Time to Broaden the Entrepreneurial Horizons?

Looking to broaden the entrepreneurial horizons in 2013? The island kingdom of Bahrain might not readily spring to mind as a potential location for a business startup. But maybe it should given how much happens in this small but important Persian Gulf state. Hundreds of American companies are already represented there, indicating the business-friendly nature of the country’s regulatory environment.


A free trade agreement provides the cornerstone of bilateral trade between the US and Bahrain, with the flow of imports and exports growing year-on-year since it was signed in 2006. A strong, modern finance sector has also helped to underpin growth, too, through innovative product offerings including business banking and other vital services.


Last year, the American conservative think tank, the Heritage Foundation, which is based in Washington D.C., listed Bahrain as the world’s 12th freest economy, the highest ranking of any country in the region. And the World Bank’s “Doing Business 2012” report ranked Bahrain 38 out of 183 countries in the world for ease of doing business in terms of foreign investment.


As a result, Bahrain’s economic growth has increased steadily over the years, rising by around 4-5% annually. But with unrest in the country in 2011, a direct consequence of the Arab Spring, growth dropped dramatically to around 1.5%. But the temporary blip in the figure was expected to have reversed itself during 2012.


Although oil and gas production will remain the backbone of Bahrain’s economy for years to come, the non-petroleum sector of the economy is making great strides, says the US government.


Growth areas include finance, high value manufacturing and industrial services, information technology, health care and medical equipment, education and training, construction and engineering, ports, professional services, renewable energy construction, and tourism.


The US government says, “The government of Bahrain has substantially liberalized Bahrain’s economy and deepened commercial ties with the United States. Bahrain permits 100 percent foreign-ownership of a business or branch office, without the need for a local partner. Bahrain has no tax on corporate income, personal income, wealth or capital gains, withholding,  death/inheritance. There is no restriction on repatriation of capital, profits or dividends.”


Any US company interested in setting up in Bahrain is urged to contact the commercial section of the US embassy for additional details and guidance.


If you’re wondering by now whether Bahrain is not some kind of Shangri-La, the country does have its fair share of problems. One of the most pressing is the lack of affordable housing for its citizens.


However, the Bahrain government is considering various ways of cooperating with the private sector to help overcome the residential accommodation shortage.


That could mean private construction firms taking on social housing projects from start to finish and then handing completed houses back to the government. The government would then allocate them  to families on the housing waiting list.


A report by global publishing, research and consultancy firm Oxford Business Group (OBG), says if the private sector is able to win a greater share of state contracts for affordable housing, this will go a long way to restore the fortunes of the industry, which has seen business trail off in the wake of the global financial crisis.


The OBG adds, “Though not as glamorous as skyscrapers or high-end residential complexes, the affordable housing market is one that offers good returns on large-scale projects.”


Go here to read the full OBG report.

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