Business infrastructure

In the early 1960s, Bahrain began to diversify its industry from simple oil production into petroleum refining, petrochemicals, aluminium and downstream industries, manufacturing, ship repair, and services -- industrial, financial and business. The aim was twofold: to accelerate economic growth and to provide employment for Bahrainis.

To encourage private sector investment, the government has instituted an unprecedented series of industrial development and employment initiatives. These initiatives have been further strengthened and enhanced by legislation allowing 100% foreign ownership to onshore companies and a more equitable agency law. The government has also maintained its commitment to zero taxes on corporate and personal income.

No world-class multinational company would consider a major investment anywhere unless the infrastructure were in place. And in Bahrain, besides easy access to an enormous regional market through an excellent road system and a causeway linking Bahrain with eastern Saudi Arabia, the island state has become the international financial services capital of the Middle East.

Most major Arab financial institutions have offices in Bahrain as do many international banks, branches of foreign insurance companies and exempt companies trading offshore. The country is also an international and regional wholesale inter-bank money market centred on its offshore banking sector which was first established in 1975 with assets of US$ 70 billion.

A firm but flexible regulatory environment is directed by the Bahrain Monetary Agency. The Bahraini dinar is a freely convertible and stable currency, firmly linked to the US dollar.

This environment has seen the development of a successful stock exchange. The gross volume of shares increased from 62 million in 1989 to nearly 400 million in 1993.

Servicing the financial and business sectors is a digital telecommunication system as advanced as any in the world. Services include exclusive private channels, access to international data bases and the internet plus specially developed communication systems for bank treasury operations.