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Executive Summary
Bahrain strives to become a leading, high-quality healthcare provider in the Gulf region. The Government of Bahrain (GOB) sees the healthcare sector as integral to Bahrain’s progressive evolution into a service-oriented economy. Bahrain’s healthcare expenditures – both for inpatient and outpatient services – have increased. Bahrain is investing in healthcare infrastructure, including hospitals, clinics, upgrading medical appliances, and establishing a genetic disease research center.
Bahrain’s 2019-2022 Government Action Plan calls for restructuring the health system by implementing a new national health insurance program, beginning in 2019. Under the plan, Bahrain is shifting from offering free health care to all nationals and residents, to a system of mandatory insurance that provides full government-subsidized insurance to nationals and partially subsidized insurance to expatriate residents.
Bahrain has a network of over 700 health facilities, and it is accrediting new facilities each year. Bahrain offers 100% foreign ownership; registering a company in Bahrain is relatively simple. A local partner is not required but may be advisable. The United States (U.S.)-Bahrain Free Trade Agreement (FTA) facilitates the export of U.S.-made products duty free to Bahrain.
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Market Entry
The Supreme Council for Health oversees the medical services strategy in the Kingdom, alongside the National Health Regulatory Authority (NHRA), which regulates the healthcare system. The Ministry of Health (MoH) Pharmacy and Drug Control Directorate monitors and controls the import and distribution of medical devices and pharmaceuticals. The Bahraini pharmaceutical market depends on imported drugs. The GOB requires that pharmaceutical products be imported directly from a manufacturer with a research department. Drugs and medicines may be imported only by a drug store or pharmacy licensed by the Ministry of Industry, Commerce and Tourism (MOICT) after MoH approval. Before the approval of any medicine, at least two other Gulf Cooperation Council (GCC) countries – one of which is required to be the Kingdom of Saudi Arabia – must approve licensing.
Although Bahrain offers 100% ownership, it is advisable for U.S. companies to designate a local agent or representative to conduct business in Bahrain. It is also advisable that companies work with local legal counsel to draw up contractual agreements and to establish a presence in Bahrain when bidding on GOB tenders. The U.S.-Bahrain FTA provides that there are no customs duties on medical equipment manufactured in and exported from the U.S.
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Current Market Trends
Morbidity and mortality statistics indicate major diseases in Bahrain include diabetes, respiratory infections, genetic diseases (sickle cell and thalassemia), and cardiovascular disease. Recent trends also reflect an increasing cancer rate, particularly breast cancer. Key considerations impacting diseases in Bahrain include: 1) over 60% of the population is classified as overweight, 2) about 20% of the population is diabetic, and 3) more than 20% of the population smokes regularly.
The public sector dominates the supply of healthcare services in Bahrain and accounts for most healthcare expenditures. The Oxford Business Group estimates Bahrain’s healthcare expenditures will record a compound annual growth rate (CAGR) of 5.1% to reach $2.4 billion in 2022, from an estimated $1.8 billion in 2017. Spending on inpatient and outpatient care is forecast to reach a CAGR of 5.3% up to 2022, while spending on medical goods and ancillary services is projected to rise at a CAGR of 3.2% over the same period. This growth estimate includes spending on medicine, medical material, overseas treatment (for eligible patients), and construction and maintenance projects at the country’s main hospitals and medical centers.
The Bahrain Economic Development Board (EDB) estimated Bahrain’s expenditures on health from the GCC Marshall Plan as of 2017 to be $252 million, about 3.4% of the fund’s total of$ 7.5 billion. The funding is used for the construction of new hospitals, clinics, and a genetic disease research center as well as upgrading medical appliances and providing other services.
Bahrain does not have a national healthcare plan. Citizens and expatriate residents have access to GOB hospitals and clinics by presenting a Bahraini national ID card. All Bahrainis receive free, state-funded health care, while requirements that all private companies offer expatriate workers healthcare coverage are being phased in. In 2015, the GOB implemented a compulsory health insurance fee requiring all employers who wish to renew work permits for expatriate employees to pay $191 for health insurance for one year or $383 for two years per employee. The move increased the private sector’s contribution to the Bahraini healthcare system. A $19 fee applies to expatriates visiting an emergency clinic in a GOB hospital.
Consistent with its fiscal deficit reduction goals, in 2018 the GOB passed a National Health Insurance Law to transform the health insurance structure in Bahrain. The move allows Bahrain to shift from offering free health care to all nationals and residents to a system of mandatory insurance, with full GOB-subsidized insurance for nationals and partially subsidized insurance to resident expatriates. Called “Sehati,” the GOB expects to launch this new national insurance plan for expatriates in late 2019, and for Bahraini nationals in 2020. Under the new law, the GOB will mandate employers of expatriates to pay for full health coverage for all their employees, while the GOB will pay for the BD 360 ($957) per year cost for each Bahraini national, which will cover treatment and medicine in GOB facilities. The plan also will provide for partially subsidized insurance packages for nationals opting for treatment in private hospitals.
According to MoH statistics, Bahrain has a network of seven publicly run hospitals and 22 private hospitals. In 2018, NHRA reported 716 health facilities, including 381 medical facilities, 124 dental clinics, 149 pharmacies, 127 optical stores, 15 laboratories, three radiology centers, and 12 alternative medicine centers. In 2018, NHRA accredited six hospitals and four medical facilities. It also issued 2,486 new licenses for medical professionals and renewed 6,480 existing ones. The largest healthcare facility in Bahrain is the Salmaniya Medical Complex, with approximately 1,200 beds.
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Main Competitors
The Bahraini market is dependent on imports for medical devices and pharmaceuticals. U.S. companies are present, but European and Asian suppliers are aggressively gaining market share due to their relative proximity to the market and competitive prices.
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Current Demand
According to GOB data, 2.872 million outpatients, in both government and private hospitals, and 129,650 inpatients accessed healthcare services in 2017. Bahrain is vying with its GCC neighbors to become a regional leader in medical tourism. The EDB estimates that in 2017, approximately 2% of patients came from outside Bahrain for healthcare services.
The healthcare market in Bahrain has been growing at an annual average rate of 12.2%, from an estimated $1.1 billion in 2015 to an estimated $2.0 billion in 2020. The demand for hospital beds was projected to grow at 2% or over 2,700 beds, annually, between 2015 and 2020. The growing market for medical equipment presents increased business opportunities for U.S. exporters. Employment in the sector has been unable to keep pace with expansion. The industry is growing by approximately 10% per annum, although healthcare-sector employment has been growing at around half this rate since 2009, according to the EDB. The ratio of doctors available to treat Bahrain’s population was 0.92 per 1000 people in 2016 according to the World Health Organization (WHO), compared to the Organization for Economic Co-operation and Development (OECD) average of 2.8 per 1000 people. The GOB issued Law 1/2019 in March 2019 amending Article 14 of the Private Health Establishments Law, giving priority to recruiting qualified Bahraini physicians, technicians, and nursing staff in private health establishments. According to the Oxford Business Group, only half of the nurses practicing in the Kingdom are Bahraini nationals. In accordance with GOB directives, the MoH is working to increase the percentage of Bahrainis employed in the sector to 80 percent by 2021.
The MoH will occasionally request international consultations in management restructuring, enhancing procedures and processes, and maintaining international standards to keep in line with the WHO standards.
Major health projects underway include:
- The King Abdullah Bin Abdulaziz Medical City, a one-billion USD public project consisting of a 300-bed hospital, four research centers, and a medical college affiliated with Arabian Gulf University. It is Bahrain’s largest health infrastructure project underway.
- An integrated medical complex in Saada that includes a maternity hospital, a sclerosis therapy center, and an elderly care center.
- The Diyar Al Muharraq Hospital is under construction as part of the new “Dilmunia Health District” in Muharraq.
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Registration Process
Investors can apply for commercial registration through the MOICT and track the status of their applications and approvals electronically through the Ministry’s Commercial Registration Portal https://www.sijilat.bh/.
Due to their flexible corporate structures, the most commonly used business vehicles in Bahrain are the Closed Joint Stock Company (CJSC) and the limited liability company (WLL), which is synonymous with an LLC.
Foreign companies can set up a branch, agency, or office without being subject to the same provisions as for the formation of companies. It is also possible to establish shelf companies, which can take any form and are valid for one year, during which time approvals and licenses must be obtained.
All documents needed for a company’s incorporation can be found on the MOICT website at https://www.moic.gov.bh/en/eServices/Pages/Sijilat-Commericial.aspx.
Foreign documents must be notarized and legalized, or notarized and apostilled. Companies offering financial services must also obtain a license from the Central Bank of Bahrain (CBB) which takes 60 days. Details may be obtained at CBB’s site: www.cbb.gov.bh. If all documents are in order, commercial registration by the MOICT will be completed in approximately one to two weeks.
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Barriers
Despite the entry into force of the FTA, Customs authorities occasionally attempt to collect duties on some items. There have been reports that goods which are not individually labeled “Made in the United States” do not receive the preferential treatment afforded under the FTA.
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Procurement & Tenders
The Bahrain Tender Board is a fully independent body, established by a Royal Decree on January 7, 2003, to set up a regulatory mechanism for government procurements.
Bahrain Tender Board
Arcapita Building - Bahrain Bay
Manama, Kingdom of Bahrain
Tel: (+973) 1756 6666
Fax: (+973) 1758 7855
Working Hours: 7:00 am - 2:00pm (Sun - Thu)
Website: www.tenderboard.gov.bh
While Bahrain maintains the basic framework for a transparent, rules-based government procurement system, U.S. companies sometimes have reported operating at a disadvantage compared with other international firms in certain government procurements. Contracts were not always decided solely based on price and technical merit, and on occasion, only selected, pre-qualified firms were invited to bid on major government tenders. U.S. firms also reported that corruption is sometimes an obstacle to foreign direct investment. Despite this, corruption is relatively rare in Bahrain, and giving or accepting a bribe is illegal.
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U.S. Commercial Service Contact Information
Name: Imane Alalaiwat
Position: Commercial Specialist
Email: AlalaiwatIA@state.gov
Phone: +973 17 242738
