Bahrain positions itself as a startup hub in the MENA region



The Middle East has long been seen as a land of opportunity for established businesses.

But increasingly, it’s becoming a new hub for emerging business talent, from switched-on entrepreneurs and startup job seekers to game changing innovators working across an array of exciting new sectors and revolutionizing existing ones.

While the likes of Dubai, Amman and Cairo are well known as business hubs, the smaller state of Bahrain is rapidly becoming a hotspot for startups looking to technology and finance for their ventures.

According to the 2017–18 Global Competitiveness Report, Bahrain was among the top 50 countries who are witnessing an increase in the number of startups setting up shop, at a Compound Annual Growth Rate of 46.2%. The Kingdom island strives to provide a supporting ecosystem for rapid innovation growth by developing a comprehensive infrastructure to help new companies get their ideas off the ground and take them to market.

Funding Opportunities

At the heart of this growth in entrepreneurship and innovation are the funding opportunities available for new ventures and entrepreneurs. Launched in 2018, the $100 million Al Waha Fund of Funds aims to nurture the growth of venture capital (VC) investment in the country.

Backed by the likes of heavyweight market players such as the Bahrain Development Bank, Batelco and the National Bank of Bahrain, the initiative focuses on investing in technology, fintech and smart cities with the objective of positioning Bahrain and the wider MENA region at the forefront of innovation.

Funding platforms working within its portfolio include Beco CapitalShorooq Partners and MSA Capital, all of whom are helping take ideas to market and support the growth cycle of entrepreneurial ventures in the region.

While the Covid-19 pandemic has had a devastating impact on business around the world, the Bahraini government has provided an infrastructure that keeps incubators and investors interested in new opportunities. For those working in fintech, logistics or healthtech, there are new demands now put on their services from cashless payments to new supply chains.

The government also launched a $11.3 billion stimulus package that included financial support for private sector employees, startups as well as the introduction of rent deferrals and loan waivers to keep the economy thriving.

Competitive Operational Costs

Setting up and launching a new venture is also more cost-effective in Bahrain, compared with its neighbouring Dubai or Abu Dhabi.

Commercial properties are four times more expensive in Bahrain’s neighbors, resulting in a considerable saving for fledgling businesses. Additionally, in contrast to specific freezone areas in its neighboring countries, Bahrain as a country operates as a freezone. This means that entrepreneurs can base themselves anywhere within the country at no extra cost.

Other operational expenses are also lower for startups. From internet connections to other utilities such as energy or water. Application and legal fees to set up businesses are also low relative to regional geographies. KPMG’s report suggests that the total cost of launching a new company in Bahrain could be 35% cheaper than anywhere else in the Gulf region.

Encouraging Infrastructure for Entrepreneurs

Bahrain’s authorities ensure that laws and regulations in the country create an environment designed to support innovation, ideas and economic growth.

100% Foreign Business Ownership

As an overseas entrepreneur, the government amended legislation to allow 100% ownership of a startup in most sectors. The decision was made in a bid to diversify the country’s economy outside of oil, and encourage greater business interest and activity from overseas.


Back in 2017, Bahrain’s government took the decision to allow crowdfunding. Only the second country in the Gulf to enable these schemes, the practice has been embraced to further underline the country’s reputation for innovation and foster greater growth at startup level.

Minimum Capital Requirements

Minimum capital requirements for incorporating a company have also been reduced in the majority of sectors, making it more cost effective and attractive to incorporate in Bahrain.

New laws around bankruptcy also aim to encourage investors and startups to set up ventures. These rules aim to maximize the value of bankrupt estates in the country and encourage corporate reorganization over liquidation to offer confidence to anyone contemplating setting up a new startup.

Data Laws

Additionally, the government implemented the Personal Data Protection Law. This legislation positions the country as a leader within the Gulf in the areas of data privacy and security.

The law promotes the efficient and secure processing of big data for commercial use and provides guidelines for the effective transfer of data across borders. For startups, it allows more targeted marketing alongside offering consumers greater trust and transparency in regard to how their personal information is handled.

Bahrain is the gateway to the Gulf

Bahrain is emerging as a leading gateway to the rest of the Gulf and MENA region for entrepreneurs. Geographically, large regional markets like Saudi Arabia, the United Arab Emirates and Kuwait are all less than an hour’s flight away, while it’s easy to scale a new venture by road, sea or air across regional markets.

Structural foundations have also been put in place to foster startup growth including a number of platforms and initiatives:

StartUp Bahrain acts as an ecosystem to support new ventures and give them access to decision makers and corporates via a partnership program. More than 120 startups feature with more than 30 accelerators and incubators (including Brinc) all collaborating to offer support and advice.

Tamkeen is a similar government agency offering support and subsidies around business development, continuity, training and wage support as well as finance opportunities.

The Central Bank of Bahrain launched a regulatory sandbox aimed at enabling firms to test and develop their products in a virtual space. The introduction of this means Bahrain is only the second state in the Gulf to provide this infrastructure for venture builders. The platform offers entrepreneurs working within fintech or the financial services a safe space to test their ideas for up to nine months.

For any entrepreneur looking to use Bahrain as a base to launch their products to the rest of the world, then the government initiative Export Bahrain is another invaluable platform. This initiative aims to help Bahrain-based SMEs export local services and goods to the international market.

With all of this in place, Bahrain is emerging as one of the most exciting new locations for startup talent across the world.




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