ICT) readiness and 4th globally in Telecoms Infrastructure. According to Agility Emerging Markets Logistics Index 2017, Bahrain is the 7th globally in terms of international and domestic transport infrastructure links and the level of service it receives.

 Bahrain has allowed 100% foreign ownership for most activities and is the only GCC state to permit freedom across all sectors and in which the entire country is effectively a free zone. Companies in Bahrain see a strong return on their funds as they thrive in Bahrain’s supportive climate. There are Zero corporate income tax or personal income tax in Bahrain, and its 20-35% cheaper in the cost of setting up and operation business compared to other GCC countries.

 

Investing in Human Capital

The Kingdom of Bahrain is home to a highly skilled local and global workforce with the best human capital development in the Middle East and North Africa (MENA). Over 70% of employees in the ICT sector are locals, and 60% of the ICT workforce in Bahrain is in the 18-24 age range. 89% of the ICT workforce holds either a Bachelor’s or a Master’s degree, and 44% hold another professional certification. 90% of the ICT workforce is fluent in English and Arabic, the two most commonly spoken languages in Bahrain. The Kingdom ranks 1st in MENA and 6th worldwide in language skills. According to World Economic Forum Human Capital Index 2016 , Bahrain is the MENA's top human capital development.

Starting a business

Many international companies have chosen Bahrain as their regional base for operations, allowing foreigners to practice most business activities and own 100%. Creating a business in Bahrain is easy, with accessible online support and assistance at every step of your venture.

 

Value Added Tax and Excise Tax in Bahrain

5% Value Added Tax (VAT) has been applied in the Kingdom of Bahrain from 1 January 2019. The National Bureau for Revenue (NBR) is the government agency responsible for implementing and managing VAT in Bahrain. The system is responsible for recording VAT and related obligations, validating the submitted statements, and evaluating such matters. The National Bureau for Revenue shall also reimburse the recoverable amount, collect any outstanding amounts, and perform audits. In addition, the authority is responsible for considering and issuing decisions related to grievances and following up and implementing compliance with VAT on an ongoing basis.

The Kingdom of Bahrain introduced a Excise Tax  system on December 30, 2017. This is a tax imposed on specific goods harmful to human health and the environment. The aim of the tax is to discourage citizens from consuming products that are harmful to health. Excise Tax revenues contribute to the treatment of diseases resulting from the consumption of these products.

More information about taxes in the Kingdom of Bahrain


Page Last Updated: 29 Jul, 2019