The Kingdom is the right place to start a business
There are several different countries in the middle east. There are even more of them in the culturally similar regions of North Africa. And together, they present a lucrative market that, including the GCC market that on its own, is worth over $1.5 Trillion.
And most of these economies are on a path of continuous growth as well, with countries like the UAE which has grown every year since 2009, a year in which a global economic crisis happened.
And these countries have no intentions of being static either. While many of the countries in the region did gain much of their wealth from natural resources like oil, they are now actively trying to diversify their sources of wealth.
UAE is already performing well in this regard, and the others are taking note and taking action. Saudi Arabia and Bahrain both have comprehensive plans to diversify their economies by the year 2030, with different priorities.
This intention to strengthen and grow is a common theme among countries in the region, and in the coming years, likely, the economies and markets of the Middle East and North Africa will present a highly diversified and competitive space.
Add to this the growing young population of these countries, and we get massive opportunities for businesses from around the world to capitalize on.
Doing Business in MENA
Most of the countries in the region tend to enjoy strong relations with each other, politically and more importantly for us, economically.
The GCC is a prime example, with strong trade relations being maintained among its member states of Saudi Arabia, UAE, Bahrain, Kuwait, Oman and Qatar. Entering any one of these countries, in effect, gives your business almost unlimited access to all the others, with some exceptions of course.
For businesses engaged in trading or services that do not necessarily require a permanent physical presence in all its markets, choosing any one country among them is the right way to move forward.
All of these countries offer their own set of unique benefits. The UAE is perhaps the most well-known option, with the city and ports of Dubai making it a hub for trade in the region. But its attractiveness is hindered somewhat by the high costs of setting up a business in the country, along with the high cost of living.
There is also the problem of it being a more established market, with strong competition in most industries. Choosing an emerging alternative like Saudi Arabia brings with it a different set of benefits. It gives your business direct access to one of the largest markets in the entirety of MENA. But there are other limitations to this, like the country’s infrastructure and facilities for international trade being a bit lacking.
Likewise, each country in the region brings with it a unique set of benefits and challenges to setting up a business there.
Among these countries, the one that has had the most success in attracting international investment has been the United Arab Emirates. It attracted the highest amount of FDI into the country in the year 2019, and almost three times as much as that of KSA.
Clearly, the country is doing many things right. And for any other country that wishes to attract foreign investment, it presents a successful blueprint to try and emulate.
The strongest barrier to entering the UAE is the high costs. The country has some of the highest costs of setting up a business in the region. And there is also the case of a very high cost of living in most of its major cities like Dubai and Abu Dhabi.
The question then becomes this: which country in the middle east offers similar benefits as the UAE without the high costs? And the answer?
Bahrain.
Bahrain as your point of entry to business in MENA
Bahrain has always found much success in attracting expatriates from around the world, with it being a favourite among expatriates for several years.
It offers many of the benefits that entering the UAE avails. It has a strong infrastructure for international trade, with its several ports making it a strong place to conduct the maritime movement of goods.
There is also a strong infrastructure for air travel, including the new terminal at its international airport that significantly raises its capacity to serve travellers. This goes alongside its connection to its neighbouring major economy of Saudi Arabia, with the King Fahad Causeway linking and strengthening trade relations between the two countries since its inception.
All of these factors, together, make it the 2nd strongest country in MENA for market connectedness.
Bahrain is ideally located for your international travels as well, with important cities such as Jeddah (2.5 hours), Cairo (3 hours) as well as others from outside the region such as New Delhi (3.5 hours) and Mumbai (4 hours) being very close through the air. Not to mention, the cities in its closest neighbours such as the UAE and Oman are even closer, with most of them less than one hour away via flight.
But what makes Bahrain a truly attractive option is its unusually low costs. Most of the cities and countries in the region that are as developed as Bahrain are also significantly more expensive.
For example, Bahrain’s major cities like Manama offer significantly lower living costs to their residents compared to the likes of Dubai. And this, if used well, can be a source of competitive advantage for your business.
The lower costs of doing business in Bahrain, including rent and wages, means you have a strong advantage in the costs of doing business. This can be extremely valuable in the increasingly competitive markets of the UAE.
And there is also the fact that the lower costs here reduce the required influx of capital as well. If you are not a large business with success in several different markets before entering MENA, chances are, you will find the costs in the UAE to be prohibitive.
With its lower costs, Bahrain helps eliminate this challenge while offering much of the same benefits that these others offer. It is a proposition that is almost too good to be true. And that is why you should no longer wait to take action.
What should you do to start a business in Bahrain?
Setting up in Bahrain is a straightforward process, and can be initiated through the country’s Economic Development Board (BahrainEDB) website. However, for many businesses, you will require the presence of a local sponsor to set up your business in Bahrain.
Having a corporate partner as your sponsor has its own advantages as well, especially if the partner is well-equipped to assist you with your business other needs as well.
We, at Al Wasel, are good at doing business in Bahrain. We make business happen, with our services ranging from sponsoring, to trading to sourcing and recruiting HR for your business.
Connect with us today, and begin your business set up in Bahrain with zero hassle.