Identifies common practices used in selling in this market, including sales material that needs to be in the local language.
A carefully selected local partner can advise U.S. firms on advertising, promotion, and pricing. Due to cultural differences, techniques and marketing language that are effective in the United States may not be effective in Bahrain. A local partner can help navigate language and cultural issues.
Trade Promotion and Advertising
Bahrain-based trade shows can provide U.S. firms with an opportunity to increase brand awareness, identify investment opportunities, and locate trade partners, importers and distributors. The Bahraini government wants to attract new exhibition and conference participants and expand Bahrain’s role as a regional exposition and conference hub. Plans are underway to complete a new exhibition hall near the Bahrain International Circuit in 2022.
The Bahrain EDB (https://www.bahrainedb.com/), Bahrain Tourism and Exhibitions Authority (http://www.beca.bh/ ), Al Hilal Group (https://www.alhilalgroup.com/), and Informa Markets (informamarkets.com) are Bahrain’s principal agencies for organizing local and international trade shows and exhibitions. Leading exhibitions in Bahrain include:
- Gateway Gulf Investor Forum: www.gatewaygulf.com
- The Bahrain International Air Show: www.bahraininternationalairshow.com
- Jewellery Arabia: www.jewelleryarabia.com
- The Middle East Oil & Gas Show & Conference: www.meos-expo.com
- The Bahrain International Defense Exhibition and Conference: www.bahraindefence.com
Bahrain hosted the Global Entrepreneurship Congress (GEC) in 2019, an event highlighting Bahrain’s efforts to serve as a regional conference and entrepreneurship hub.
The Bahraini government does not levy sales tax on goods or services and there are no corporate taxes. However, the Bahraini government introduced an excise tax in 2017 that imposes taxes of 100 percent on tobacco and energy drinks and 50 percent on soft drinks. The Bahraini government introduced a Value Added Tax (VAT) in early 2019 in conjunction with other GCC member governments. Under the VAT, most goods and services are taxed at a rate of five percent. No tax is levied on several categories of products and services, including basic foodstuffs, medications, healthcare services, books, new building construction, education, local transportation, and oil and gas. Businesses that sell these goods and services are entitled to claim a credit for VAT paid on related expenditures.
Most restaurants charge a 10 percent hospitality tax, plus an additional 10 to 12 percent “service charge,” a fee that is not generally passed on to wait staff.
Shipping generally adds a considerable cost to items manufactured in the United States, which already face stiff competition from European and Asian suppliers. This disadvantage is periodically counterbalanced by exchange rate shifts between the dollar and European and Asian currencies.
Hard bargaining is common and expected in the local souqs (traditional markets) of Manama and Muharraq, where buyers generally ask for discounts and vendors inflate their initial offers accordingly.
Sales Service/Customer Support
After-sales service directly affects a product’s reputation in Bahrain. A good agent/distributor relationship to facilitate quality service is crucial to success in the Bahraini market. Opening warehouses and after-sales offices in the Gulf region to dispatch goods efficiently can help enlarge a company’s client base. Agents who offer superior after-sales service have a competitive advantage over the medium and long term.
Local Professional Services
Professional service firms are available in the Bahrain market to help companies set up their businesses seamlessly and in a timely manner. Foreign companies normally use the services of:
- Business establishment consultants
- Business centers
- Banks, which in some cases can set up a company’s operations in Bahrain.
- Auditing Firms
The Bahrain EDB (https://www.bahrainedb.com/) and the MoICT Bahrain Investors Center (www.moic.gov.bh) offer guidance and support to foreign investors, especially during the early stages of establishing a business.
U.S. Embassy Manama’s Commercial Section (ManamaCommercial@state.gov) offers commercial services to assist U.S. companies in taking advantage of new business opportunities in Bahrain, including trade counseling, market intelligence, business matchmaking, and commercial advocacy.
Principal Business Associations
The main business associations in Bahrain are the:
- American Chamber of Commerce (AmCham): http://www.amchambahrain.org/
- Bahrain Chamber of Commerce and Industry (BCCI): www.bahrainchamber.bh
- Bahrain Economic Development Board (EDB): https://www.bahrainedb.com/
- Bahrain Businessmen’s Association: http://www.bbma.bh/
- Bahrain Businesswomen’s Association: https://bahrainbusinesswomen.com/
- US-Bahrain Business Council: https://www.usbahraincouncil.com/
Limitations on Selling U.S. Products and Services
The U.S.-Bahrain Bilateral Investment Treaty (BIT) provides benefits and protection to U.S. investments in Bahrain, such as “most-favored nation” and “national treatment.” The following are the only limitations on selling U.S. products and services in Bahrain:
- Alcoholic drinks
- Import of all types of waste and treatment, storage and dumping of radioactive materials and toxic waste in Bahrain
- Import, manufacturing and dealing of asbestos and its by-products (not including asbestos removal)
- Import and industrial use of restricted chemicals
- Import of automatic cigarette vending machines
- Letter post (exclusive to Bahrain Post)
MoICT maintains a small list of business activities that are restricted to Bahraini ownership. These include: press and publications, Islamic pilgrimage, clearance offices, workforce agencies, fisheries, and dredging or oil exploration. The U.S.-Bahrain FTA outlines all activities in which the two countries restrict foreign ownership.