Bahrain provides exceptional opportunities for international business in the Middle East, as it is largely an export-based country. The share of the manufacturing sector in the GDP of Bahrain is 16.8% which is the highest amongst all GCC countries. It has grown by 80% in the last five years. It is projected to reach USD XX billion by 2021 at a CAGR of XX%. Greater exposure to trade, attractive investment environment, competition in the sector and diversification are factors affecting the growth of this market.
Attractive Investment Environment Driving the Sector
The cost of setting up and running a business in Bahrain is very low as compared to the other GCC countries. Bahrain is a ‘free zone’ and allows 100% foreign ownership of business and real estate, thereby permitting free movement of profits, capital, and dividends for the investors. GAFTA (Greater Arab Free Trade Area) allows duty-free access of industrial manufactured goods to the world markets via free trade agreements.
Bahrain offers the world’s most favorable tax regimes with no personal or corporate taxes. The cost of living here, as compared to the other GCC countries, is insubstantial. These factors also attract many foreign investors.
Getting Bahrain’s Visa is a challenge and hence restricts many foreign investors. Most of the labor and workers in Bahrain are unskilled and are not trained to do what is expected of them in the industry. The falling oil prices have also restrained the growth of this sector.
Bahrain has a thriving aluminium sector and specializes in manufacturing high-quality aluminium products for many industries. The global aluminium demand is predicted to rise, thereby providing many opportunities.
Bahrain International Investment Park (BIIP) has been developed by the Bahrain Ministry of Industry and Commerce in an area of 2.5 square km. In Feb 2014, it was announced that investment in BIIP had reached USD 1.82 billion. Salman Industry City is specially built for companies looking to set up manufacturing plants and industrial units.
Key Deliverables in the Study