How one decision can save $1 million – Bahrain’s cost of doing business


One of the most important questions a financial services firm needs to ask in selecting a location is: what are the annual costs of operations? In Bahrain, these costs are significantly lower compared with Dubai and Abu Dhabi.  According to a recently published KPMG report, Bahrain enjoys a cost advantage in the financial services sector of up to 35% over both Dubai and Abu Dhabi.

In absolute numbers, this means that financial services firms which choose Bahrain can save up to $1 million a year compared to establishing in Dubai or Abu Dhabi. For an established firm, this cost reduction is a welcome profitability boost. For startups such as those in the FinTech space, it means they can focus on what matters most: innovation and growth.

One of the largest cost factors is commercial rent, which is significantly lower in Bahrain. This is driven in partly by the fact that Bahrain doesn’t have free zones – the whole country is a free zone and there are no restrictions as to where companies can be based. As financial companies can set up operations in commercial areas anywhere in the Kingdom with the same regulatory benefits, they don’t need to compete for office space in small, concentrated locations as they do in neighbouring countries.

The largest operating cost, however, is of course manpower, and in Bahrain the average salary is 60 per cent lower. This is primarily due to the Bahrain’s supportive visa policy, which makes it simple and affordable to bring in specialists from around the world. Additionally, the Kingdom’s highly skilled local workforce minimises the cost of labour.

Beyond business costs, living expenses matter too. Here again Bahrain compares favourably as an affordable country whose residential rental, utilities, cost of education and cost of domestic help are all considerably lower. As an example, the rental rate of a three-bedroom villa is almost half that of elsewhere in the region. Costs of education are also lower by 10–50 per cent, too. We aspire to be the most business-friendly economy in the Gulf and that is a challenge we work hard to live up to.

Similarly, Bahrain continues to thrive because of its robust private sector. Private enterprises are the main driver of economic growth, employing 65% of Bahrainis. Our future prosperity depends on continuing to attract investment and to support people from Bahrain, the wider region and beyond to start and grow innovative, competitive businesses. Business-friendly Bahrain is an aspiration that we challenge ourselves to live up to as we know we need to be the most business-friendly economy in the Gulf.

For a launch pad to the GCC market with competitive operational and living costs, look no further than Bahrain. Find out more by downloading the latest KPMG report on the ‘Cost of doing business in Bahrain – Financial services’.

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