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Business Environment in Bahrain

Bahrain prides itself on being a premier investment location in the Middle East Region. Bahrain’s internationally acclaimed strong financial regulations, economic and political stability, strategic location and strong legal framework have transformed it into a high standard investment and commerce destination.

Free markets help businesses prosper. Bahrain is the 13th freest economy in the world, and the freest economy in the Middle East, ahead of Japan, Belgium, Austria, Germany, Sweden and Norway.

Bahrain’s economic freedom score is 76.3, making its economy the 13th freest in the 2010 Index. Its overall score is 1.5 points higher than last year, with improvements in trade freedom, investment freedom, labour freedom, and freedom from corruption. Bahrain is ranked 1st out of 17 countries in the Middle East/North Africa region, and its economic freedom score is well above the world average.

Overall economic growth has slowed, but the impact of the global financial crisis on banking has been relatively muted. There has been no severe liquidity contraction, and the financial sector’s resilience has helped to minimise any adverse effects on the economy. Bahrain has maintained monetary stability despite inflationary pressure.

Structural reforms and openness to global commerce have made Bahrain a financial hub and the regional leader in economic freedom. One of the region’s least oil-dependent economies, it has a competitive tax regime and a sophisticated financial sector that facilitates the flow of capital and foreign investment. The government has modernised the regulatory framework and continues to focus on diversifying the productive base. Despite more flexible employment regulations, unemployment remains a serious problem.

According to the index, there are 10 components that are measured from 0 (no freedom) to 100 (maximum freedom) to determine a nation’s economic freedom. The averages of these 10 components give an overall economic freedom score for each country. The 10 components of economic freedom are business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom.

Free markets, which allow businesses to operate without interference whilst benefiting from the protection of an established rule of law, are essential if businesses are to thrive. The success of liberal economies over the past 100 years has shown this to be the case.

Bahrain's free markets mean that businesses are allowed to operate freely with minimal red-tape and foreign ownership restrictions. Bahrain’s bilateral trade and economic agreements with 43 countries, including China, France, India, Singapore and the United Kingdom, mean that there is a huge market for Bahrain’s goods and services. Bahrain was also the first Gulf country to put into force a Free Trade Agreement with the United States.





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