• Share:

How Economic Growth Impacts Businesses in Bahrain in 2021

Officially termed The Kingdom of Bahrain, the nation is a tiny country in the Persian Gulf. The Dilmun civilization backs an archipelago of 50 natural islands.

Situated on the Eastern Coast of Saudi Arabia and to the north of Qatar, Bahrain has a strategic placement in the Middle-East zone, fuelling the economy with a synergy of trade and commerce that attracts the international business minds.

The word "Bahrain" refers to two seas, which has become a significant stop-point for foreign merchants.

One of the first calls that every investor needs to make before starting a business in Bahrain is to get an overall idea regarding the economy, which helps to strategize things at ease.

If you are looking for a business set up in Bahrain, then this guide is for you!

The Economic Growth of Bahrain

The Kingdom of Bahrain dwells on the oil sector, stands as a significant player in the GCC market and beyond. Over the years, the Bahraini government has been taking respective measures to strengthen the non-oil segment to increase FDI flow.

As a commercial crossroad, Bahrain has been making strides towards becoming a digitally sound economy and building one of the largest FinTech hubs.

The country holds strong market connections with the neighbouring countries that drive a massive inflow of trade, capital, information and people.

A few of the recent economic shifts in Bahrain include:

  • In 2019, the non-oil sector saw a growth spurt of 1.9%
  • In 2018, the economy of Bahrain had advanced 4.6% YoY
  • In 2017, there was a significant decrease in the unemployment rate
  • In 2016, the export segment saw a potential growth of USD 12.2 Billion

To provide dedicated business areas, the Bahraini government have also established free zones in Bahrain for the investors to step in and proceed ahead at an economical cost.

Pre and Post COVID Scenario

It is a well-known fact that the pandemic has turned out to be a severe nightmare for the business industries on the global front, and  Bahrain, too, has been impacted significantly.

However, the government has been taking numerous steps to revive the economy and can be understood much better through the following numbers:

Bahrain's Economic Outlook In Numbers (Pre and Post COVID)





Real Growth GDP in %




Non-hydrocarbon sector




Hydrocarbons sector




Nominal GDP Growth




Inflation (CPI)




Current Account (% of GDP)









From the above figures, it is visible that the economy has been uplifting itself, thus paving out opportunities for business investors.

Starting a business in Bahrain today has become an easy process, provided specific rules are to be kept in mind. For instance, here's a guide on Bahrain Trade Name Rules that one must go through before incorporating a business entity in the region.

Opportunities for Bahrain Business Setup

Bahrain has been an emerging ground for various business industries. Other than the petrochemical industry, the following business industries are currently in focus:

1.Information Technology

The technology industry has boomed significantly during and post-pandemic. One of the driving factors that has kept the industry growth is the flexibility to conduct the activities remotely. Therefore, any business investor or IT professional who wants to open a business in Bahrain has the complete freedom and flexibility to start an IT business in Bahrain.

2.Digital Agency

In sync with the IT industry, digital marketing has constantly been growing to meet the digital needs of business entities. Moreover, since the pandemic, most of the offline businesses have understood and accepted the online presence. Thus, the demand for digital marketing agencies has been spiking up to meet the requirements at ease.

Bahrain has an open ground to digital marketing entities. So if you hold a digital mindset and is looking forward o start your digital marketing business in the international region, you can give it a thought.


Today, finance businesses have taken the next step to blend themselves with technology, and thus, the fintech industry comes into the picture.

The Kingdom of Bahrain stands at the edge of creating the leading Fintech Hubs in the MENA (Middle East and Africa) region.

Globally, almost 80% of the financial institutions are looking forward to transforming themselves as a FinTech platform. So if you, too, hold a dedicated

4.Food Processing

Processed foods get consumed to a great extent in Middle Eastern countries. Bahrain is a massive market for the Food and Beverage Industry, and thus, there is enormous scope for business investors to step forward and invest in the food processing business.

5.Cloud Kitchen

The concept of cloud kitchen has been one of the growing startups globally. The feasibility of ordering one's favourite food in one- click has turned out to be a trending move for the hospitality industry. It is known that the restaurant business has been widely affected by the pandemic, and thus, cloud kitchen became the ultimate solution.

A chef who dreams of starting an online kitchen or an investor who holds a dream of starting an online kitchen business can proceed with the same provided the documentation gets completed according to the authorities' requirements.


The doors of Bahrain are not only limited to large business entities or multi-national corporations. The government of Bahrain has widened the opportunities for the small and medium-sized industries find a way to make their stand in the ground.

Different initiatives like Bahrain Economic Vision 2030 and Substantial Goal Program turns out to be an excellent platform for the small and medium industries to grow.

Bahrain Business Incubator Centre (BBIC)

Bahrain is a friendly zone for startups, and doing business in the region is feasible for business investors. Thus, the government has taken respective measures to support entrepreneurial minds to boost their business ideas and develop the nation.

Bahrain Business Incubator Centre (BBIC) is the ultimate ground developed to uplift the entrepreneurial mindset in Bahrain by assisting them with complete corporate solutions.

One of the driving modes is to promote the entrepreneurial culture in Bahrain and enhance the socio-economic culture at ease.

VAT Scenario in Bahrain

Being a part of the GCC nation, Bahrain has also implemented the VAT levied on the business entities at 5%. The implementation took place on 1st Jan 2019 and became the third nation after the United Arab Emirates (UAE) and Saudi Arabia (KSA).

One of the core reasons for implementing VAT is that it paves out a new route for revenue generation.

To know more, here's a guide on VAT in Bahrain that will help you to get a clear idea of the same.

Future Initiatives by the Bahraini Government

Talking about the future moves, the Bahraini government gets inclined towards the following:

1.Bahraini Economic Vision 2030

    Launched in the year 2008, it is one of the economic visions for Bahrain, providing a definite direction to the business development and pave out numerous ways for the nation to build up.

    Dedicated to shaping the government, society and the economy based on three grounds: Sustainability,Fairness and Competitiveness

2.Substantial Development Goals (SDG)

    The Bahraini government has taken a call to merge the SDG with the Bahraini Economic Vision 2030 to uplift the nation and set a benchmark for further development and progress.

Thus, you have got a complete idea of the overall economic condition of Bahrain, which will turn out to be effective if you want to start a business in Bahrain.

It is advised to proceed ahead under the guidance of an expert who can assist you in completing the legal proceedings at ease.

Business Setup Worldwide is one of the top ten business consulting firms in Dubai that has been guiding numerous business minds to set up their business globally in a hassle-free way.

Our business advisors are well-versed with the complete proceedings and can assist you by providing customized solutions.

If you hold the idea of setting up a business in Bahrain, take the first call with our experts.

Contact us today-we'd be glad to assist!