Published on and written by Cyril Jarnias
The Kingdom of Bahrain, a small archipelago in the Persian Gulf, has established itself in recent years as a premier destination for entrepreneurs worldwide. With its business-friendly policies, dynamic ecosystem, and numerous advantages, Bahrain offers fertile ground for creating and developing innovative startups. Let’s explore the reasons that make this country a true promised land for new ventures and discover how to launch your own business there.
A Thriving Ecosystem for Startups
Bahrain has positioned itself as an innovation hub in the Middle East, attracting more and more entrepreneurs and investors. This appeal is based on several key factors:
A Transforming Economy: The Bahraini government has launched an ambitious economic diversification strategy aimed at reducing its dependence on oil. This Vision 2030 emphasizes innovation and entrepreneurship, creating an environment conducive to the emergence of startups in various sectors such as financial technology (fintech), artificial intelligence, and renewable energy.
State-of-the-Art Infrastructure: Bahrain boasts modern infrastructure and world-class connectivity. The country benefits from extensive 5G coverage and high-performance data centers, essential for tech startups.
A Favorable Regulatory Framework: The kingdom has implemented flexible and business-friendly regulations. For example, the regulatory sandbox for fintechs allows startups to experiment with new products and services in a controlled environment without being subject to all the usual regulatory constraints.
A Skilled and Cosmopolitan Workforce: Bahrain has a young and educated population with a high rate of bilingualism (Arabic-English). Additionally, the country attracts many international talents thanks to its quality of life and professional opportunities.
A Strategic Location: Situated at the heart of the Gulf, Bahrain offers privileged access to Middle Eastern and North African markets, representing a potential of over 400 million consumers.
Good to Know:
According to a recent Startup Genome report, Bahrain ranks among the most promising startup ecosystems globally, with an annual growth rate of 46% in the number of new businesses created.
Ideal Legal Structures for Your Startup in Bahrain
When it comes to creating a startup in Bahrain, several legal options are available to entrepreneurs. Here are the main structures suitable for new ventures:
Limited Liability Company (LLC): This is the most popular legal form for startups in Bahrain. It offers great flexibility and limits partners’ liability to their contributions. The LLC can be 100% owned by foreigners in most business sectors.
Closed Joint Stock Company: This structure is suitable for startups planning to raise significant funds from investors. It allows greater flexibility in capital management and facilitates the entry of new shareholders.
Sole Establishment: For entrepreneurs wishing to start alone, this legal form is simple to set up. However, it does not separate personal and professional assets.
Branch of a Foreign Company: Startups already established abroad can opt to open a branch in Bahrain, allowing them to benefit from the country’s advantages while remaining connected to their parent company.
Free Zone Company: Bahrain has several free zones, such as the Bahrain International Investment Park, offering additional tax and regulatory benefits to businesses that set up there.
It is important to note that the business creation process in Bahrain is relatively simple and fast. The government has established a one-stop shop, the “Bahrain Investors Center,” which centralizes all administrative procedures and allows for business creation in just a few days.
Good to Know:
Bahrain allows 100% foreign ownership in most business sectors, making it one of the most open countries in the region for international entrepreneurs.
Funding Your Startup: Options Available to You
Funding is often the lifeblood for startups. Fortunately, Bahrain offers a diverse and rapidly expanding funding ecosystem. Here are the main funding sources available to entrepreneurs:
Government Funds: The Bahraini government has implemented several initiatives to support startups. For example, the Tamkeen fund offers grants and preferential-rate loans to innovative young companies. Recently, Tamkeen launched the “Bahrain Skills and Gender Parity Accelerator,” a program aimed at developing skills and promoting gender equality in entrepreneurship.
Accelerators and Incubators: Bahrain has several acceleration and incubation programs that offer not only support but also initial funding. Examples include Flat6Labs Bahrain or Brinc MENA, which provide intensive programs and venture capital investments.
Angel Investors: The angel investor network in Bahrain is growing rapidly. Platforms like Tenmou connect startups with individual investors willing to provide funds and their expertise.
Venture Capital: More and more venture capital funds are showing interest in the Bahraini ecosystem. Local players like Middle East Venture Partners (MEVP) or Al Waha Fund of Funds are actively investing in regional startups.
Crowdfunding: Bahrain was one of the first Gulf countries to regulate crowdfunding, opening new funding possibilities for startups. Platforms like Beehive allow entrepreneurs to raise funds from the general public.
Banks and Financial Institutions: Although traditionally more hesitant to fund startups, some Bahraini banks have developed specific programs for innovative young companies.
Strategic Partnerships: Many large companies in Bahrain seek to collaborate with innovative startups, sometimes offering funding in exchange for equity or access to developed technology.
It is important to note that Bahrain’s Economic Development Board (EDB) plays a crucial role in attracting investments. In 2024, the EDB successfully attracted over $380 million in investment commitments, demonstrating the country’s growing appeal to international investors.
Good to Know:
Bahrain has established a favorable regulatory framework for crowdfunding and cryptocurrencies, opening new funding prospects for fintech startups.
Conclusion: Bahrain, a Launchpad for Your Startup
Bahrain has established itself as a premier destination for entrepreneurs worldwide. With its dynamic ecosystem, favorable regulatory framework, and numerous funding options, the kingdom offers fertile ground for the development of innovative startups.
The country’s Vision 2030, focused on innovation and economic diversification, promises a bright future for new ventures that choose to establish themselves there. Additionally, Bahrain’s strategic position makes it an ideal gateway to Middle Eastern and North African markets.
Whether you are a local or international entrepreneur, Bahrain provides all the necessary ingredients to transform your innovative idea into a thriving business. With government support, facilitated access to funding, and a world-class business environment, your startup has every chance to prosper in this small kingdom with big ambitions.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
