The BusinessEnvironment of Bahrain
Bahrain prides itself on being a premier investment location in theMiddle East Region. Bahrain’s
internationally acclaimed strong financialregulations, economic and political stability, strategic
location and stronglegal framework have transformed it into a high standard investment
andcommerce destination.
Currency
The Unit of Currency is the Bahraini Dinar (BD),equal to US $ 2.6596.
Business Hours
• Local Time: GMT + 3 hours
• Government Offices: 07:00-14:00 Sundaythrough Thursday. Closed Fridays andSaturdays.
• Private Sector: Generally 08:00-13:00 and15:00-1800 Sunday through Thursday.
• Banks: Generally 8:30 - 13:00 and 15:00-18:00Sunday through Thursday.
Legal Framework
The commercial laws and legal system are underconstant review to ensure that they are
consistentwith international standards. Companies operatingin Bahrain are expected to follow the
internationalaccounting standards and are encouraged topursue good corporate governance.
Bahrain hasa zero-tolerance policy for money laundering and enforces best-practice international
standards of intellectual property, labour and environment protection.
Additional key features of the business legalframework in Bahrain include:
· No restrictions on the repatriation or remittanceof profits or capital.
· No restrictions on the import or export of localand foreign currencies.
· No tax on income, capital gains, sales, estate,interest, dividends or royalties.
· Gulf Co-operation Council (GCC) ArbitrationCentre, which settles commercial
disputesinvolving GCC citizens on the condition that theyinvolve a minimum of BD
15,000.
· The Kingdom of Bahrain permits 100% foreignownership of businesses in the most types
ofbusiness activities.
Regulation of the Financial Sector
The strength of Bahrain’s financial sector restsupon the regulatory regime imposed by the
CentralBank of Bahrain (CBB). The CBB is responsiblefor the licensing, supervision and
regulation of thefinancial sector in accordance with internationalstandards.
The CBB has introduced International AccountingStandards for locally incorporated banks and
hasalso increased the transparency of the financialposition of locally incorporated and publiclyquotedbanks by requiring them to publish their financialstatements on a quarterly basis.
The CBB’s Compliance Unit is committedto ensuring that the financial sector acts incompliance
with CBB regulations on anti-moneylaundering and countering the financing of
terrorism(‘AML/CFT’). The Compliance Unit also acts tocombat the risk of financial crime more
generallywithin the financial sector - such as fraud attemptson CBB licensees and their customers.
Business Ownership
100% foreign ownership of business is allowed.Sector-specific and/or company type
restrictionsmay apply. Please refer to Section C1 for details.
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Land Ownership
Bahraini and GCC nationals are permitted to ownland in all areas of Bahrain.
Land Ownership for Foreigners
Non-nationals and foreign companies are permittedto own property and real estate in newly
developedareas only, including:
• Manama Area, such as Ahmad Al-Fateh District, Hoora Area, Bu Ghazal Area, Northern
Districtof Manama including Diplomatic Area (areas ofhigh-rise residential and commercial
structurewith elevation of 10 storeys or higher).
• Seef District (elevations of 10, 5 and 3 storeys).
• Newly developed tourism areas such as DurratAl Bahrain, Amwaj Islands and Al-Areen
Desert Resort.
• Areas which fall within the sphere of the BahrainFinancial Harbour (BFH), the Bandar
Al Seef Area and Reef Island.
• Riffa Views and Bahrain Bay.
Property Rental
Renting residential or commercial property is afairly straightforward process for both citizens
andforeigners, who can deal with the landlord directlyor through a real estate agent. Proof of
identity,two to three months deposit and other standardconditions are required depending on the
rentalcontract.
Commercial Rates*
Office space (per square metre per month):
Diplomatic Area
BD 6 - 10
Seef Area
BD 8 - 13
Central Manama
BD 6 - 9
Bahrain Financial Harbour
BD 9 - 13
Al Moayyed Tower
BD 10 - 12
Retail space (per square metre per month):
Average
BD 16
Seef Mall
BD 20
Residential Rates*
Monthly rent for one-bedroom house/apartment:
BD 550 - 750
BD 180 - 300
Monthly rent for two-bedroom
Juffair
BD 750 - 1,200
Central Manama
BD 350 - 500
Adliya
BD 650 - 1,200
Seef Area
BD 800 - 1,200
Monthly rent for villas in high-end areas:
Busaytin
BD 1,500 - 1,800
Saar
BD 2,000 - 4,300
Municipality Fee 10% of rent (all types)
Juffair
Central Manama
Industrial Land
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The Kingdom of Bahrain’s Ministry of Industry &Commerce (MOIC) operates ten industrial
areascovering 2,288 hectares. The Ministry offers long-termleaseholds spanning 25 years.
Industrial areasin general are provided with all necessary servicessuch as roads, electricity,
sewage systems, waterand telecommunications. Projects establishedin the industrial areas receive
customs dutiesexemption on the import of capital equipment andraw materials used in the
production of the finalgoods, in addition to low electricity rates.
· Eligibility: All Bahraini and GCC nationals,foreign nationals and foreign companies.
· Rent: BD 0.5 - 0.7 per square meter per month.Rates are reviewed every five years and
may beincreased by a ministerial resolution. Increasesare capped at 30%.
i For more information, please contact:Bahrain International Investment Park
Tel: +973 17 467 373Fax: +973 17 467 300
Email: [email protected]: www.biip.com.bh
Infrastructure
Electricity & Water
The Electricity and Water Authority is the officialservice provider for water and electricity
utilityservices for domestic, commercial and industrialestablishments.
Tariffs and Service Rates
Electricity Rates
Domestic Residential Rate
BD 0.003 per unit (first 3,000 units)
BD 0.009 (next 2,000 units)
BD 0.016 (each extra unit)
Non-Domestic Tariff
BD 0.016 per unit (for all units)
Note: Electricity unit = 1 kilowatt hour (KWH)
Water Rates
Domestic Residential Rate
BD 0.025 per unit (first 60 units)
BD 0.080 (next 40 units)
BD 0.200 (each extra unit)
Non-Domestic Tariff
BD 0.300 per unit (first 450 units)
BD 0.400 (each extra unit)
Note: Water unit = 1 cubic metre ((m3)(m3 = 220 imperial gallons = 1,000 litres)
For more details and additional information onservices and procedures, please contact:
Electricity and Water AuthoritySubscriber Services Directorate
Manama: (+973) 17576576
Muharraq: (+973) 17322787
Isa Town: (+973) 17680222
Oil and Gas
The National Oil and Gas Authority (NOGA) is thegoverning body responsible for the allocation
of oiland gas in Bahrain. Bahrain Petroleum Company(BAPCO) is the main supplier and
distributor.
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For industrial projects requiring gas, the Ministryof Industry & Commerce liaises with NOGA
toauthorise gas allocation, upon which BAPCO willdeliver the gas to the project site.
For more information, please contact:
National Oil and Gas Authority (NOGA)
Tel: (+973) 17525511
Fax: (+973) 17293007
Telecommunications Services
The
Telecommunications
Regulatory
Authority(TRA)
regulates
Bahrain’s
telecommunicationsmarket, ensuring that the interests of subscribersand users are protected and
promotes effectiveand fair competition.
The TRA maintains a full list of authorizedtelecommunication service providers. The list canbe
accessed at: www.tra.org.bh.
Bahrain Telecommunications Company (Batelco)is currently the main provider of landline,
mobileand internet services.
For information on services, branches andbusiness hours, please visit: www.batelco.com
Zain Bahrain is another major provider of mobile,internet and other services.
For information on services, branches andbusiness hours, please visit: www.bh.zain.com.
Postal Services
Bahrain Post provides full postal services such aslocal and international mail as well as
additionalservices such as renewal of driving licenses, carregistration, vehicle insurance, and
renewal ofcommercial registrations. Post offices are locatedin numerous locations in Bahrain and
businesshours vary depending on location. All the servicesin detail, including procedures and
documentsrequired can be accessed at:
www.transportation.gov.bh.Express courierservices are also available through private
operatorssuch as DHL, EDEX, UPS, Aramex, and others.
Connectivity
Bahrain enjoys excellent air, land and maritimeconnections to the outside world. It boasts aworldclass international airport, well-designedmodern highways and a well-established seaport.In
addition, Mina Salman, a new super port withstate of the art cargo handling facilities, wasopened
in 2009.
Bahrain International Airport
Bahrain International Airport (BIA) is located on Muharraq Island, four kilometres north of
thecapital Manama, and within 15 minutes’ drive from the city centre. BIA serves as a
regionalhub for a significant number of internationalairlines, including cargo carriers and charter
flightoperators. The airport now handles more than 4.2million passengers a year.
The national carrier, GulfAir, operates more than 300 flights every week todestinations
worldwide. A second airline, BahrainAir, operates low fare flights to and from
BahrainInternational Airport, using a fleet of modernaircraft. It is expected that the status of the
airportas the Gulf’s regional hub will be enhanced furtherby the continued expansion and
upgrading offacilities.
In addition, BIA offers highly efficient air cargofacilities, with an annual capacity of 200,000tons.
Its 18,000 square metre Air Cargo Centre provides a full range of cargo handling
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services,including trans-shipment arrangements, a stateof the art customs clearance system, and
specialstorage arrangements. Break bulk facilities arealso available for consolidators and
bondedwarehousing for specialist companies.
For further information and details on flightschedules, please visit the Bahrain
InternationalAirport’s website at www.bahrainairport.com
King Fahd Causeway
The King Fahd Causeway, 27 kilometres in length, links Bahrain to Saudi Arabia. Major
population centres of the Eastern Province are within a 30-minute drive, with driving time to
Riyadh andKuwait averaging four hours. The Causewayserves as a major contributor to Bahrain’s
statusas a family retreat and business destination forsurrounding regional markets.
Bahrain Qatar Friendship Bridge
The Bahrain Qatar Friendship Bridge also referredto as Bahrain Qatar Causeway, 40 kilometres
in length, currently under construction, links Bahrainto Qatar, This flagship construction project
ofwhat will be the longest bridge in the world, isconsidered a quantum leap in strengthening
theeconomic and urban development of the two GCCstates. Traffic across the bridge is expected
toexceed 5,000 vehicles daily in the first years afteropening, and could reach up to 12,000
vehiclesdaily by 2025. The project also includes rail lines totransport passengers and cargo
between Bahrain,Qatar and the rest of the Gulf Cooperation Councilstates.
Seaports
· Mina Salman is the Kingdom’s major port.Opened in 1962, it is strategically locatedmidway
down the Arabian Gulf, providing keyaccess to the region for global shipping andsubstantial
storage services and facilities. Theport includes 15 berths, including 2 containership berths.
Its annual capacity is 2.5 milliontons.
· Khalifa bin Salman Port at Hidd. Opened in2009, with an area of 900,000 square meters,with
23,600 square meters of warehouses. Itsannual capacity is 2.5 million tons. It
includesfacilities for container, break-bulk handling, roro and passenger vessel handling.
For further information and details, please visitBahrain’s Customs and Ports website at
www.bahraincustoms.gov.bh.
Bahrain Logistics Zone
Located within a few minutes by road from Khalifabin Salman Port (KBSP) at Hidd, the Bahrain
Logistics Zone (BLZ) is the region’s first boutiquelogistics area offering a high quality
environmentto companies that meet its tenancy requirements.
It focuses on enhancing the offering of KBSPas a transit point for importers and exporters ofitems
requiring duty-free logistical, intermodal andvalue-added options. BLZ allows 100%
foreignownership, and provides services to international,regional and local companies seeking to
expandtheir operations throughout the region. BLZeffectively contributes to consolidating
Bahrain’sstatus as the main strategic centre of business and development in the Middle East.
Bahrain Investment Wharf
Bahrain Investment Wharf (BIW) is one of thelargest development projects in Bahrain, with
atotal cost of approximately US $ 2 billion, and theonly privately-owned, operated and
managedindustrial park in the Kingdom.
Covering an area of1.7 million square metres in the new Hidd Industrial Development Zone, this
groundbreaking projectis a mixed-use industrial, business, logistics,information technology,
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commercial and residentialdevelopment estate. BIW offers investors pre-serviced plots, supported
by state-of-the-art infrastructure and world class services.
BIW will develop business communities comprisinga number of specialist parks. The largest of
these,is an industrial park, followed by a services park,a logistics and supply chain park, and
lastly abusiness park and a residential park. The projecthelps to expand Bahrain’s light and
mediummanufacturing industry in areas such as textiles,rubber and plastics products, light
electronics,fabricated metal products, electrical machinery,paper, chemicals and furniture. BIW
alsoincorporates a hotel, exhibition hall and conferencefacilities, as well as accommodation for
tenantcompanies’ middle management and associated labour forces.
Entry and Residence Visas
A visa is required for all persons wishing to enterBahrain, with the exception of citizens of the
GulfCo-operation Council (GCC), and foreign GCCresidents employed in certain professions. A
visamay be sponsored or non-sponsored. Bahrain alsooffers instant e-Visas online for eligible
visitors. Aresidence permit is required for foreign investors oremployees to work in Bahrain.
E-Visa
Citizens of the following countries who wish toenter Bahrain for tourism or business can obtaina
two-week visit visa online (e-Visa) at the accesspoint in Bahrain:
Andorra, Armenia, Australia, Austria, Azerbaijan,Belarus, Belgium, Brunei, Canada,
China,Denmark, Georgia, Germany, Greece, Hong Kong,Iceland, Ireland, Italy, Japan,
Kazakhstan, Latvia,Liechtenstein, Lithuania, Luxembourg, MalaysiaMoldova, New Zealand,
Norway, Portugal, RussianFederation, San Marino, Singapore, Spain,Switzerland, Sweden,
Tajikistan, Thailand, Turkey,Turkmenistan, United Kingdom, Ukraine, UnitedStates of America,
Uzbekistan and Vatican City canobtain a two-week entry visa at the point of arrivalwithout
prearrangement or local sponsor. Their staymay be extended for a further two weeks.
Othernationals are required to obtain entry visas from theconsulates of Bahrain in their respective
countriesof residence, or visas issued by the GDNPR inBahrain by invitation from a Bahraini
company orcitizen, or by a foreign resident of Bahrain.
For more information on types of visas,please visit www.evisa.gov.bh. For details onimmigration
regulations and residency, pleaserefer to Section D of this Guide, or to theGeneral Directorate of
Nationality, Passportsand Residence website at www.gdnpr.gov.bh.
Financing Options
A wide range of credit and commercial loanarrangements are available to local andinternational
investors through the various Islamicand conventional banks and financial institutionsin Bahrain.
Financing is also available through theBahrain Development Bank and the Bahrain
StockExchange.
Bahrain Development Bank
The Bahrain Development Bank (BDB) providesa variety of financial services that are tailored
tomeet the needs of small and medium enterprisesin Bahrain and promote the development of
smalland medium sized projects in both the industrialand service sectors. This state-owned bank
assistsaspiring and existing investors to help initiate newprojects and businesses. It provides loans
at highlycompetitive interest rates, in addition to businessadvisory/counseling services and
training throughthe Entrepreneurship Development and Enterprise Creation Programme.
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Foreign-owned companies are eligible for partialfinancing, provided they meet certain criteria
suchas providing training and employment to a numberof Bahrainis.
Services of the BDB include:
• Short and long term composite loans forfinancing capital assets and core portion ofworking
capital.
• Equity participation in start-ups as well asexisting projects.
• Working capital finance for raw materials forprojects.
• Leasing of equipment.
• Arranging export finance for goodsmanufactured in Bahrain.
• Islamic Finance-Murabahah (cost-plus financing)facility.
• Business advisory and counseling services.
• Educational loans.
• Fisheries and agricultural loans.
For more information, please contact BahrainDevelopment Bank:
Tel: (+973) 17511111
Fax: (+973) 17534005
Email: [email protected]
Website: www.bdb-bh.com
The Bahrain Stock Exchange
The Bahrain Stock Exchange (BSE) presentsinvestors with the opportunity to raise
equityfinancing, provided that listing conditions are met.The Central Bank of Bahrain (CBB)
regulatesand supervises Bahrain’s capital markets with itschief priority being to maintain a
transparent, fairand orderly market by upholding and enforcinginternational standards and
protecting theinvestor, thereby protecting Bahrain’s integrity andreputation as the region’s
financial hub.
The CBB regulates and supervises allapplications for the listing of securities and anyother
instruments offered to the general public,approving applications on the fulfillment ofrequirements
and disclosures.The CBB also enforces international disclosurestandards, in order to enhance the
transparencyof the marketplace, and supervises the stockexchange, the clearing, settlement,
depository andcustodial systems, brokerage firms and marketmakers.
Listing Requirements for Domestic Companies:
Compliance with the following rules is aprerequisite for admission of Bahraini public
stockcompanies on the Exchange:
• The company must comply with the CommercialCompanies Law No. 21 for 2001 applicable
tostock companies.
• The company shall have been in existence fortwo Gregorian years, and shall provide twoaudited
annual balance sheets.
•The paid-up capital of the company must notbe less than BD 1,000,000 (One Million
BahrainiDinar), or the equivalent in any other currency,and the issued shares must not be less
than500,000 shares. At least 50% of the value of theissued shares must be paid-up.
• The issued share market value must not be lessthan the paid-up percentage of the share parvalue.
• The volume of trading in company share mustnot be less than the minimum limit specified
bythe Exchange.
• The number of registered shareholders in theCompany’s records must not be less than 100.
• The rights and obligations of each class withineach listed issue must be equal.
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• The net value of the assets of the companymust be approximately 20% greater than itspaid-up
capital.
The annual sales volume must not be less thanBD 500,000.
• The company must have realized profits in thetwo consecutive years preceding the date
ofsubmission of the application.
• The company must issue semi-annual financialstatements.
• The company must publish annual financialreports and audited financial statements withinthree
months after the end of the company’sfiscal year.
• The ordinary general assembly (AGM) of thecompany must convene at least once a yearwithin
the three months following the end of thecompany’s fiscal year.
• The company must maintain a transfer andregistration office in the Kingdom of Bahrain.
The company must comply with the listingagreement.
• The company shall have a sound financialposition in terms of its assets, liquidity,
balancedfinancial structure and efficient performance.
• The company must publish its financialstatements and results of operations in dailymedia prior
to its shares being approved fortrading on the Bahrain Stock Exchange.
• Any other conditions as stipulated by the boardfrom time to time.
Listing Requirements for Foreign Companies:
• The company must either be a public stockcompany, duly listed on the stock exchangein the
country of incorporation, or a closedcompany which has been established for atleast three years.
• The company’s paid-up capital must not be lessthan US $ 10,000,000.
• The company must have realized net profitsfrom its principal activities for the last three
yearspreceding the listing application.
• There must not be any restrictions, whetherin the company’s articles of association orby the
laws of the country of the company’sincorporation, on the freedom of transfer ofshare ownership
between traders.
• The company’s financial position must besound.
• The number of registered shareholders of thecompany must not be less than 100.
• The company shall issue an audited semiannualbalance sheet and an audited annualbalance
sheet.
• The company shall assign a representative officein the Kingdom of Bahrain to undertake
theregistration of shares, distribution of dividends,issuance of financial reports, and other
relatedissues.
• The company shall comply with the BSE’s listingagreement.
i For more information, please contact Bahrain
Stock Exchange (BSE):
Tel: (+973) 17261260
Fax: (+973) 17256362
Email: [email protected]
Website: www.bahrainstock.com
Economic Development Board
The Bahrain Economic Development Board(EDB) is a dynamic public agency with an
overallresponsibility for formulating and overseeing theeconomic development strategy of
Bahrain andfor creating the right climate to attract directinvestment into the Kingdom.
EDB’s inward investment strategy focuses onsectors in which Bahrain offers significant
strengths,including financial services, downstream industries,tourism, business services, logistics
and ICT.The EDB also helps companies interested ininvesting in Bahrain by acting as the first
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pointof contact to the Kingdom, understanding theobjectives of investors, providing them
withinformation regarding the relevant procedures forsetting up a business, and helping themform
anetwork of contacts in Bahrain.
Bahrain Chamber of Commerce & Industry
The Bahrain Chamber of Commerce & Industry(BCCI), established in 1939, is the leading
privatesector representative in the region.
Membership is open to all businesses registeredwith the Ministry of Industry and Commerce
(MOIC).Services provided by the BCCI include:
• Attestation of documents, certificates andcontracts.
• Studies in various economic fields.
• Provision of information on legislation, economicdata, and trade statistics.
• Participation in the settlement in commercialdisputes.
• Provision of a database on commercial andindustrial businesses and foreign trade statistics.
• Provision of information on exhibitions in Bahrainor abroad.
• Promotion of national exports.
• Promotion and marketing of the Kingdom ofBahrain and its business opportunities.
• Provision of information and promotion ofinvestment opportunities to its members.
• Organization of various symposia, conferencesand forums.
• Contribution and participation in federations ofchambers and joint chambers.
• Participation in various government committees.
• Representation of businessmen in all events andfor all purposes.
• Organization and supervision of the pricereduction season in collaboration withstakeholders in
the Kingdom.
• Support of national products.
i For more information, please contact BCCI:
Tel: (+973) 17229555
Fax: (+973) 17224985
Email: [email protected]
Website: www.bcci.bh
Trade Agreements
As a member of the World Trade Organization (WTO) and Gulf Co-operation Council (GCC),
Bahrain is committed to offering a variety of incentives to investors keen on accessing both
international and regional markets.
Bahrain-USA Free Trade Agreement (FTA)
Key benefits of the FTA to Bahrain’s citizens include:
• Opens the US market, which is considered to be the largest world market, to the Kingdom of
Bahrain, thus allowing the Kingdom to benefit from extensive investment opportunities in a
number of vital economic fields and activities.
• Allows all Bahraini products listed on the special tariff schedules to enter into the US markets
virtually duty-free.
• The United States allows instant duty-free entry of all of Bahrain’s current exports including
industrial and agricultural consumer products.
• Allows Bahraini telecommunications companiesfree access to the US
telecommunicationsmarket.
• Contributes to improving the standard of livingof Bahrainis.
• Provides numerous opportunities for exchangeof exports of goods between the two countries.
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• Provides significant opportunities for thegrowth of investment in the Bahraini healthcaresector
through the introduction of state-of the-art medical technologies and systems, thequalitative
improvement of trade and provisionof all types of healthcare services.
• Contributes to the strengthening of the buildingand engineering sectors through
increasedcohesion and interaction with US companies.
• Contributes to the boosting of the Kingdom’sefforts aimed at the protection of theenvironment,
intellectual property, trademarks,digital products, and inventions.
Key benefits of the FTA to US investors include:
• Allows investment opportunities for US investorsand companies in industry, services,
technologyand electronic commerce, with full foreignownership of industrial projects.
• Allows US companies to establish offices andbranches in Bahrain, through which to enter
intothe fast growing markets of the GCC Region.
• Exempts all US industrial and agriculturalprojects from custom duty, with the exceptionof 80
products to be exempted over a 10-yeartransition period.
• Allows US telecommunications companies freeaccess to the Bahraini
telecommunicationsmarket.
• Liberalizes Bahrain Stock Exchange.
• Liberalizes Bahrain’s insurance market.
• Strengthens legal and procedural transparency,
and ensures full compliance with the protectionfor intellectual property, and improved laborand
environmental regimes, in accordancewith international standards and World TradeOrganization
conditions.
Other Trade Agreements
In addition, Bahrain has economic agreements withmore than 60 countries including China,
Singapore,UK, India, France and Egypt. For more information, please visit Ministry of Finance’s
website at: www.mof.gov.bh
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