The investment climate in the Kingdom of Bahrain is positive and relatively stable. Bahrain maintains a business-friendly attitude and liberal approach to attracting foreign investment and business.

In an economy dominated by state-owned enterprises, Bahrain aims to foster a greater role for the private sector to promote economic growth. Government of Bahrain (GOB) efforts focus on encouraging foreign direct investment (FDI) in the manufacturing, logistics, information and communications technology (ICT), financial services, and tourism sectors.

Bahrain’s total FDI stock reached BD 11.537 billion (USD 30.683 billion) in 2020. Annual FDI inflows have dropped from BD 603 million (USD 1.6 billion) in 2018 to BD 355 million (USD 942 million) in 2019 and BD 333 million (USD 885 million) in 2020. The financial services, manufacturing, logistics, education, healthcare, real estate, tourism, and ICT sectors have attracted the majority of Bahrain’s FDI.

The Covid-19 pandemic, in tandem with the global oil price collapse in 2020, weakened GOB efforts to generate revenue and reduce public spending. In April 2020, Bahrain implemented a BD 4.3 billion (USD 11.4 billion) financial relief package, equivalent to 29 percent of GDP, to ease the economic impact of the pandemic. Key provisions of the package were continued into 2021. To strengthen Bahrain’s position as a startup hub in the region and to enhance its investment ecosystem, the GOB launched Bahrain FinTech Bay in 2018; issued new pro-business laws; and established the USD 100 million Al Waha venture capital fund for Bahraini investments and the USD 100 million superfund to support the startup growth. Since 2017, the Central Bank of Bahrain (CBB) has operated a financial technology regulatory sandbox to enable startups in Bahrain, including cryptocurrency and blockchain technologies, and regulates conventional and Sharia-compliant businesses.

Bahrain permits 100 percent foreign ownership of new industrial entities and the establishment of representative offices or branches of foreign companies without Bahraini sponsors or local partners. In 2017, the GOB expanded the number of sectors in which foreigners are permitted to maintain 100 percent ownership in companies to include tourism services, sporting events production, mining and quarrying, real estate, water distribution, water transport operations, and crop cultivation and propagation.  In May 2019, the GOB loosened foreign ownership restrictions in the oil and gas sector, allowing 100 percent foreign ownership in oil and gas extraction projects under certain conditions.

For more information, please refer to: https://www.state.gov/reports/2021-investment-climate-statements/bahrain/

June 24    The foreign ministers of Bahrain and Iran have agreed to start negotiations aimed at normalising relations between the two countries. The decision to begin formal talks reflects a broader trend of de-escalation and dialogue among regional powers,  namely Saudi Arabia, which backs the government in Bahrain and is closely aligned with Manama on security and trade.

June 21    Bahrain saw a surge in foreign direct investment (FDI) to a record $6.8 billion in 2023, up 148% from the previous year's figures, according to the latest World Investment Report (WIR 2024) by the United Nations Conference of Trade and Development (UNCTAD).   

June 1     Bahrain inaugurated a civilian aviation route from Bahrain International Airport to Shanghai Pudong Airport, marking its first direct flight to China. The Gulf Air will also launch a direct flight from Bahrain to Guangzhou, South China’s Guangzhou city. 

May 14      Moody’s Investors Service affirmed Bahrain’s B2 credit rating with a stable outlook, highlighting the country’s economic resilience and potential for future growth, despite ongoing fiscal challenges.

May 6       Bahrain has achieved impressive results on the Global Connectedness Index 2024, published by international logistics giant DHL, climbing seven ranks to secure the 25th position globally and the most improving country since 2021. 

April 9      Bahrain experienced a 2.4% increase in its gross domestic product (GDP) at constant prices in 2023 compared to the previous year. According to the Information and eGovernment Authority (iGA), Bahrain’s GDP reached BD13.6 billion ($36.08 billion) at constant prices in 2023, up from BD13.3 billion ($35 billion) in the previous year.

April 1      A blueprint to put Bahrain amongst the top 20 countries in logistics, increase flight destinations to 70 and increase the flow of air freight to one million metric tonnes is underway. Transportation and Telecommunications Minister said that infrastructure work continues at Bahrain International Airport to form a comprehensive and advanced global logistics center. 

March 21    Bahrain witnessed in 2023 a significant shift towards digitalization in its government services, resulting in numerous benefits. Approximately 10.4 million government transactions were conducted through digital channels, leading to an impressive 85% reduction in operational costs for the government and significant time savings.

March 15    Moody’s has affirmed a stable outlook for Bahraini banks, citing the sustained growth in the non-oil economy and favorable operating conditions.