The Kingdom has many attributes that encourage investment by foreign investors. Its political stability, excellent communications facilities, easy access to the Saudi Arabian market, relatively skilled work force with a good standard of spoken English, low cost of fuel and power, absence of personal and corporate taxation, and lack of exchange and profit-repatriation controls are factors that make it the ideal place for many businesses to locate their manufacturing or service functions for the region and also makes the kingdom a perfect centre for operations in the fast growing Gulf, Middle East and North Africa (MENA) markets. Bahrain has a tried-and-tested legal and regulatory environment in which investors can trust to fairly protect their interests in an open and transparent manner. To promote high business standards, the government has created a number of regulating bodies to support business development. Because of its communications and transportation infrastructure, regulatory structure, and cosmopolitan outlook, Bahrain is home to many multinational firms that do business in the region.

Business etiquette language & culture

Language

Although Arabic is the main language spoken in Bahrain, English is very much popular among the urban educated and modern population. English is also the language in which business is handled with outside nations in Bahrain.

Business hours

The public sector works from Sunday to Thursday, 7.30am to 4.15pm; the private sector works form 8am to 1pm and from 3pm to 5.30pm, five days a week.

Business Meetings

In Bahrain, appointments are necessary; meetings are not private until a relationship has been developed or there is the need to discuss matters confidentially. Generally Bahrainis have an ‘open-door’ policy even when they are in a meeting. In the Middle Eastern culture, it is often the case that initial meetings are focused on relationship building. Much time may be spent in light conversation and it is advisable to establish an atmosphere of openness and friendship before embarking on business matters. Decisions are often made more slowly in the Middle East than in some other cultures, partly because decisions often take place by consensus. It is advised to consider these realities into the way you approach business propositions.

Negotiation

Good personal relationships are important since trust is required in order to conduct business. For Bahrainis, the actual meeting is more important than the timeliness or outcome. Companies are hierarchical. The highest-ranking person reaches decisions. In negotiating never use high-pressure sales tactics; also if the lead negotiator is changed negotiations will start over.  It is important that proposals and contracts be kept simple.   Why invest in Bahrain Simplified administrative and legal systems and procedures, along with rapid industrialization, assure excellent opportunities for potential foreign investors considering Bahrain as a Middle Eastern hub for business activities.

» No Tax for companies or individuals
» Custom duties are low
» Corporate friendly policies
» Investor friendly legal system
» Simplified Business procedures
» Upcoming Banking and financial hub
» Tremendous scope for growth and open market for opportunities
» People are friendly and culture is conducive for business growth
» Good infrastructure and government has also started initiatives to make it better
» There is lot of freedom in Bahrain
» Major port hub in the Middle East
» Easy access to all Middle east markets
» There is good law and order in the land
» Flourishing entertainment and tourism industry
» Good social life and variety of food
» Introducing Corporate governance

Business incentives

Bahrain offers a variety of incentives to investors;

» duty free merchandise for re-export
» duty free import of materials and machinery for manufacturing
» low costs for energy, utilities and rents
» 100% repatriation of capitals and profits
» 100% ownership of business to foreigners and land to foreigners

The kingdom offers one of the most competitive costs for operating any business as compared to other countries in the Middle East. Significant among these are electricity rebates at 50% for initial 5 years and customs duties rebate at 100% for initial 5years to all industrial units and a tariff production at 10% to 20% is given to pioneering or downstream industries.

Taxation

Resident/Non-resident

Bahrain does not operate a general corporation tax system but only taxes the income of oil companies. Oil companies are subject to tax on any profits generated from exploring for, producing, or refining oil in Bahrain regardless of the company’s place of incorporation. Bahrain is a tax free economy with no withholding tax, no corporate tax (non-oil and gas companies), no income tax and no VAT, no property tax or no production tax, which significantly contributed to a great influx of foreign investors in Bahrain. 

Corporate tax

There is no corporate tax in Bahrain. Bahrain corporation tax system taxes only income of oil companies at a flat tax rate of 46%. Residence – There is no corporate tax for most companies in Bahrain, but income tax is levied on the profits of oil companies. Corporate income tax is only levied on oil, gas and petroleum companies engaged in exploration, production and refining, regardless of where the company is incorporated.