Bahrain Seeks to Attract Foreign Investment Amid Economic Recovery Plan
The Kingdom of Bahrain is taking proactive steps to enhance its business environment and attract foreign direct investment (FDI) as part of its economic recovery plan. According to the US Department of State’s Investment Climate Statement, Bahrain aims to promote a greater role for the private sector in driving economic growth.
Improving Business Climate and Attracting FDI
Bahrain has implemented various initiatives to encourage FDI, including:
- Streamlining commercial procedures: Efforts have been made to simplify and speed up business registration processes.
- Launching major strategic projects: The government has announced plans for significant investments in key sectors such as manufacturing, logistics, and tourism.
- Developing key sectors: Focus has been placed on developing the manufacturing, logistics, and tourism industries.
Economic Recovery Plan
In November 2021, the government announced a new economic recovery plan with five pillars:
- Creating quality jobs: Aiming to provide employment opportunities for Bahraini citizens.
- Attracting $2.5 billion in yearly FDI by 2025: Targeting increased foreign investment to drive economic growth.
- Launching $30 billion in major strategic projects: Investing in key sectors such as manufacturing, logistics, and tourism.
- Achieving fiscal sustainability: Ensuring the government’s financial stability and sustainability.
Sustainable Energy and Environment
Bahrain’s Vision 2030 outlines measures to protect the natural environment and promote sustainable energy, including:
- National energy efficiency target of 6% by 2025: Reducing energy consumption to minimize waste.
- Renewable energy target of 10% by 2035: Increasing the use of renewable energy sources.
Support for Start-Ups
The government has established several funds to encourage start-up investments and launched Bahrain FinTech Bay in 2018 to promote innovation and entrepreneurship.
US-Bahrain Bilateral Investment Treaty (BIT)
The US-Bahrain BIT entered into force in 2001, providing most-favored nation treatment and national treatment for U.S. investors.
Challenges and Opportunities
While some U.S. companies have reported operating at a disadvantage compared to other firms due to local commercial registration requirements and pre-qualification prior to bidding on tenders, the government has taken steps to address these issues, including breaking ground on the United States Trade Zone (USTZ) in February 2022.
Conclusion
Despite challenges, Bahrain remains an attractive destination for foreign investors, with a total FDI stock of $30.683 billion and a growing startup ecosystem. The government’s commitment to improving the business climate and attracting investment will continue to drive economic growth and development in the Kingdom.