Bahrain is introducing a new ‘golden licence’ that grants incentives and streamlines services for investors that back projects with a minimum value of $50m or create more than 500 local jobs.

Full details of the programme, which was approved by the government on April 3, are yet to be released. However, the country’s Economic Development Board (EDB) notes that it offers priority allocation of land, streamlined business licensing and building permit approvals, and support from the Bahrain Development Bank and labour fund, Tamkeen, which is upskilling the local workforce. 

Advertisement

“It’s too early to comment on the expected success of this scheme [but] the benefits appear to be quite far reaching,” Murtaza Khan, Middle East and Africa managing partner of consulting firm Fragomen, tells fDi

The golden licences, which will be available to both local and foreign firms, will also permit the review of laws and regulations to assist investors where “necessary and applicable,” according to the EDB. “This is quite a significant and … bold step towards enabling those investors to be successful,” says Mr Khan.

He also tells fDi that from the consulting firm’s “discussions with the authorities and reviewing the announcements, the benefits include streamlining of visa issuance” for foreign employees. With foreigners accounting for half the country’s population of 1.4 million, the licence is yet another tool in the government’s efforts to attract and retain talent. 

In February 2022, Bahrain launched a new golden visa programme that grants investors, property-owners, entrepreneurs and highly-skilled workers the right to live and work in the country for 10 years. 

Novel concept

By supporting large investments through a package of incentives under a golden licence, Mr Khan notes that Bahrain is taking a different approach to what other countries offer via special economic zones and industry-specific programmes. These are location-based or sector-based, while Bahrain’s new golden licence applies to any major projects that meets the criteria across sectors and locations. 

Advertisement

The new programme comes as one of the country’s most important foreign direct investment (FDI) incentives — zero corporate income tax for non-hydrocarbon activities — is under threat from the global 15% minimum tax rate agreed by Bahrain and 139 other countries in 2021. 

The small Gulf state, which was the Middle East’s finance hub before being overtaken by Dubai in the early 2000s, is heavily dependent on foreign investment. It placed 11th in fDi’s latest ranking of countries’ FDI performance relative to the size of their economy, and in the Middle East was second only to the UAE.  

Statistics tracked by fDi Markets suggest the number of inbound FDI projects has steadily declined since the beginning of the global financial crisis in 2008. Last year the country registered 24 investments, down from a three-year average of 43 investments a decade earlier. However, when measured by capital expenditure, 2022 was Bahrain’s second-best year for FDI over the past decade. It mobilised $2.2bn worth of FDI, boosted by big clean-power projects from the likes of the UAE’s Yellow Door Energy. 

According to the EDB, the golden licence programme aims to boost local investment and job creation in line with the government’s Economic Recovery Plan, which was introduced in 2021.