Bahrain - Country Commercial Guide
Market Overview
Last published date: 2022-07-31

Bahrain is considered one of the most open economies in the Middle East and North Africa (MENA) region.  With several free trade agreements, excellent infrastructure, and strong financial institutions, Bahrain is well positioned to provide traders and investors access to regional and international markets.

Bahrain is only one of two Gulf Cooperation Council (GCC) member countries to have a Free Trade Agreement (FTA) with the United States.  In most sectors, Bahrain permits 100 percent foreign-ownership of a business or branch office, without the need for a local partner, and has no tax on corporate income, personal income, wealth, capital gains, withholding, or death/inheritance.  Bahrain has no restrictions on repatriation of capital, profits or dividends.

The Heritage Foundation ranked Bahrain as the world’s 74th freest economy in its 2022 Index of Economic Freedom, behind only Qatar and the UAE among GCC member states.  Bahrain’s overall score in the 2022 index dropped by 7.9 points from 2021. .

Many U.S. businesses have done well in Bahrain and are dominant in major sectors such as oil and gas, engineering, and information and communications technology (ICT).

As post-COVID-19 global economic recovery continues, Bahrain’s real gross domestic product (GDP) rose by 2.2 percent in 2021 while nominal GDP rose by 11.9 percent for the same year.  2021 marked positive real GDP growth rates in the non-oil sector which recorded 2.8 percent growth, while the oil sector contracted by 0.3 percent.  

InterNations, a global network of people living and working overseas, ranked Bahrain as the 12th most favorable destination for expatriates worldwide in 2021, rising from 23rd place overall in 2020.  In the survey, Bahrain ranked first among GCC counterparts across several categories, including ease of settling in and personal finance.d face-to-face contact also is important.

Political & Economic Environment:  State Department’s website for background on the country’s political environment.