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/

December 31, Bahrain's economy is expected to grow by 3% this year, with the growth rate rising to 3.5% in 2025, driven by financial services, technology, and industrial expansion, according to e International Monetary Fund's report. 

December 19, The partnership between the Abu Dhabi Fund for Development and the Government of Bahrain represents a model collaboration for sustainable development. To date, ADFD has financed 33 development projects in the country, totaling AED 23 billion, spanning critical sectors such as housing, energy, transport, and health. 

November 23   "Made in Bahrain" goods will soon take center stage in government procurement, as the nation pushes to cut back on imports and supercharge local production. The ambitious plan aims to showcase Bahraini industries, spotlight homegrown talent, and build a stronger, self-sufficient economy. 

November 14    BAIC Group inaugurated its first BAIC brand showroom in Bahrain, marking another significant step in its Middle Eastern expansion following a similar launch in Qatar.     

November 6     The Bahrain Development Bank has announced the launch of the kingdom’s first $265 million Private Credit SME Growth Fund. The fund aims to accelerate economic development by providing critical financial support to small and medium-sized enterprises (SMEs), which constitute over 93 per cent of Bahrain’s companies. 

October 27       Fakhro Motors, the exclusive distributor of BYD, the world's leading manufacturer of New Energy Vehicles, has announced the arrival of the BYD QIN PLUS and BYD SONG PLUS. These models are plug-in hybrids, which allow drivers to choose between petrol and electric power.

October 23     The financial and insurance Activities remained the highest contributor to real GDP at 17.1per cent in Q2, followed by the crude petroleum and natural gas sector at 14.8 per cent and manufacturing at 14.4 per cent.  

October 21       Bahrain has taken action to allow foreign companies to fully control certain areas in order to attract global businesses. According to the official gazette, foreign enterprises can now sell certain goods in Bahrain without the need for local partners. If foreign businesses operate in at least ten countries or have an annual income exceeding 750 million euros, they can fully own their own businesses. 

September 25, A detailed demographic breakdown of Bahrain's population reveals a youthful nation, with over two-thirds of Bahrainis under the age of 35. The statistics, released for the first half of 2024 highlight young people's significant role in the country's future.

September 2, Bahrain announced that it will introduce a 15% domestic minimum top-up tax for large multinational corporations starting January 1. The tax aligns with guidelines set by the Organization for Economic Cooperation and Development (OECD) and targets multinational enterprises with global revenues exceeding 750 million euros (approximately $829 million) operating in Bahrain.  

August 21, Bahrain's non-oil sector continued its upward trajectory in July, with re-exports jumping 22 per cent to BD61 million from the same period last year, according to a report by the Information and eGovernment Authority (iGA). 

August 19, In the first half of this year, Chinese cars replaced Japan as the largest source of Bahrain's cars with a market share of 25%, while Japanese car market share dropped to 24%.  

August 5, Bahrain's economy grew 3.3% year-on-year in the first quarter of 2024, according to a quarterly economic performance report by the Ministry of Finance, citing preliminary data from the Information & eGovernment Authority.   

July 21        According to recent statistics released by the GCC Statistical Centre, the total population of the Gulf Cooperation Council (GCC) countries witnessed a significant increase of 7.3% in 2023 compared to 2021, reaching 57.6 million. Bahrain secured the fifth position among GCC countries in terms of population growth over the past two years, raising to 1.6 million in 2023.

July 18      Imports, exports and transshipments through Bahrain International Airport decreased last year (2023), according to an annual report. Although cargo handling witnessed a decrease of seven per cent with a total of 353,542 tonnes handled in 2023 (compared to 380,414 tonnes in 2022), the airport’s strategic initiatives and operational efficiency continued to maintain cargo throughput above pre-pandemic levels. 

July 8       Bahrain has begun final preparatory work before construction of the King Hamad Causeway, linking the Gulf island with Saudi Arabia. The 16-mile sea bridge will run parallel to the existing King Fahd Causeway.

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.