The United States and Bahrain enjoy a long-standing strategic and commercial relationship dating back more than 100 years. In 2001, a formal trade framework was put in place to facilitate US-Bahrain trade and investment which was shortly followed by one of the most comprehensive FTAs in American history in 2006.
In the years since the FTA has been in place, US imports from Bahrain have increased 143%, while Bahrain was the United States’ 7th largest goods export market in 2019. US exports to Bahrain have continued to increase yearly and are currently up 301% since 2005. Today, as Bahrain diversifies away from hydrocarbons, new technologies such as cloud, FinTech, and IoT continue to provide opportunities for trade, investment, innovation and collaboration.
Bahrain’s economy generates approximately 80% of the country’s GDP via non-oil sectors. But more than that, The Kingdom of Bahrain has taken major steps to create a business environment friendly to the success of foreign investors. Bahrain does not collect corporate or income taxes. It allows unrestricted freedom in repatriating and transferring profits and capitals, as well as importing and exporting local and foreign currencies. It gives most foreign organisations total autonomy in following established business practices. Combine these advantages with stability, a highly-skilled, bilingual workforce, and various other government subsidies, and you have an area that’s perfect for US companies to thrive in.
And many American businesses are already reaping the rewards.
US Companies in Bahrain
American businesses from a range of industries have discovered growth and opportunity in Bahrain. Here we take a closer look at three major US companies in Bahrain, and how they found success.
American Express Bahrain has played a significant part in the growth of Bahrain’s financial industry since its Middle East operations began 44 years ago. American Express obtained its license for Bahrain in 1977 and has been offering the highest level of credit and financial services for its customers. To reach the entire consumer base in the region, American Express Bahrain employs a diverse workforce of over 500 employees, providing excellent customer service and creating hundreds of jobs in Bahrain.
Bahrain’s economic atmosphere provides American Express with the atmosphere to grow here in Bahrain, as well as reach the entire MENA region. The financial market in the region continues to expand, and Bahrain acts as a gateway to this growing market. By setting up in Bahrain, American Express gained access to key markets in a vitally important region. This foothold in the MENA region has helped increase revenue and put the company in an advantageous position for future growth.
As previously mentioned, Bahrain’s welcoming approach to foreign business has attracted organisations from a range of industries, and this includes education. Supported by the Mumtalakat portfolio, the American University of Bahrain (AUBH) opened its doors in 2019, and is the first comprehensive, co-educational, American-style university in the Kingdom of Bahrain purpose-built to embrace diversity and provide a comprehensive education for Bahraini and international students.
Bahrain is widely recognised as perhaps the most forward-thinking country in the Middle East, and is ranked within the top-ten best destinations globally for expats to work and live. These factors combine to create a landscape in which an American-style educational experience can thrive. The AUBH is currently seeing staggering new enrollment and stands to become one of the most successful higher-education institutions in the region. With this American school, Bahrain is establishing itself as a world-class educational option.
The US-Bahrain Free Trade Agreement of 2006 marked an important milestone for both countries. Since that time, WestPoint Home (an American home textile company) has invested more than USD 160 million in Bahrain. Westpoint Home’s most recent economic investment in Bahrain was the construction of a USD 9 million expanded yarn-spinning plant. But in addition to investing in Bahrain’s economy and creating hundreds of jobs, WestPoint Home has enjoyed significant growth.
In Q1 of 2020, when many businesses were suffering extreme losses as a result of the COVID pandemic, WestPoint Home’s parent company reported that sales for the home textiles manufacturer jumped 28% to USD 50 million. This is thanks, in part to Bahrain’s liberal policies regarding foreign business. For example, Bahrain’s tariff preference level allows textile manufacturers in Bahrain to import certain support materials, such as yarn, and export finished goods into the US duty free. By reducing operational costs and allowing foreign businesses to retain operational freedom, the Kingdom of Bahrain helps American companies experience substantial growth.
Oil may still be a major economic commodity coming out of the Middle East, but it’s certainly not the only one worth considering. In fact, in 2019, U.S. goods and services trade with Bahrain totaled an estimated USD 4.0 billion (exports were USD 2.1 billion; imports were USD 1.8 billion), and the U.S. goods and services trade surplus with Bahrain was USD 297 million.
Simply put, Bahrain is an exciting opportunity for American companies. The US-Bahrain Free Trade Agreement generates export opportunities for the United States, enhances commercial relations between the two nations, and supports Bahrain’s economic and political reforms. Add to this an educated workforce, low labour costs, and extremely amicable taxes and tariffs, and it’s clear that the future of US business may be in Bahrain.
Interested in seeing what Bahrain has to offer? Learn more about setting up a business in Bahrain, and experience these advantages for yourself.