About Bahrain

While examining financial position of the kingdom it has been found that oil and natural gas play a dominant role in Bahrain’s economy. Despite the Government’s past efforts to diversify the economy, oil still comprises 85% of Bahraini budget revenues. The Central Bank interest rate for 2 years revolves around 2.75% which is considered lowest in GULF counties. Other major economic activities are production of aluminum. Financial and Investment segment is the Bahrain’s second biggest contributor in GDP after oil and gas. Bahrain continues to seek new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries. In April 2018 Bahrain announced it had found a significant oil field off the country’s west coast but is still assessing how much of the oil can be extracted profitably.

Since end of 2018 Bahrain has started VAT. That is being implemented step by step from large businesses to small businesses. All products and services of VAT registered companies will be subject to a tax of 5% (of value). As the burden of tax is levied on end consumer the investors are not much effected other than compliance.