Bahrain: Is it a good location for tech companies?

The Kingdom is tech-savvy

Tech is one of the largest industries in the world. It is also everywhere in our lives, be it the workplace or the house.

Billionaires like Jeff Bezos and Trillion $ companies like Apple have been made through technology, with an unprecedented amount of wealth flowing in this vast, dynamic industry. Silicon Valley has become one of the most renowned places in the world on the back of these successful companies that set up there.

While much of the largest tech companies in the world does still originate out of the US and its major hubs like Silicon Valley, their influence is not limited to where they come from. Startups have begun to find success from other parts of the world as well, as technology penetration reaches unprecedented levels with each passing day.

India has become a burgeoning hub for tech companies, with its extraordinary population and a large number of graduates and engineers. China has also produced some highly successful companies, including the likes of Huawei.

But one region that has only just begun to realise its full potential in technology, especially when it comes to Information Technology, is the Middle East.

While the countries in the region have depended on oil, gas and trade for much of their wealth, there are now conscious efforts to diversify their economies. And with these efforts, comes the opportunity for a more mature economy. An economy, where companies that are involved in technology have the right environment to prosper.

And there are many factors that cause an environment to be the right kind to grow in. Factors such as strong internet penetration levels, existing supporting industries, conducive business environment, availability of talent and so on, are vital to a country and its economy becoming one suited to tech companies.

As the economies of countries from the middle east grow, investors, companies, professionals and entrepreneurs from around the world look for opportunities there. And as the number of jobs and opportunities in the tech sector continue to rise, the countries that offer the best environment for these businesses to conduct business in will benefit.

One of the more important options for tech companies and professionals in the GCC is the country of Bahrain. While the country itself is a small island nation that still sees much of its wealth come from oil and refineries, there are serious efforts to diversify. These efforts have made Bahrain an attractive proposition for tech investors and professionals who look toward MENA and the GCC.

What does Bahrain have to offer to the tech industry?

Whether you are an investor or a professional, it is key to understand what the country has to offer before making your decision. If you are looking to the GCC, it’s useful to know what Bahrain has to offer, especially considering there are other, seemingly more popular alternatives here, like the UAE.

Full Foreign ownership

While other countries in the region still require companies to enter into a partnership with local companies or individuals to set up there, Bahrain goes against the trend and offers full foreign ownership to investors and companies in the Information and Communication Technology Sector.

This makes the country a very attractive option, as it allows companies to maintain full control of their ventures. 

Ease of Doing Business

According to the World Bank Doing Business report for 2019, Bahrain is ranked 2nd in MENA for ease of doing business.

The country excels in important factors like starting a business, trading across borders and paying taxes. The country offers the significant advantage of a 0% corporate income tax, making it very attractive for businesses to set up there. 

Availability of Talent

Having a strong talent pool to choose from important for every industry. This is especially true for tech companies. As such, it is key that the country that you choose offers access to a strong pool of talent.

It will please you to know that Bahrain excels in this area, second only to the much larger country of UAE, in the ME. There is also the fact that the country is beloved by expatriates and has routinely done well in expatriate surveys and rankings. This presents companies in Bahrain with access to a diverse array of talent from all parts of the world, allowing for strong workforces to take them to their goals.

Infrastructure and Related Companies and Industries

For tech companies, especially ICT firms to prosper, strong infrastructure for data transfer and connectivity are required. Encouragingly, Bahrain has exactly that, with affordable internet with competitive conditions within the country and 4 submarine fibre optic systems.

Then there are the tech companies that are already present there, like the global cloud services behemoth AWS (Amazon Web Services) who opened its first data centres in the GCC, in Bahrain in 2019. Apart from AWS, there are also other international companies like Oracle and local firms like Awal that are also operating in Bahrain.

All of these clearly indicate a business environment that is conducive for tech companies to succeed. But knowing what the advantages are is only half the puzzle. The key to the success of tech companies in Bahrain will be in understanding how to use these strengths to their advantage. And that begins with how they approach the country and its many strengths.

How a tech company in Bahrain can take advantage from these strengths

The approach of any tech company that operates or intends to operate in Bahrain should be focused on using the strengths that the country has to offer to their best advantage. 

Full ownership of your company, as opposed to the alternative, allows you to exercise full control of all your business activities. Although, you may benefit from using the services of a company that is well versed in doing business in Bahrain. Then there is, of course, the availability of a diverse pool of talent. Tech companies can make use of by hiring highly skilled professionals who come from different parts of the world, including the Middle East, Europe, and South Asia, among others.

Companies can also find success by adapting their business models to serve the needs and/or work with the large ICT companies that are already present in Bahrain. Companies like AWS, Oracle and Awal that continue to grow, present an opportunity for you to make use of. 

But the most important way that companies can make use of the strengths that Bahrain offers to tech companies, is by using them to gain a competitive advantage. The Middle East and the GCC present a fast-growing market for IT companies to target. And using these country-specific advantages will allow a business to become more competitive among others who may be based in countries like the UAE.

For example, the living costs in Manama, Bahrain are 32% lower than that of Dubai, UAE. This also means the companies can have significant savings in the perks that they may offer to employees, like housing allowances. A company that operates with the costs in Bahrain, while serving the companies in higher-income economies like the UAE has an inherent financial and economic advantage. 

And this advantage is the biggest reason why you should consider setting up your IT business in Bahrain. Even if your customers come largely from one of the neighbouring countries like KSA, UAE or Kuwait, you can still base the activities out of Bahrain with no loss in access, due to the strong trade and cooperation agreements among GCC countries.

Bahrain presents a low-cost, higher than average return and highly accessible option to investors and businesses in the IT sector. An option that, should you choose to utilize it, is sure to help your business gain a significant competitive advantage in the high competition IT market of MENA.

What should your Bahrain business do next?

Whether you have already decided to set up or not, you will gain by having a local firm as a partner while you set up your business in Bahrain. We have been sponsoring and providing services such as consulting, trading and HR placement to businesses in and around Bahrain for over 3 decades. Contact us now, and take your first step to do business in Bahrain.