The Kingdom of Bahrain operates as a distinct, and influential political and economic entity within the Persian Gulf. But despite Bahrain’s autonomy, the island nation still maintains thriving diplomatic relations with the European Union and other non-EU countries in Europe. This is well evidenced by the number of formal agreements that Bahrain has entered into with this region.
In 1988, Bahrain, the rest of the Gulf Cooperation Council (GCC) and the European Economic Community (ECC) signed an agreement of cooperation, improving trade relations and expanding economic partnership in a number of industries. Then, in 2009, GCC member states signed a free trade agreement with the European Free Trade Association (EFTA), establishing the liberalisation of goods and services and enhancing mutual investment opportunities.
Today, the Kingdom of Bahrain is an exemplar of forward-thinking economics and investor-friendly policies. With one of the highest FDI stock-to-GDP ratios in the region, low operating costs, a diversified economy, and a number of laws and policies in place to help ensure the protection and autonomy of foreign businesses, Bahrain has become one of the most lucrative locations for European companies to establish themselves.
European Companies in Bahrain
Thanks to the many advantages Bahrain offers its foreign investors, the Kingdom has become something of a home away from home for many European organisations. Here, we look at three European companies in Bahrain, and how Bahrain is helping them excel.
One of the world’s leading logistics companies, DHL has long been associated with Bahrain, beginning in 1974 with simple postal parcel services. In 1993, DHL invested USD 60 million into a regional distribution center in Bahrain, and in 2008, the company finalised plans to move two of its main aviation centers from Africa and Europe into the Kingdom of Bahrain. The DHL regional distribution centre in Bahrain allowed the organisation’s consolidated revenue to climb 5.4% and reach nearly USD 37 billion.
The secret to DHL’s success in Bahrain is really no secret at all; Bahrain is a geographical and economic gateway into the Arabian Gulf region, and from there, into the rest of the Middle East. The Kingdom has granted them access to 220 markets and become a vital link in the company’s global supply chain.The long-standing political stability of the country helps prevent disruptions of service, and a friendly, liberal business environment ensures that DHL has the support it needs to thrive in the region.
Organisations within the global financial services industry have certainly found their place within the Kingdom of Bahrain. One such business is HSBC. Serving more than 40 million clients around the globe, HSBC is one of the world’s foremost banking and financial-services providers.
During their long history together, HSBC and the Kingdom of Bahrain have developed strong ties. But HSBC’s investment in Bahrain isn’t built solely on past successes; HSBC economists have predicted that Bahrain and other GCC economies will grow 3.9% year-on-year through 2021. By continuing and growing operations in Bahrain, HSBC stands to see increased success in the years to come.
Standard Chartered Bank is another European company in Bahrain that has enjoyed a long and fruitful relationship. After the first attempt to establish a branch in Bahrain back in 1900, Bahrain became a financial epicentre to the entire region. In 1920, Standard Chartered Bank became the first bank in Bahrain, and after a century of operation, it now boasts the most extensive branch network of any international bank in the Kingdom.
Today, with over 10,000 employees, Standard Chartered Bank Bahrain generates over USD 2 billion in sales. Once again, Bahrain’s uniquely supportive laws governing foreign businesses have helped create an environment in which a financial institution can enjoy immense success. At the same time, Bahrain’s focus on fintech provides Standard Chartered another rare opportunity — a strategic partnership with Bahrain Fintech Bay. Discussing the partnership, Abdulla Bukhowa, CEO of Standard Chartered Bahrain, explains “This partnership provides another platform for the bank to share global expertise and innovative financial solutions that suit a steadily growing digital business market, led by a diverse population.”
Europe and Bahrain have long been economic allies; it’s no surprise that European companies in Bahrain would enjoy a number of benefits and advantages: 0% corporate taxes, 100% foreign ownership in most business sectors, no free-zone restrictions, and a highly skilled bilingual workforce. Add to this Bahrain’s geographical location providing newcomers access to the USD 1.5 trillion GCC market, and the advantages become even clearer. Bahrain exported approximately USD 55 million to the European Union, just in August of 2020, and there’s certainly more where that came from.
Simply put, the Kingdom of Bahrain represents a clear and lucrative opportunity for European businesses. The aforementioned trade agreements help protect foreign investors, eliminate barriers, and guarantee essential support for those European organisations who decide to make Bahrain their home.
Interested in seeing what Bahrain has to offer? Learn more about setting up a business in Bahrain, and experience these advantages for yourself.
