In this page: FDI in Figures | What to consider if you invest in Bahrain | Procedures Relative to Foreign Investment | Investment Opportunities
The Kingdom of Bahrain is very open to foreign investment and has one of the highest FDI stock-to-GDP ratios in the region. According to UNCTAD's World Investment Report 2024, FDI to Bahrain increased by 147.8% y-o-y in 2023, reaching a record level of USD 6.8 billion. At the end of the same period, the FDI stock reached USD 43 billion, around 96.4% of the country’s GDP. Data from Bahrain’s Information & eGovernment Authority show that the leading contributors to Bahrain’s FDI stock are Kuwait (36%), Saudi Arabia (23%), and the United Arab Emirates (10%). In 2024, the Bahrain Economic Development Board (EDB) attracted direct investments totalling BHD 680 million (USD 1.804 billion) into the national economy, with the industrial sector receiving the largest share, followed by the information technology, tourism, and financial services sectors.
Bahrain enjoys an open and attractive economic and regulatory environment for international companies looking for a gateway to Gulf and Middle East markets. The country has the lowest corporate and personal taxes in the Gulf, without any restrictions for free trade zones. Foreign business ownership is fully permitted in most economic activities, eliminating the need to resort to a local partner in most cases. There are no limitations on the repatriation of capital, profits, or dividends, except for income generated by companies in the oil and gas sector, which are subject to a 46% tax rate on profits. The excellence of the country’s logistical infrastructure is also a major factor of attraction. Moreover, Bahrain offers a large, highly skilled pool of financial workers, a regulatory structure that is both advanced and internationally well-regarded, and a physical connection to Saudi Arabia – by far the largest economy in the Gulf. Besides strong regional competition, FDI in Bahrain has been limited by the slow advancement of the privatisation programme and a rigid labour market. The absence of true reconciliation between the Sunni monarchy and the predominantly Shiite opposition constitutes a hindrance to FDI. Moreover, new emerging trade centres in the Gulf increased the competition to become a regional financial crossroad. Overall, Bahrain is a significant economic hub in the Gulf Cooperation Council (GCC) area and offers one of the most accommodating investment climates to draw in foreign companies. The national currency is freely transferable and tied to the U.S. dollar. On 17 October 2024, Bahrain amended foreign ownership conditions, effective from 18 October 2024. Decision Number 53 of 2024 allows foreign companies to sell certain goods without a local partner and fully own their business if they operate in at least ten countries or earn over EUR 750 million annually. Companies dealing in valuable goods still need government approval. Additionally, companies with foreign partners must have at least 51% Bahraini ownership to be authorized distributors. The minimum capital for foreign-owned companies in Bahrain has also been reduced from BHD 2 million (~EUR 5 million) to BHD 100,000 (~EUR 240,000). Moreover, Bahrain has introduced a 15% Domestic Minimum Top-Up Tax (DMTT) on profits for large multinational enterprises (MNEs) with consolidated revenues exceeding €750 million, effective from January 1, 2025. This measure aligns Bahrain with international tax standards under the OECD's Base Erosion and Profit Shifting (BEPS) framework. The Kingdom ranks 72nd among the 133 economies on the Global Innovation Index 2024 and 55th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
---|---|---|---|
FDI Inward Flow (million USD) | 1,021 | 1,779 | 1,951 |
FDI Stock (million USD) | 31,705 | 33,484 | 35,436 |
Number of Greenfield Investments* | 24 | 30 | 30 |
Value of Greenfield Investments (million USD) | 1,044 | 1,007 | 2,242 |
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
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Latest Update: May 2025