According to the 2022 Index of Economic Freedom published by the Heritage Foundation, Bahrain ranked first in MENA for financial, investment, and trade freedom. Amongst MENA countries, Bahrain ranked 4^th for overall economic freedom.

According to the report, Bahrain’s “overall investment framework remains transparent, and foreign and domestic investors are treated equally. The financial system remains vibrant and generally free from government involvement. No restrictive measures have been implemented in the banking sector during the past year,” and “the government maintains a pro-business commercial environment and supports business start-ups.”

The 2022 Index of Economic Freedom measures the level of economic freedom based on 12 factors, grouped into four categories: rule of law, government size, regulatory efficiency, and open markets. 

Commenting on the report, Ali Al Mudaifa, Chief Investment Officer at Bahrain EDB, said: “Bahrain’s high ranking amongst countries in the region is a reflection of the country’s business-friendly environment and forward-looking regulations. We’ve got exciting plans ahead of us in line with the Economic Recovery Plan, which aims to attract investments worth US$2.5 billion into the country by 2023 through the enhancement of our overall business environment.” Companies in Bahrain benefit from a range of competitive advantages and opportunities, which can be identified and leveraged with the support of the EDB’s team that has the expertise and resources to get companies off the ground. These competitive advantages include the country’s 45% operational cost savings compared to the rest of the region, and its pioneering regulation, which is reflected by Bahrain ranking 2nd globally for tax burden in the 2022 Index of Economic Freedom.

• GCC-based fintech, launches in Bahrain to expand its regional operational hubs in the MENA region.
• Enables 80% of the region’s consumer payments through highly adopted country specific local payment networks with a unified relationship, technology and clearing process.
• Resolves the challenges of the region’s fragmented payment networks so international players may unlock the true potential of MENA’s ecommerce market.

The GCC-based fintech company, Tap Payments, has launched its Bahrain hub in 2020. Over the past year, the company has onboarded around 30,000 new merchants across the region. This is a result of the company’s innovative solutions that can cater to regional and international players looking to break into the GCC booming e-commerce market, currently worth an estimated $29 billion. 

Tap Payments is serving merchants worldwide due to its capacity to tailor payment solutions in the MENA region with its multidimensional approach that addresses payment clearing, product, technology, relationship, and the regulatory environment. The company connects players around the world to the region through its payment infrastructure by facilitating connection to the highly adopted local payment networks in Saudi Arabia, UAE, Kuwait, Bahrain, Qatar, Oman, Jordan, Lebanon and Egypt.

In 2020, Tap Payments set up operations in Bahrain to take advantage of its advanced financial services sector, best value operating model and progressive legislations. Bahrain is home to the region’s oldest and most established banking and financial services sector, with over 350 financial institutions. The sector, which accounts for 17.3% of non-oil GDP in the Kingdom, benefits from a stable, predictable, and forward looking regulatory and business environment. Financial services continue to be a key contributor to Bahrain’s economy and will play a critical role in the Kingdom’s economic recovery plan which was announced in October 2021.

There are currently five GCC country specific local payment networks and another two in Egypt, in addition to the internationally known payments networks. This means that it is an expensive process for e-commerce companies to expand their offering regionally. Tap Payments provides the ease of doing business in the region without the hassle of setting up offices, licenses, and bank accounts in each country due to its multidimensional approach.

Tap Payments’ system unifies the commercial and technical aspects of each local payment network so that businesses may instantly accept payments from across the region. The company’s solutions include a payment gateway that accepts payments online and on mobile, as well as peer-to-peer payment request solutions so businesses can send payment links to customers.

“We are pleased with the growth rate of our operations in Bahrain, thanks to the best-in-class business and regulatory environment. We are keen to operate under a developed regulatory environment that attracts financial innovation. We appreciate the welcoming environment that the EDB has put in place to attract our investment in Bahrain and value the role of the CBB in guiding us through establishing a healthy regulatory setup that supports our financial activities in the country. In less than a year, our local team was able to secure a significant number of clients in Bahrain and the wider region.” said Ali Abulhasan, Co-Founder and CEO of Tap Payments.

Abulhasan said: “With our operating model, we are filling a region-wide payment solutions market gap for any size of business with a special angle focused on SMEs, at a very competitive value proposition. Tap Payments’ business model is profitable and less risky. Our solution means customers can buy products online from another country in the GCC while still using their home country’s payment method and currency. These local payment networks make up a huge percent of online payments in most of the GCC countries – 65% in Bahrain, 80% in Kuwait and 70% in Saudi Arabia. So, businesses need to consider how critical their reach to the markets is and no longer downplay their impact.”

Dalal Buhejji, Executive Director – Investment Origination at Bahrain’s Economic Development Board (EDB), said: “We are delighted to see Tap Payments’ rapid growth in Bahrain, benefiting from our strong, agile and pioneering financial services ecosystem. By working with companies like Tap Payments, we continue to encourage growth in e-commerce, a sector that is expected to reach $50 billion across the GCC by 2025. The young, tech-savvy population we have here will supply Tap Payments’ new hub with all the local talent it needs. In fact, over 65% of the financial services workforce in the Kingdom are Bahrainis.”

• Bahrain real estate transactions reach US$2.8 billion compared to some US$1.9 billion in 2020

Bahrain’s real estate transactions value rose by 46% in 2021, to US$2.8 billion (1,046,162,080 BHD), compared to US$1.9 billion (717,436,872 BHD) in 2020, according to figures released by Bahrain’s Survey and Land Registration Board. The total real estate transactions hit 26,136 in 2021, an increase of 35% compared to 19,405 transactions in 2020.

The growth coincides with several major developments, including Bahrain’s recently announced National Economic Recovery Plan. The plan aimed to drive economic growth based on five main pillars, including the launch of strategic projects valued at over US$30 billion in various sectors, including infrastructure, industrial, housing, tourism, and healthcare.

The housing segment of the plan includes the “Sharaka” programme, which allows private developers to bid for contracts for government land, in line with the government’s commitment to strengthening its partnership with the private sector and providing quality houses for citizens. The programme is set to expand over the coming years to include more than 16,000 housing units.

Bahrain’s real estate sector is a popular destination for investments, offering a multi-dimensional marketplace that caters to the growing demand in the Kingdom. As demand surges, residential, retail, and tourism properties present a unique investment opportunity.

The Bahrain Economic Development Board (Bahrain EDB) has signed a Memorandum of Understanding (MOU) with the Japan External Trade Organization in Dubai (JETRO Dubai). This new partnership will further strengthen relations between the Kingdom of Bahrain and Japan, resulting in a stronger partnership, and one helps to highlight Bahrain as an investment destination for Japanese companies.

The signing ceremony was held on December 12^th 2021, at the Bahrain Pavilion at EXPO 2020 Dubai, followed by speeches and a reception attended by representatives from both parties. 

“Bahrain’s strategic location coupled with its strength in sectors such as logistics, ICT, and finance makes it an attractive destination for Japanese investments,” said Nobuhiko SASAKI CEO/Chairman of JETRO. “Through this MoU, we look forward to creating new opportunities for Japanese companies looking to launch or expand businesses throughout the Middle East.”

“Bahrain’s developed regulations, competitive operating landscape, and skilled workforce are some of the key reasons why we continue to be an attractive destination for international investments from various markets,” said H.E. Khalid Ebrahim Humaidan, Chief Executive of Bahrain EDB. “We are excited for this partnership which will further solidify Japan as a key strategic market for us, and we look forward to a fruitful collaboration with Jetro.

The MOU between Bahrain EDB and JETRO Dubai, has several key aims, including:

• Exchange of information in order to attract investment in both countries.
• Creating interaction opportunities between companies in Japan and the Kingdom of Bahrain in order to facilitate investment in various areas.
• Providing advice on activities by both Parties which will promote the development of a two-way economic and investment cooperation.
• Paving the way for economic and investment cooperation between companies in Japan and companies in the Kingdom of Bahrain.
• Promotion of strategic sectors with mutual benefits to both the Kingdom of Bahrain and Japan.

As a gateway to the region’s US$1.4 trillion GCC market, Bahrain also provides unique technical skills. In fact, Bahrain was recently ranked as 1st in the GCC for availability of advanced computer programming talent in ICT as a percentage of the population, according to the International Telecommunication Union (ITU).

Japan’s current FDI in Bahrain is already amongst the top 10 by stock and flows and Bahrain looks forward to growing this ranking further through initiatives such as this MOU that will facilitate more Japanese corporations to establish presence in the Kingdom. As referenced above, Bahrain has also recently embarked on a National Economic Recovery Plan to drive economic growth based on five main pillars including, enhancing the overall business-friendly environment to attract foreign direct investments and create new investment opportunities across the Kingdom by launching over US$30 billion of strategic projects. Find out more about these projects through the website www.invest.bh.

• Bahrain also ranks first globally in Islamic finance regulation
• Value of Sukuk issued in Bahrain increased by 40% to USD5.3 BN, and Net Asset Value of Islamic Funds increased by 142% to reach $27 MN

Bahrain has ranked fourth in the world and second in MENA for Islamic finance development according to the 2021 Islamic Finance Development Indicator – IFDI 2021 by Refinitiv, a London Stock Exchange Group (LSEG) business, the world’s leading provider of intelligent information for businesses and professionals.

The Islamic Finance Development Indicator (IFDI), which provides a detailed look at the current state of the industry measures the overall development in 135 countries based on quantitative development, knowledge, governance, awareness, and corporate social responsibility CSR (Charities and Qard Hasan). The report places Bahrain first globally for Islamic finance regulation and news. Amongst MENA countries, Bahrain ranked first in awareness, governance, corporate social responsibility activities and Islamic finance knowledge. Bahrain also tops the ranking in the region for Islamic banking, and corporate governance.

Commenting on Bahrain’s global position as a leader in the development of Islamic finance, Mr. Khalid Hamad Al Hamad, Executive Director of Banking Supervision at the Central Bank of Bahrain (CBB), said, “We have seen the total value of Islamic finance assets reach US$ 102 billion in Bahrain in 2020, making Bahrain among the top 10 countries globally in Islamic finance & banking assets. This clearly demonstrates that Bahrain has become the regional hub for Islamic finance supported by a robust and business-friendly regulatory framework that has been recognised as industry-leading by the IFDI report.

“We will continue our efforts to further develop the financial services ecosystem. This industry is the largest contributor to GDP after oil, at 17%, and such efforts are in line with the recently announced Economic Recovery Plan which includes a number of growth and development initiatives with the aim of increasing the contribution of non-oil sectors to GDP.”

According to the report the net asset value of Islamic Funds in Bahrain during 2020 increased by 142% to reach $US27 million and the value of Sukuk issued increased by 40% to USD5.3 billion when compared to 2019. Additionally, the number of institutions offering degrees in Islamic Finance increased by 14%, contributing to Bahrain attaining 2^nd position in the GCC for Education in Islamic finance. 

The report, which is in its ninth edition and entitled Advancing Economies, shows that the world’s Islamic finance industry saw double-digit growth of 14% in 2020 to a total US$3.37 trillion in assets. IFDI projects the size of the Islamic finance industry to rise to $4.94 trillion in 2025. The report also forecasts that digitisation and sustainable finance will continue to be main trends in 2022 and beyond. To view the Islamic Finance Development Report 2021, please visit this link.

• Copper tube manufacturer eyes $1 billion of exports over next five years from Gulf logistics hub
• Bahrain’s FTAs and access to $1.4 trillion GCC market help firm to capitalise on growing demand for copper tubing

Copper tube manufacturer Mueller Middle East (MME) exceeded $100 million in global exports from its base in Bahrain and is targeting $1 billion of exports over the next five years. 40% of MME’s global exports over the last year were to the Kingdom of Saudi Arabia and the UAE, followed by Egypt and Jordan.

MME, based in Bahrain, is currently the only copper tube manufacturing facility in the MENA region. The company exports to more than 10 countries, with the US, Canada, Egypt, KSA and UAE making up the largest share. Most of MME’s products are used by Air Conditioning and Refrigeration Original Equipment Manufacturers.

MME commenced operations in Bahrain in 2018 and began to ramp up production from mid-2019 in a bid to grow market share. Despite global supply chain disruptions caused by Covid, MME was able to leverage Bahrain’s free trade agreement (FTA) with the US. The firm’s exports to the US accounted for over 4% of total Bahrain-US exports in the first half of 2021, according to the United Nations Comtrade database.

Commenting on the announcement, Hesham Alabbar the General Manager of MME said: “This milestone represents the first major step in establishing MME as a serious player in the copper tubing market. Proud of the hard work that the team put in over the last couple of years. We have our eyes set on $1 Billion in exports over the next 5 years,”

Due to its FTAs and easy access to the $1.4 trillion GCC market, including Saudi Arabia, which is 40 minutes away by road, Bahrain is seen as a destination of choice for international manufacturers and distributors. Manufacturing is one of the most important contributors to Bahrain’s economy, accounting for around 13.8% of GDP as of Q2 2021. Bahrain is seeking to attract more manufacturers to the country as part of its economic diversification.

Ali Al Mudaifa, Executive Director – Investment Origination at Bahrain’s Economic Development Board, said: “We are pleased that MME has been able to use Bahrain’s regional and international FTAs so effectively. The company’s trade milestone is a testament to the Kingdom’s business-friendly regulations and easy access to regional and international markets.

“The pandemic has demonstrated the value of robust supply chains and easy, duty-free access to key markets. Bahrain’s position as a leading logistics hub and gateway to the Gulf and beyond has enabled several major manufacturers in the Kingdom to grow exports during the pandemic. We support MME’s aim to reach $1 billion worth of exports over the next five years and hope to assist more international manufacturers in their export strategies in the coming years.”

Demand for copper tubing and other metal and alloy products is increasing throughout the region as construction projects resume in the wake of the pandemic. According to IMARC Group, the global copper pipes and tubes market is expected to reach a volume of 5.5 million tonnes by 2026, up from 4.5 million in 2020.

The Gulf is a key supply chain hub for the global manufacturing sector and Bahrain is one of the main distribution centres in the region. Home to several major logistics groups, including DHL, Bahrain is a springboard to neighbouring markets. Trade between Bahrain and the US reached $941 million, in the first half of 2021, up from $783 million in H1 2020.