Bahrain

Bahrain's total FDI stock reached USD 43.6 billion in 2024, with annual inflows rising modestly from USD 1.7 billion in 2023 to USD 1.8 billion in 2024, according to the Economist Intelligence Unit and the Bahrain Economic Development Board (EDB). The industrial sector captured the largest share of 2024 inflows, followed by information and communications technology (ICT), tourism, and financial services.

U.S. Department of State – 2025 Investment Climate Statement: Bahrain · 2026-02-23

The World Bank flagged that Bahrain's FDI is expected to face headwinds in 2026, citing reduced investor confidence and elevated insurance costs for commercial shipping as primary risk factors. Bahrain's high external financing needs in the medium term compound this vulnerability.

World Bank – Bahrain Macro Poverty Outlook · 2026-05-22

Bahrain's regulatory framework permits foreign nationals to hold 100% ownership in approximately 95% of licensed commercial activities, with no foreign exchange controls or restrictions on capital movements, maintaining a structurally open FDI posture. A limited set of activities retains a minimum 51% Bahraini ownership requirement, and all foreign investors remain subject to security screening by the Ministry of Interior (MOI).

ICLG – Foreign Direct Investment Regimes Report 2026: Bahrain · 2025-11-17

On 20 May 2026, the United Kingdom announced a landmark FTA with the six-member Gulf Cooperation Council (GCC)—comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—marking the first such agreement between the GCC and a G7 economy. The UK government estimated the deal will eliminate approximately £580 million in annual duties, with the UK's Department for Business and Trade (DBT) projecting a long-run GDP uplift of £3.7 billion per year.

CNBC · 2026-05-20

Bahrain's Minister of Industry and Commerce, Abdulla bin Adel Fakhro, characterized the UK-GCC FTA as a 'monumental achievement' and highlighted expected growth in collaboration across fintech, services, advanced manufacturing, and petrochemicals. He also noted that the GCC's unified and restrained response to regional conflict signals continued commitment to economic openness and accelerated growth.

CNBC · 2026-05-21

On 22 May 2026, senior Bahraini trade official Khalid Al Amin concluded high-level meetings in Bangkok with Thai government counterparts and business leaders, focusing on expanding market access, diversifying import sources, and reinforcing supply chain resilience amid global geopolitical and economic disruption. The engagement reflects Bahrain's stated strategy of broadening its trade network beyond traditional Gulf and Western partners to strengthen food security and investment diversification.

News of Bahrain / The Daily Tribune · 2026-05-22

Bahrain introduced a 15% Domestic Minimum Top-up Tax (DMTT) on multinational enterprises with global revenues exceeding USD 800 million on 1 January 2025, aligning with Pillar Two of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) framework. The 2025–2026 budget, approved in March 2025, further outlined plans to implement a broad corporate income tax, signaling a structural shift in Bahrain's historically low-tax fiscal posture.

U.S. Department of State – 2025 Investment Climate Statement: Bahrain · 2026-02-23

Regional geopolitical risk—specifically the ongoing U.S.-Iran conflict and Houthi attacks on commercial shipping in the Red Sea and Gulf of Aden—continues to elevate logistics costs and shipping insurance premiums for Bahrain-based operators. GCC ministers, including Bahrain's industry minister, have publicly emphasized the bloc's economic resilience and commitment to maintaining investor access, though the conflict's duration and escalation trajectory remain uncertain.

CNBC · 2026-05-21

Bahrain's trade openness remains high, with foreign trade accounting for approximately 158% of GDP; unwrought aluminium alloys constitute the leading national-origin export at BHD 1.059 billion (27% of export value in 2023), underscoring the economy's structural dependence on hydrocarbon refining and aluminium production. Export values of national-origin goods declined 21% in 2023 relative to 2022, reflecting commodity price normalization.

Lloyds Bank Trade – International Trade Portal: Bahrain · 2026-03-01

Bahrain's regulatory framework has seen recent tightening of economic substance requirements (ESR) and ultimate beneficial ownership (UBO) transparency obligations, both of which are being progressively strengthened and may affect future foreign investment structuring. Reforms have also expanded the grounds for personal liability of directors, shadow directors, managers, and shareholders, broadening fiduciary duties and increasing governance accountability.

ICLG – Foreign Direct Investment Regimes Report 2026: Bahrain · 2025-11-17

The Central Bank of Bahrain (CBB) operates a regulatory sandbox enabling local and international FinTech firms and digitally focused financial institutions to test innovative solutions in a supervised environment, with a pathway to full licensing upon successful product validation. This mechanism continues to position Bahrain as a regional FinTech hub and a preferred entry point for financial services market entrants.

U.S. Department of State – 2025 Investment Climate Statement: Bahrain · 2026-02-23

Foreign investors in regulated sectors—including banking, insurance, and telecommunications—are required to obtain prior approval from the relevant sectoral regulator (e.g., the CBB) for share transfers, in addition to standard Ministry of Industry and Commerce (MoIC) approval. All foreign investors are subject to security screening by the Ministry of Interior, and UBO disclosure to regulators is mandatory for shareholdings of 10% or more in a Bahraini company.

Legal 500 – Investing In: Bahrain 2026 · 2026-01-17