Economy of Bahrain

In a region experiencing an oil boom, Bahrain has the fastest growing economy in the Arab world, the United Nations Economic and Social Commission for Western Asia found in January 2006. Bahrain also has the freest economy in the Middle East according to the 2006 Index of Economic Freedom published by the Heritage Foundation/Wall Street Journal, and is twenty-fifth freest overall in the world. In 2008, Bahrain was named the world's fastest growing financial centre by the City of London's Global Financial Centres Index.

In Bahrain, petroleum production and processing account for about 60% of export receipts, 60% of government revenues, and 30% of GDP. With its highly developed communication and transport facilities, Bahrain is home to multinational firms. A large share of exports consists of petroleum products made from imported crude oil.

• Bahrain's fast-growing economy attracts a higher proportion of foreign investment than any other Gulf State. The reasons for that include:



• Strategic location at the heart of the Arabian Gulf, providing ideal access to the GCC



• 100 per cent foreign ownership for most categories of business



• Highly favourable tax environment, with no corporate, personal, value-added or withholding tax



• Sustained low rate of inflation of under 2 per cent a year



• No restriction on repatriation of capital, profits or dividends



• Cost-efficient, trained and bilingual human capital



• Full customs duty exemption on capital goods and goods destined for re-export, raw materials for manufacturing, semi-finished commodities imported for further processing, imports required for development projects, and initial import of capital goods by a manufacturing company



• Modern high standard of living with a cosmopolitan family atmosphere



• World class international airport and regional air traffic hub



• Causeway connection to Saudi Arabia, the largest single market in the region, with new causeway connection to Qatar planned



• Mature legal and administrative infrastructure

Individual projects are developed based on the four core themes which will deliver a better economic environment for business:

• From red tape to red carpet: creating a business friendly environment



• Government as regulator not operator: reducing the role of government in the economy and allowing the private sector to drive growth



• Fairness and accountability: reforming the regulatory and judicial system and improving enforcement



• Stimulating private sector opportunities: launching targeted initiatives to stimulate private sector growth