# ![](media/image1.jpeg){width="0.7444444444444445in" height="0.6541666666666667in"}  Doing Business In Bahrain: 

# A Country Commercial Guide for U.S. Companies

# 

# INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2004. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.

-   [Chapter 1: Doing Business In
    Bahrain](#chapter-1-doing-business-in-bahrain)

-   [Chapter 2: Political and Economic
    Environment](#chapter-2-political-and-economic-environment)

-   [Chapter 3: Selling U.S. Products and Services](#ch3)

-   [Chapter 4: Leading Sectors for U.S. Export and Investment](#ch4)

-   [Chapter 5: Trade Regulations and Standards](#ch5)

-   [Chapter 6: Investment Climate](#ch6)

-   [Chapter 7: Trade and Project Financing](#ch7)

-   [Chapter 8: Business Travel](#ch8)

-   [Chapter 9: Contacts, Market Research and Trade
    Events](#chapter-9-contacts-market-research-and-trade-events)

-   [Chapter 10: Guide to Our Services](#ch10)

[![](media/image1.jpeg){width="0.7444444444444445in"
height="0.6541666666666667in"} Doing Business In Bahrain:
1](#doing-business-in-bahrain)

[A Country Commercial Guide for U.S. Companies
1](#a-country-commercial-guide-for-u.s.-companies)

[INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S.
DEPARTMENT OF STATE, 2004. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED
STATES.
1](#international-copyright-u.s.-foreign-commercial-service-and-u.s.-department-of-state-2004.-all-rights-reserved-outside-of-the-united-states.)

[*Chapter 1: Doing Business In Bahrain*
8](#chapter-1-doing-business-in-bahrain)

[**Market Overview** **Return to top**
8](#market-overview-return-to-top)

[**Market Challenges** **Return to top**
9](#market-challenges-return-to-top)

[**Market Opportunities** **Return to top**
10](#market-opportunities-return-to-top)

[**Market Entry Strategy** **Return to top**
13](#market-entry-strategy-return-to-top)

[Return to table of contents 13](#__RefHeading___Toc96013910)

[Chapter 2: Political and Economic Environment
14](#chapter-2-political-and-economic-environment)

[Return to table of contents 14](#__RefHeading___Toc96013912)

[Chapter 3: Selling U.S. Products and Services
15](#chapter-3-selling-u.s.-products-and-services)

[**Using an Agent or Distributor** **Return to top**
15](#using-an-agent-or-distributor-return-to-top)

[**Establishing an Office** **Return to top**
16](#establishing-an-office-return-to-top)

[**Franchising** **Return to top** 24](#franchising-return-to-top)

[**Direct Marketing** **Return to top**
25](#direct-marketing-return-to-top)

[**Joint Ventures/Licensing** **Return to top**
25](#joint-ventureslicensing-return-to-top)

[**Selling to the Government** **Return to top**
25](#selling-to-the-government-return-to-top)

[**Distribution and Sales Channels** **Return to top**
26](#distribution-and-sales-channels-return-to-top)

[**Selling Factors/Techniques** **Return to top**
27](#selling-factorstechniques-return-to-top)

[**Electronic Commerce** **Return to top**
27](#electronic-commerce-return-to-top)

[**Trade Promotion and Advertising** **Return to top**
28](#trade-promotion-and-advertising-return-to-top)

[**Pricing** **Return to top** 39](#pricing-return-to-top)

[**Sales Service/Customer Support** **Return to top**
39](#sales-servicecustomer-support-return-to-top)

[**Protecting Your Intellectual Property** **Return to top**
39](#protecting-your-intellectual-property-return-to-top)

[**Due Diligence** **Return to top** 40](#due-diligence-return-to-top)

[**Local Professional Services** **Return to top**
41](#local-professional-services-return-to-top)

[**Web Resources** **Return to top** 42](#web-resources-return-to-top)

[Chapter 4: Leading Sectors for U.S. Export and Investment
45](#chapter-4-leading-sectors-for-u.s.-export-and-investment)

[Commercial Sectors 45](#__RefHeading___Toc96013937)

[**Motor Vehicles and Vehicle Parts**
46](#motor-vehicles-and-vehicle-parts)

[Overview Return to top 46](#overview-return-to-top)

[Best Products/Services Return to top
46](#best-productsservices-return-to-top)

[Opportunities Return to top 46](#opportunities-return-to-top)

[Resources Return to top 46](#resources-return-to-top)

[**Medical Equipment** 47](#medical-equipmenthealthcare)

[Overview Return to top 47](#overview-return-to-top-1)

[Best Prospects/Services Return to top
47](#best-prospectsservices-return-to-top)

[Opportunities Return to top 47](#opportunities-return-to-top-1)

[Resources Return to top 48](#resources-return-to-top-1)

[**Air Conditioning and Refrigiration Equipment**
49](#air-conditioning-and-refrigiration-equipment)

[Overview Return to top 49](#overview-return-to-top-2)

[**Equipment** 49](#equipment)

[Best Prospects/Services Return to top
49](#best-prospectsservices-return-to-top-1)

[Opportunities Return to top 49](#opportunities-return-to-top-2)

[Resources Return to top 49](#resources-return-to-top-2)

[**Computers and Peripherals** 50](#computers-and-peripherals)

[Overview Return to top 50](#__RefHeading___Toc96013956)

[Best Prospects/Services Return to top
50](#best-prospectsservices-return-to-top-2)

[Opportunities Return to top 50](#opportunities-return-to-top-3)

[Resources Return to top 50](#resources-return-to-top-3)

[**Telecommunications** 52](#telecommunications)

[Overview Return to top 52](#overview-return-to-top-4)

[Best Prospects/Services Return to top
52](#best-prospectsservices-return-to-top-3)

[Opportunities Return to top 52](#opportunities-return-to-top-4)

[Resources Return to top 52](#resources-return-to-top-4)

[**Financial Services** 54](#financial-services)

[Overview Return to top 54](#overview-return-to-top-5)

[Best Products/Services Return to top
54](#best-productsservices-return-to-top-1)

[Opportunities Return to top 54](#opportunities-return-to-top-5)

[Resources Return to top 55](#resources-return-to-top-5)

[**Education and Training** 56](#education-and-training)

[Overview Return to top 56](#overview-return-to-top-6)

[Best Products/Services Return to top
56](#best-productsservices-return-to-top-2)

[Opportunities Return to top 56](#opportunities-return-to-top-6)

[Resources Return to top 57](#resources-return-to-top-6)

[**Electrical Power** 58](#electrical-power)

[Overview Return to top 59](#overview-return-to-top-7)

[Best Products/Services Return to top
59](#best-productsservices-return-to-top-3)

[Opportunities Return to top 59](#opportunities-return-to-top-7)

[Resources Return to top 59](#resources-return-to-top-7)

[**Water Desalination** 60](#water-desalination)

[Overview Return to top 61](#overview-return-to-top-8)

[Best Products/Services Return to top
61](#best-productsservices-return-to-top-4)

[Opportunities Return to top 61](#opportunities-return-to-top-8)

[Resources Return to top 62](#resources-return-to-top-8)

[**Construction** 62](#construction)

[Overview Return to top 62](#overview-return-to-top-9)

[Best Products/Services Return to top
63](#best-productsservices-return-to-top-5)

[Opportunities Return to top 63](#opportunities-return-to-top-9)

[Resources Return to top 63](#resources-return-to-top-9)

[Agricultural Sectors Return to top
64](#agricultural-sectors-return-to-top)

[**Frozen/Chilled Beef** **Return to top**
64](#frozenchilled-beef-return-to-top)

[Poultry Meat Return to top 65](#poultry-meat-return-to-top)

[Resources Return to top 66](#resources-return-to-top-10)

[Chapter 5: Trade Regulations and Standards
67](#chapter-5-trade-regulations-and-standards)

[**Import Tariffs** **Return to top** 67](#import-tariffs-return-to-top)

[**Trade Barriers** **Return to top** 68](#trade-barriers-return-to-top)

[**Import Requirements and Documentation** **Return to top**
68](#import-requirements-and-documentation-return-to-top)

[**U.S. Export Controls** **Return to top**
69](#u.s.-export-controls-return-to-top)

[**Temporary Entry** **Return to top**
70](#temporary-entry-return-to-top)

[**Labeling and Marking Requirements** **Return to top**
70](#labeling-and-marking-requirements-return-to-top)

[**Prohibited and Restricted Imports** **Return to top**
70](#prohibited-and-restricted-imports-return-to-top)

[**Customs Contact Information** **Return to top**
72](#customs-contact-information-return-to-top)

[**Standards** **Return to top** 74](#standards-return-to-top)

[Overview Return to top 74](#overview-return-to-top-10)

[Standards Organizations Return to top
75](#standards-organizations-return-to-top)

[Conformity Assessment Return to top
75](#conformity-assessment-return-to-top)

[Product Certification Return to top
76](#product-certification-return-to-top)

[Accreditation Return to top 76](#accreditation-return-to-top)

[Publication of Technical Regulations Return to top
77](#publication-of-technical-regulations-return-to-top)

[Labeling and Marking Return to top
77](#labeling-and-marking-return-to-top)

[**Trade Agreements** **Return to top**
78](#trade-agreements-return-to-top)

[**Web Resources** **Return to top** 78](#web-resources-return-to-top-1)

[Chapter 6: Investment Climate 80](#chapter-6-investment-climate)

[**Openness to Foreign Investment** **Return to top**
80](#openness-to-foreign-investment-return-to-top)

[**Conversion and Transfer Policies** **Return to top**
82](#conversion-and-transfer-policies-return-to-top)

[**Expropriation and Compensation** **Return to top**
83](#expropriation-and-compensation-return-to-top)

[**Dispute Settlement** **Return to top**
83](#dispute-settlement-return-to-top)

[**Performance Requirements and Incentives** **Return to top**
84](#performance-requirements-and-incentives-return-to-top)

[**Right to Private Ownership and Establishment** **Return to top**
84](#right-to-private-ownership-and-establishment-return-to-top)

[**Protection of Property Rights** **Return to top**
85](#protection-of-property-rights-return-to-top)

[**Transparency of Regulatory System** **Return to top**
86](#transparency-of-regulatory-system-return-to-top)

[**Efficient Capital Markets and Portfolio Investment** **Return to
top**
87](#efficient-capital-markets-and-portfolio-investment-return-to-top)

[**Political Violence** **Return to top**
87](#political-violence-return-to-top)

[**Corruption** **Return to top** 88](#corruption-return-to-top)

[**Bilateral Investment Agreements** **Return to top**
88](#bilateral-investment-agreements-return-to-top)

[**OPIC and Other Investment Insurance Programs** **Return to top**
88](#opic-and-other-investment-insurance-programs-return-to-top)

[**Labor** **Return to top** 88](#labor-return-to-top)

[**Foreign -Trade Zones/Free Ports** **Return to top**
89](#foreign--trade-zonesfree-ports-return-to-top)

[**Foreign Direct Investment Statistics** **Return to top**
89](#foreign-direct-investment-statistics-return-to-top)

[**Web Resources** **Return to top** 92](#web-resources-return-to-top-2)

[Chapter 7: Trade and Project Financing
95](#chapter-7-trade-and-project-financing)

[**How Do I Get Paid (Methods of Payment)** **Return to top**
95](#how-do-i-get-paid-methods-of-payment-return-to-top)

[**How Does the Banking System Operate** **Return to top**
95](#how-does-the-banking-system-operate-return-to-top)

[**Foreign-Exchange Controls** **Return to top**
96](#foreign-exchange-controls-return-to-top)

[**U.S. Banks and Local Correspondent Banks** **Return to top**
96](#u.s.-banks-and-local-correspondent-banks-return-to-top)

[**Project Financing** **Return to top**
97](#__RefHeading___Toc96014037)

[**Web Resources** **Return to top** 97](#web-resources-return-to-top-3)

[Chapter 8: Business Travel 98](#chapter-8-business-travel)

[**Business Customs** **Return to top**
98](#business-customs-return-to-top)

[**Travel Advisory** **Return to top**
98](#travel-advisory-return-to-top)

[**Visa Requirements** **Return to top**
98](#visa-requirements-return-to-top)

[**Telecommunications** **Return to top**
99](#telecommunications-return-to-top)

[**Transportation** **Return to top**
100](#transportation-return-to-top)

[**Language** **Return to top** 101](#language-return-to-top)

[**Health** **Return to top** 101](#health-return-to-top)

[**Local Time, Business Hours, and Holidays** **Return to top**
101](#local-time-business-hours-and-holidays-return-to-top)

[**U.S. Embassy, Bahrain 2005 Holiday Schedule**
101](#u.s.-embassy-bahrain-2005-holiday-schedule)

[**Temporary Entry of Materials and Personal Belongings** **Return to
top**
103](#temporary-entry-of-materials-and-personal-belongings-return-to-top)

[**Web Resources** **Return to top**
103](#web-resources-return-to-top-4)

[Chapter 9: Contacts, Market Research, and Trade Events
105](#chapter-9-contacts-market-research-and-trade-events)

[**Contacts** **Return to top** 105](#contacts-return-to-top)

[**Market Research** **Return to top**
111](#market-research-return-to-top)

[**Trade Events** **Return to top** 111](#trade-events-return-to-top)

[Chapter 10: Guide to Our Services
113](#chapter-10-guide-to-our-services)

# 

# 

# Chapter 1: Doing Business In Bahrain

-   [Market Overview](#market-overview-return-to-top)

-   [Market Challenges](#market-challenges-return-to-top)

-   [Market Opportunities](#makretopportunites)

-   [Market Entry Strategy](#market-entry-strategy-return-to-top)

## Market Overview [**Return to top**](#chapter-1-doing-business-in-bahrain)

-   Bahrain\'s almost \$9.6 billion 2003 GDP economy has been growing 4
    to 5 percent per year for the last five years. Its population of
    nearly 690,000 enjoys a per capita income estimated at \$16,900 on a
    purchasing power parity basis. The Government of Bahrain keeps price
    inflation low and its currency stable (the Bahraini Dinar is pegged
    at .377 to one U.S. dollar).

-   The U.S. trade deficit with Bahrain in 2004 was \$128 million, a
    negative swing of \$247 million from the \$119 million trade surplus
    in 2003. U.S. goods exports in 2004 were \$278 million, down 44
    percent from the previous year. Corresponding U.S. imports from
    Bahrain were \$406 million, up 7.4 percent. Bahrain is currently the
    88^th^ largest export market for U.S. goods. The stock of U.S.
    foreign direct investment (FDI) in Bahrain in 2003 was \$196
    million; up from \$70 million in 2002. In February 2002, the former
    Emirate of Bahrain became the Kingdom of Bahrain, and adopted a new
    constitution. Subsequent democratic reforms include universal
    suffrage, the first municipal elections in half a century (May
    2002), and the first parliamentary elections in 30 years (October
    2002). In 2005, the Heritage Foundation listed Bahrain as the
    world's 20th freest economy -- the highest ranking in the region.
    The United States Trade Representative (USTR) concluded bilateral
    Free Trade Agreement (FTA) negotiations in May 2004 and signed the
    Free Trade Agreement in September 2004. Implementation of the FTA
    awaits ratification by both legislatures. The agreement seeks to
    expand and promote the scope of economic, commercial, investment,
    and trade relations between the two countries.

-   The volume of trade between the U.S. and Bahrain (\$684 million
    in 2004) dropped significantly from 2003 to 2004 because of a
    decline in U.S. exports to Bahrain of over \$200 million, mostly
    attributed to a fall in sales of aircraft and parts following
    several years of strong sales. The U.S. is consistently one of
    Bahrain's leading trading partners with \$278 million in U.S.
    exports to Bahrain in 2004. U.S. products that traditionally do
    particular well are in aircraft and motor vehicles, mechanical and
    electrical, and medical equipment. U.S. firms are also involved in
    major infrastructure projects. Over 180 U.S. companies are currently
    represented in Bahrain with virtually all major U.S.-product brand
    names represented in local retail stores.

-   Capitalizing on Bahrain\'s long history as a trading nation, the
    Government of Bahrain has developed the transportation and
    communication infrastructure necessary to attract and foster
    international business. Diversifying its economy to reduce Bahrain's
    reliance on oil, the government has become a regional financial
    center with a regulatory infrastructure of high international
    standards. To overcome its small size, Bahrain has further sought to
    position itself as a regional services hub. After early success, the
    financial, telecommunications, and transportation sectors have faced
    stiff competition from Dubai and elsewhere. In its quest to increase
    foreign investment, the Government of Bahrain targeted six
    \"economic clusters\" for further expansion: tourism, information
    and communication technology, health care, education and training,
    business services, and financial services. Downstream aluminum and
    petrochemicals industries also remain priorities.

-   Oil revenues generate almost three-quarters, the government is (73%
    in 2003), and inexpensive gas fuels aluminum, iron, and
    petrochemical production facilities. The Bahraini Government hopes
    that exploration by ChevronTexaco and Petronas in recently opened
    offshore sites will yield commercially viable finds of oil.

-   Based on the 2003-2004 budget, government expenditures will account
    for close to 30 percent of Bahrain\'s GDP. The government is deeply
    involved in industry, with wholly or partially government-owned
    enterprises still dominating much of the economy. Such leading
    enterprises as Bapco (oil refining), ALBA (aluminum) and Batelco
    (telecommunications), are all parastatals of varying degree. On
    February 8, 2005, Bapco announced access to \$1 billion in credit
    facilities from nine regional and international banks to develop and
    fund new investments, to include a \$685 million low-sulphur diesel
    project and a gas desulphurization project.

-   Islamic banking is growing steadily. The Government of Bahrain seeks
    to strengthen the Islamic financial market in Bahrain.

-   The Government of Bahrain is moving ahead with a number of
    industrial and infrastructure projects, which are driven by
    commercial, economic and social imperatives (expansion of
    electricity and water networks, job creation, and export expansion),
    which was made possible by years of healthy oil revenues.

## Market Challenges [**Return to top**](#chapter-1-doing-business-in-bahrain) 

-   The divide between the government and the private sector is not well
    defined in Bahrain, leading to potential conflicts of interest. In a
    few cases where entrenched local business interests are threatened,
    government decision-making becomes opaque. U.S. companies note a
    lack of transparency in government project tendering at times (see
    Chapter 6, Investment Climate). The GOB implemented a new tenders
    law in January 2003 to promote a more transparent tendering process.
    The newly established Tenders Board regulates and oversees most of
    the Government's tenders and purchases.

-   Entrenched local business interests with government influence can
    cause problems for potential competitors. Interpretation and
    application of the law sometimes varies by ministry, and may be
    dependent on the stature and connections of an investor\'s local
    partner. Departures such as these from the consistent, transparent
    application of regulations and the law remain rare, and investors
    are usually well pleased with government cooperation and support.

-   Bureaucracy and poor coordination between ministries on occasion
    impedes new industrial ventures. The government\'s priority of
    \"Bahrainization\" of the labor force -- a quota system requiring
    employers to employ a minimum percentage of Bahrainis -- can lead to
    delays and confusion over work permit issuance and renewal. The
    Crown Prince launched a labor reform process seeking to promote the
    employment and training of Bahraini workers. The process may result
    in legal changes in the labor field.

-   Periodically -- usually due to the Bahraini government's efforts to
    promote greater numbers of Bahraini citizens in the workforce --
    foreign firms have problems obtaining required work permits and
    residence visas for expatriate employees. However, this is not a
    matter of high-level policy and can often be resolved on a
    case-by-case basis.

[]{#makretopportunites .anchor}

## Market Opportunities [Return to top](#chapter-1-doing-business-in-bahrain) 

-   Bahrain offers a number of advantages as a business or investment
    destination, including a Bilateral Investment Treaty (BIT) with the
    United States (in force as of May 2001) and a bilateral Free Trade
    Agreement (FTA) signed in September 2004. English is widely spoken,
    and the openness of a centuries-old trade-based culture makes
    businesses and visitors feel welcome. The presence of the U.S.
    Navy\'s Fifth Fleet and Bahrain\'s designation as a Major Non-NATO
    Ally have given the island international recognition.

-   The Government of Bahrain has substantially liberalized Bahrain\'s
    economy and deepened commercial ties with the U.S. In the past two
    years, Bahrain has passed laws liberalizing foreign property
    ownership and tightening its anti-money laundering laws. Bahrain was
    removed from the U.S. Special 301 Watch List in 1999, and has
    remained off through 2005.

-   In spring 2002, the Government announced reforms allowing
    expatriates working in Bahrain to change jobs more easily, which
    introduced more flexibility into the labor market. In September
    2002, the Government announced that both Bahrainis and expatriate
    workers would have the right to join unions under the new labor and
    trade unions law.

-   The U.S.-Bahrain Bilateral Investment Treaty (BIT) entered into
    force in May 2001, as the first BIT in the GCC. The U.S.-Bahrain
    Bilateral Investment Treaty (BIT) provides benefits and protection
    to U.S. investors in Bahrain, such as most-favored-nation treatment
    and national treatment, the right to make financial transfers freely
    and without delay, international law standards for expropriation and
    compensation cases, and access to international arbitration. The BIT
    guarantees national treatment for U.S. investments across all
    sectors, with exceptions for ownership of television, radio (or
    other media), fisheries, and privatization of oil dredging or
    exploration. Bahrain also provides most-favored-nation or national
    treatment status to U.S. investments in air transportation, the
    buying or ownership of land, and the buying or ownership of shares
    traded on the Bahrain Stock Exchange (BSE).

-   In June 2002, the U.S. and Bahrain signed a Trade and Investment
    Framework Agreement (TIFA), setting up a council for the negotiation
    of trade and investment issues. In May 2003, the Office of the
    United States Trade Representative (USTR) announced its intention to
    negotiate a free trade agreement with Bahrain. U.S.-Bahrain FTA
    negotiations were concluded in May 2004. The agreement was signed in
    September 2004 and is currently awaiting legislative approval from
    both the U.S. Congress and Bahrain's National Assembly. The
    agreement seeks to expand and promote economic, commercial,
    investment, and trade relations between the two countries.

-   In late 2004, GCC member state Saudi Arabia noted its concern about
    the U.S.-Bahrain Free Trade Agreement, claiming that the agreement
    violated GCC rules. Bahrain insists that the agreement is in keeping
    with GCC provisions concerning bilateral trade. Other GCC countries
    are in the process of negotiating an FTA with the United States.

-   In an economy largely dominated by parastatals (outside of the
    financial services sector), the Government of Bahrain seeks to
    foster a greater private sector role in economic growth. Following
    the creation of a Supreme Privatization Council in the spring of
    2001, the King of Bahrain, Shaikh Hamad bin Isa Al-Khalifa, issued a
    decree on October 2002 laying out guidelines for privatizing the
    following sectors:

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-   Tourism

-   Telecommunications

-   Transport

-   Electricity and water

-   Ports and airport services

-   Oil and gas

-   Postal services.

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-   The telecommunications sector was the first key sector to be
    liberalized in Bahrain following the government\'s announced
    interest in opening traditionally government-controlled industries.
    The Telecommunications Regulatory Authority (TRA), established in
    late 2002, awarded a mobile telecommunications services license to
    MTC-Vodafone, thus ending the monopoly of Bahrain\'s telecom service
    provider, Batelco. Telecommunications liberalization also extended
    to paging services, very small aperture terminal (VSAT), public
    access mobile radio services, international telecommunications
    facilities, international telecommunications services, national
    fixed services, internet service provider (ISP) and value-added
    services license following the full liberalization of the sector on
    July 1, 2004. As of December 2004, the TRA announced the provision
    of three International Telecommunications Facility licenses (IFLs),
    five International Telecommunications Services Licenses (ISLs), five
    VSAT licenses, fifteen value-added Services (VAS) \"Class\" licenses
    and eight Internet Service Provider (ISP) licenses.

-   The Government, under the privatization law, has made a commitment
    to gradually dispose of its interests and stakes in certain
    companies. But some deputies in the National Assembly\'s lower house
    (Council of Representatives) criticized the Government\'s decision
    to sell the remaining state holdings of the Bahrain
    Telecommunication Company (Batelco).

-   Public transportation service was privatized in 2003. CARS, a
    Bahrain-UAE joint venture, started operating in May 2003 with 41
    new, air-conditioned, 52-seat buses. The CARS company completed its
    plan to acquire 20 new buses by the end of 2003. Its total
    investment in the public transportation privatization project is
    approximately \$10 million.

-   The Kingdom\'s first independent power plant project (IPP) was also
    successfully tendered and awarded to Bahraini-based Al Ezzel
    Independent Power Producer (IPP), which is equally owned by a
    Belgian-Gulf consortium of Trabactel EGI and Gulf Investment
    Corporation.

-   Four international operators have also been short-listed to manage
    Mina Salman and the new Hidd ports.

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-   The Government of Bahrain has a generally liberal approach to
    foreign investment and is eager to improve Bahrain\'s attractiveness
    to international investors and businesses. Top government officials
    make frequent public statements citing growth of foreign investment
    as one of the government\'s main priorities. According to GOB
    officials, Bahrain rates number 29 worldwide in attracting foreign
    direct investment and the average foreign direct investment into the
    local market reached \$1.7 billion over the past three years. The
    government has focused its efforts on the entry of new private
    firms, particularly in the information and communications
    technology, education and training services, tourism, financial
    services, business services, healthcare services and downstream
    industries. Bahrain\'s Crown Prince is also an outspoken proponent
    of privatization in Bahrain. The Crown Prince took over the
    chairmanship of the Economic Development Board (EDB), a
    \"one-stop-shop\" for potential investors, and in 2004 was entrusted
    with the King\'s labor, economic, and training reform visions.

-   The government actively seeks Bahraini and foreign private
    investments in large infrastructure projects. Previously, most such
    activity (other than hotels) was funded by development agencies from
    other Gulf countries (particularly Kuwait, UAE, and Saudi Arabia).
    Foreign-owned companies are eligible for partial financing from the
    state-owned Bahraini Development Bank (BDB), if they meet certain
    criteria such as providing training and employment to a significant
    number of Bahrainis.

-   There have been no expropriations in recent years, and no cases in
    contention. The U.S. - Bahrain Bilateral Investment Treaty (BIT)
    protects U.S. investments by banning all expropriations (including
    \"creeping\" and \"measures tantamount to\") except those for a
    public purpose. In which case, it must be carried out in a
    non-discriminatory manner, with due process, and prompt, adequate,
    effective compensation.

-   No organized economic boycotts took place in Bahrain in 2003 and
    2004, in spite of the war in Iraq.

-   Bahrain's economic performance further improved across the board in
    2004 due to higher average oil prices throughout the entire year
    yielding greater government revenues, resulting in continued large
    scale investments, greater confidence in the banking sector, and the
    resumption of major private sector projects in Bahrain.

-   The [Commercial Section in the U.S. Embassy
    Bahrain](http://www.buyusa.gov/bahrain), encourages U.S. companies
    interested in coming to Bahrain to consult with them for additional
    details and guidance.

## Market Entry Strategy [**Return to top**](#chapter-1-doing-business-in-bahrain)

-   In general, establishing a business presence in Bahrain is
    straightforward. The Government of Bahrain (GOB) actively seeks to
    increase foreign direct investment in Bahrain.

-   A carefully selected local partner can advise U.S. firms on
    advertising, promotion, and pricing. Due to the difference in
    culture and conditions, techniques and phraseology that are
    effective in the U.S. may not be effective in Bahrain.

-   Face-to-face contact with importers can significantly increase a
    company\'s business prospects. Maintaining business relationships
    with regular communication is also important. U.S. suppliers should
    stress U.S. origin, competitive prices, high quality, customer
    service, customer satisfaction, and new-to-market status if
    applicable.

-   U.S. toll-free (1-800) numbers are normally not toll-free from
    outside the U.S. American companies that advertise their products
    and services in Bahrain should consider obtaining international
    toll-free service.

# [[]{#__RefHeading___Toc96013910 .anchor}Return to table of contents](#doing-business-in-bahrain)

# Chapter 2: Political and Economic Environment

For background information on the political and economic environment of
the country, please click on the link below to the U.S. Department of
State Background Notes.

<http://www.state.gov/r/pa/ei/bgn/26414.htm>

# [Return to table of contents](#doing-business-in-bahrain)

[[]{#ch3 .anchor}Return to table of
contents](#doing-business-in-bahrain)

# Chapter 3: Selling U.S. Products and Services 

-   [Using an Agent or
    Distributor](#using-an-agent-or-distributor-return-to-top)

-   [Establishing an Office](#establishing-an-office-return-to-top)

-   [Franchising](#franchising-return-to-top)

-   [Direct Marketing](#direct-marketing-return-to-top)

-   [Joint Ventures/Licensing](#joint-ventureslicensing-return-to-top)

-   [Selling to the
    Government](#selling-to-the-government-return-to-top)

-   [Distribution and Sales
    Channels](#distribution-and-sales-channels-return-to-top)

-   [Selling
    Factors/Techniques](#selling-factorstechniques-return-to-top)

-   [Electronic Commerce](#electronic-commerce-return-to-top)

-   [Trade Promotion and
    Advertising](#trade-promotion-and-advertising-return-to-top)

-   [Pricing](#pricing-return-to-top)

-   [Sales Service/Customer
    Support](#sales-servicecustomer-support-return-to-top)

-   [Protecting Your Intellectual
    Property](#protecting-your-intellectual-property-return-to-top)

-   [Due Diligence](#due-diligence-return-to-top)

-   [Local Professional
    Services](#local-professional-services-return-to-top)

-   [Web Resources](#web-resources-return-to-top)

## Using an Agent or Distributor [**Return to top**](#ch3)

Bahrain offers several advantages to U.S. and other foreign investors,
including a Bilateral Investment Treaty (BIT) with the United States (in
force as of May 2001) and a bilateral Free Trade Agreement (FTA) signed
in September 2004, (but not yet ratified or in force).

Because of the National Treatment offered to American firms in the
Bilateral Investment Treaty (BIT), American firms interested in selling
products exclusively in Bahrain are no longer required to appoint a
commercial agent, though they may opt to do so anyway. A commercial
agent is any Bahraini party appointed by a foreign party to represent
the foreign party's product or service in Bahrain. Local law governs the
relationship, whether the relationship is structured as a
distributorship, sales agency, or otherwise. Appointing a commercial
agent enables the foreign party to achieve significant market
penetration without establishing a direct presence.

Prior to 2003, traders that imported products with the aid of an agent
had to pay the agent a commission rate (maximum five percent). In 2003,
this fee was lifted; importers are no longer restrained by their
agents\' monopoly of the local market.

A company that services even one additional Gulf Cooperation Council
(GCC) country qualifies as a regional office. Bahraini law does not
require foreign companies to hire a local agent or partner to establish
a regional office in Bahrain. Nevertheless, U.S. companies setting up
regional offices typically find it useful to have a relationship with a
local representative, particularly to deal with the local bureaucracy.

When a contract is being drawn up, the use of the term \"agent\" often
creates difficulties due to definitional differences. The Ministry of
Industry and Commerce allows for substitution of the term \"agent\" with
the term \"distributor\", which can more accurately describe the
function intended.

Contracts between the Principal and the Bahraini agent should contain
the names, nationalities, and assets of the parties, along with a
description of the types of products handled.

A clause in the Commercial Agencies Law requires the agent to provide
spare parts and tools needed to maintain and repair any machinery or
equipment sold by the agency (Article 3, paragraph h, Legislative Decree
No. 10 of 1992).

Appointing a representative agent in Bahrain requires care and a
thorough vetting of candidates. The [Commercial Section of the U.S.
Embassy](http://www.buyusa.gov/bahrain) can provide assistance.

A list of business programs offered by the Commercial Section in Bahrain
can also be obtained from our website at
<http://www.buyusa.gov/bahrain>.

## Establishing an Office [**Return to top**](#ch3)

The Ministry of Industry and Commerce commercial registration law
requires a company to register at Bahrain Investors' Center (BIC),
located at the Seef Mall in the Seef District, before conducting
business in Bahrain.

The Domestic Trade Affairs Directorate in the Ministry of Industry and
Commerce regulates all commercial licenses and activities in Bahrain.
The Commercial Registration Department issues commercial licenses,
collects registration fees, processes Commercial Registration (CR)
applications, publishes announcements in the official gazette, and
provides counseling services to potential investors.

Applicants may obtain a Commercial License Application Form from the
Bahrain Investors' Cente (BIC), located at the Seef Mall, or
electronically from the Ministry of Industry and Commerce's
[webpage](http://www.commerce.gov.bh/).

**Bahrain Investors' Center (BIC)**

Seef Mall

Seef District\
P.O. Box 5479\
Phone: +(973) 17-562222\
Manama

Kingdom of Bahrain

Website: <http://www.commerce.gov.bh/> or [[]{#_Hlk95630648
.anchor}http://www.bi.bh](#_Hlk95630648)

**On-Line Commercial Inquiries**\
The Ministry of Industry and Commerce has an online registration
process. The applicant must first fill out a subscription form at the
Bahrain Investors' Center (BIC), located at the Seef Mall, in the Seef
District of Bahrain. Once registered with the Ministry of Industry and
Commerce (through the Investors' Center), a company may conduct all
dealings with the Ministry via its website:
<http://www.commerce.gov.bh/>. The website also provides comprehensive
information on domestic commercial affairs.

**Hot Line for Commercial Inquiries**\
The Ministry of Industry and Commerce's hotline is +(973) 17-574777
(option number 5). It may be used for commercial inquiries, requesting
information about existing companies, renewing Company Registrations,
and filing complaints.

**Assistance in Establishing a Company**

The Government of Bahrain (GOB) encourages potential foreign investors
to request assistance from the Economic Development Board (EDB), a
government office set up to facilitate foreign direct investment in
Bahrain. The Crown Prince took over the chairmanship of the Economic
Development Board (EDB), a \"one-stop-shop\" for potential investors,
and in 2004 was entrusted with the King\'s labor, economic, and training
reform visions. The EDB has the authority to issue permits and licenses,
and provide land for certain types of investors. However, foreign
companies often find that the EDB does not always facilitate the
registration process.

**Economic Development Board (EDB)**\
Tel: +(973) 17-589999\
Fax: +(973) 17- 589900\
Website: <http://www.bahrainedb.com/>\
E-mail: <edb@bahrainedb.com>

**Registration Agents**\
The Ministry of Industry and Commerce accredits Registration Agents to
provide commercial registration services for applicants. These agents
include law firms, industrial property registration agents, auditing
firms, and consulting companies. Applicants may prefer to work through
these experienced consultants who often provide legal, financial, and
other services. Registration agents generally ensure the best legal
protection available in the Bahrain in accordance with the size, shape,
and activities of the applicant. To obtain a list of accredited
Registration Agents, visit the Ministry of Industry and Commerce's
[website](http://www.commerce.gov.bh/).

Although a local attorney is not required to draw up agency and sales
agreements, it is advisable to use one. The U.S. Embassy can provide a
list of local attorneys. Many well-known international law firms,
including U.S. firms, have offices in Bahrain.

**How to Establish a Business in Bahrain**

+-----------------------------------------------------------------------+
| -   Log on to the Ministry of Industry and Commerce website:          |
|     <http://www.commerce.gov.bh./>                                    |
|                                                                       |
| -   Click *Inquiry*, then select *Business Activity*.                 |
|                                                                       |
| -   Determine what approvals are required for your specific business  |
|     activity.                                                         |
|                                                                       |
| -   For questions, e-mail ecom@commerce.gov.bh, or call the           |
|     Ministry's hotline at +(973) 17-522911.                           |
+-----------------------------------------------------------------------+

↓

+-----------------------------------------------------------------------+
| -   Visit the Investors Services Center (BIC) located at the Seef     |
|     Shopping Mall and fill out a Commerce Registration application    |
|     form.                                                             |
+-----------------------------------------------------------------------+

**↓**

+-----------------------------------------------------------------------+
| -   An Investors Services Center (BIC) representative will direct you |
|     to the appropriate Ministry if prior approval is required for     |
|     your business activity.                                           |
+-----------------------------------------------------------------------+

**↓**

+-----------------------------------------------------------------------+
| -   After receiving the necessary approvals, you must provide a BD 2  |
|     fee, and a copy of the following documents:                       |
|                                                                       |
|     -   Passport                                                      |
|                                                                       |
|     -   CPR (Central Population Registration card)                    |
|                                                                       |
|     -   Resume including educational credentials                      |
|                                                                       |
|     -   Certificates substantiating training and experience           |
|                                                                       |
|     -   Statement of Assets                                           |
+-----------------------------------------------------------------------+

**↓**

+-----------------------------------------------------------------------+
| -   The company will be registered in 1-5 business days, in most      |
|     cases (please refer to Chapter 6: Investment Climate).            |
+-----------------------------------------------------------------------+

Company Registration Options\
Source: Ministry of Industry and Commerce

<table>
<colgroup>
<col style="width: 14%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 14%" />
<col style="width: 12%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td><strong>Corporate Entity Shares</strong></td>
<td><strong>Public Joint Stock</strong></td>
<td><strong>Closed Joint Stock</strong></td>
<td><strong>W.L.L.</strong></td>
<td><strong>Single person</strong></td>
<td><blockquote>
<p><strong>Partnership</strong></p>
</blockquote></td>
<td><blockquote>
<p><strong>Limited Partnership by Shares</strong></p>
</blockquote></td>
<td><strong>Simple Limited Partnership</strong></td>
<td><strong>Branch</strong></td>
<td><strong>Representative Office</strong></td>
</tr>
<tr class="even">
<td><h3 id="characteristics"><em>Characteristics</em> </h3></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td><em>100% Foreign Ownership Allowed</em></td>
<td>Refer to Notes - *2</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>No</td>
<td>No (100% foreign ownership not allowed for local retail) Refer to
Notes - *l</td>
<td>Yes</td>
<td>Yes</td>
</tr>
<tr class="even">
<td><em>Banking/Insurance Activity Allowed</em></td>
<td>Yes</td>
<td>Yes</td>
<td>No</td>
<td>No</td>
<td>No</td>
<td>No</td>
<td>No</td>
<td>Yes</td>
<td>Yes</td>
</tr>
<tr class="odd">
<td><em>Local Operations Allowed</em></td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>No</td>
</tr>
<tr class="even">
<td><em>Minimum Share Capital in Bahraini Dinars</em></td>
<td>1,000,000</td>
<td>250,000</td>
<td>20,000</td>
<td>50,000</td>
<td>N/A</td>
<td>20.000</td>
<td>N/A</td>
<td>N/A</td>
<td>N/A</td>
</tr>
<tr class="odd">
<td><em>Minimum # of Partners Required</em></td>
<td>7</td>
<td>2</td>
<td>2</td>
<td>1</td>
<td>2</td>
<td>4</td>
<td>2</td>
<td>N/A</td>
<td>N/A</td>
</tr>
<tr class="even">
<td><em>Sponsor Required</em></td>
<td>N/A</td>
<td>N/A</td>
<td>N/A</td>
<td>N/A</td>
<td>N/A</td>
<td>N/A</td>
<td>N/A</td>
<td>Refer to Notes - *3</td>
<td>N/A</td>
</tr>
<tr class="odd">
<td><em>Limited Liability</em></td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>No</td>
<td>Refer to Notes - *5</td>
<td>Refer to Notes - *5</td>
<td>Refer to Notes - *4</td>
<td>No</td>
</tr>
<tr class="even">
<td><em>Financial Statement Required</em></td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>No</td>
<td>Yes</td>
<td>No</td>
<td>No</td>
<td>No</td>
</tr>
<tr class="odd">
<td><em>Ordinary General Assembly Required</em></td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>No</td>
<td>No</td>
</tr>
<tr class="even">
<td><em>Operating as a Holding</em></td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>No</td>
<td>No</td>
<td>No</td>
<td>No</td>
<td>No</td>
</tr>
</tbody>
</table>

+----------------------------------+-----------------------------------+
| > **[Notes:]{.underline}**       | > \*3 Sponsor is required for     |
| >                                | > some activities such as trading |
| > \*1 49% foreign ownership of   | > (retail sales)                  |
| > capital allowed (only applied  | >                                 |
| > for retail sales)              | > \*4 Depends on the legal status |
| >                                | > of the parent company           |
| > \*2 The capital for a public   | >                                 |
| > joint stock company can be     | > \*5 Not limited liability for   |
| > 100% local, or 100 foreign     | > shareholders while it is        |
| >                                | > limited liability for limited   |
| > or both                        | > partners                        |
+----------------------------------+-----------------------------------+

**Establishing Manufacturing Facilities**\
The procedures for establishing manufacturing facilities resemble those
for founding any other commercial establishment. Manufacturing
enterprises benefit from duty-free imports, long-term land leases, and a
tax-free environment with no personal or corporate income, no
withholding, and no VAT. When establishing a manufacturing facility in
Bahrain, it is advisable to have a local partner with the ability to
navigate the incorporation procedure and make necessary arrangements
with local authorities.

In principle, private entities may freely establish, acquire, and
dispose of interesting business enterprises, subject to the limitations
noted in this chapter.

Bahrain permits 100 percent foreign-ownership of new industrial entities
and the establishment of representative offices or branches of foreign
companies without local sponsors. Wholly foreign-owned companies may be
set up for regional distribution services and may operate within the
domestic market as long as they do not exclusively pursue domestic
commercial sales. Private investment (foreign or Bahraini) in petroleum
extraction is permitted only under a production-sharing agreement with
Bapco, the state-owned petroleum company.

**Ownership of Land**

Since January 2001, foreign firms and GCC nationals may own land in
Bahrain. Non-GCC nationals may now own high-rise commercial and
residential properties, as well as property in the following sectors:

-   Commercial

-   Industrial

-   Tourism

-   Banking and financial Services

-   Healthcare

-   Education and training

Foreign investors may own commercial property in the following areas:

-   Ahmed Al-Fateh (Juffair) district

-   Hoora district

-   Bu Ghazal district

-   Seef district

-   Northern Manama, including the Diplomatic Area where the main
    international corporations are located

Foreign investors may own residential property in the following tourist
areas:

-   Durrat Al Bahrain

-   Dannat Hawar

-   Al Amwaj Islands

-   Bahrain Financial Harbor

The Amwaj Islands project developer Ossis Property Development Company
E.C. recently announced that expatriates and international/foreign
investors investing in the Amwaj Islands will be issued special
residence permits.

**100% Repatriation of Capital**

Bahrain has no exchange control restrictions on repatriation of capital,
profits and

dividends, enabling full financial transferability of capital, profits
and dividends. The

Bahraini Dinar, which is fully convertible, is pegged to the U.S. dollar
at the fixed rate

of \$1= B.D. 0.377

**Tax Free**

Bahrain levies no taxes on personal or corporate income. There is no
withholding and no valued-added tax (VAT).

**Long-Term Land Leases**\
Companies that do not want to purchase land in Bahrain may lease it from
the government. The Industrial Area Directorate at the Ministry of
Industry oversees long-term land leases, which are available for a
maximum of 50 years. Government lease arrangements are governed by
Legislative Decree Number 28 of 1999, which addresses the Establishment
and Organizing of Industrial Areas by setting out the rights and
obligations of contracting parties.

**Industrial Areas Directorate**

P.O. Box 10908\
Tel: +(973) 17-731155\
Fax: +(973) 17-530939

Website: <http://www.industry.gov.bh/>

**Average Commercial and Industrial Land Purchasing Rates (2004
figures)**

+-----------------------------------+----------------------------------+
| Industrial Land                   | \$2.70 per meter square per year |
|                                   |                                  |
|                                   |                                  |
+-----------------------------------+----------------------------------+
| Industrial construction cost      | \$333 per meter square           |
| (hangar-type structures)          |                                  |
+-----------------------------------+----------------------------------+
| Warehousing (hangar-type          | \$2 to 55 per square meter per   |
| structures)                       | month                            |
+-----------------------------------+----------------------------------+

**Office rents (2004 figures)**

+-----------------------------------+----------------------------------+
| High-end office blocks in         | \$10 to 25 per meter square per  |
| downtown Manama and the           | month, plus services             |
| Diplomatic Area                   |                                  |
|                                   |                                  |
|                                   |                                  |
+-----------------------------------+----------------------------------+
| Medium range unit space (80 to    | \$550 to 1000 per month          |
| 120 square meters)                |                                  |
+-----------------------------------+----------------------------------+

**Residential Rents (2004 figures)**

  ------------------------------------- ---------------------------------
  Villa: 3 to 4 bedroom semi-furnished  \$750 to 3500 per month

  Apartments: 2 bedroom semi-furnished  Starting \$500 per month

  2 bedroom fully furnished             Starting \$ 800 per month
  ------------------------------------- ---------------------------------

**Utilities, Electricity, Water and Municipality Costs (2004 figures)**

  ----------------- ----------------------------- ----------------------------
  **Utilities**     **Commercial Rate**           **Residential Rate**

  **Electricity**   BD 0.012 per kilowatt hour    First 2000 units: BD
                                                  0.006/unit

                                                  Next 3000 units: BD
                                                  0.012/unit

                                                  Additional units: BD
                                                  0.016/unit

  **Water**         First 450 m3: BD 0.300/m3     First 450 m3: BD 0.300/m3

                    Additional amount: BD         Additional amount: BD
                    0.400/m3                      0.400/m3

  **Municipality    10 percent of monthly rent    
  fee**                                           
  ----------------- ----------------------------- ----------------------------

**Labor Standards**

The Labour Law for the private sector promulgated by Amiri Decree Law
Number 23 of 1976, is the main legislation on private sector labor
standards in Bahrain. Normal work hours, in the private sector, are not
to exceed 40 hours per week or 8 hours per day (and are not to exceed 30
hours per week and 6 hours per day during Ramadhan). No employee can
work more than six consecutive hours without a minimum thirty-minute
break (not part of the hours of work). A paid maternity leave of 45 days
must be granted as well as 21 paid holidays (includes official holidays,
etc.), 21 days of annual leave per year (increasing to a period not less
than 28 days after five continuous years of service), and 15 days (full
pay) of sick leave.

**Wages**

There is no national minimum wage labor law. Basic wage rates vary
according to location and industrial sector, while supplementary
benefits, which may include bonuses, free uniforms, free or subsidized
transport, performance incentives and other benefits, vary from company
to company. Most companies provide medical benefits (medical insurance)
but it is not compulsory.

> Guide to the recruitment of non-Bahrainis in the Private Sector

The objective of this guide is to clarify to employers and citizens the
procedures of recruiting non-Bahrainis in accordance with Amiri Decree
Law 33 for 1976 Bahraini Labor Law for the Private Sector Legislation.

**General Instructions**

The Ministry of Labor and Social Affairs issued the Bahraini
Occupational Specification and Classification Directory, which contains
names and codes of occupations that are prevailing in Bahrain. It also
helps in drawing up the economic and statistic profiles of the country.
According to the Directory, the following instructions shall be
observed:

1.  Upon the submission of the application of recruitment from abroad,
    the correct code of the occupation must be registered.

2.  Copies of the Occupational Specification and Classification are
    available at the Foreign Employment Section.

3.  In case of inability to get the required occupational code or to
    reconcile the name and the code, please refer to the Research and
    Labor Studies Section.

4.  The applicants or their representatives shall submit applications or
    delegates authorized by the Ministry of Justice and Islamic Affairs.

5.  If the application is refused, they shall be informed by mail of the
    reasons of such refusal.

 

**Applications Submission Times**

Applications may be submitted daily from 7:15 a.m. to 12:30 p.m.

**Procedures of Submitting Applications and the Required Attachments**

Recruitment Applications for expatriates (non-Bahrainis) for Commercial
Establishments:

> 1\. Complete the recruitment application form.

1.  Provide a copy of the commercial registration.

2.  Provide a copy of the CPR of the applicant or his representative
    with a copy of the official authorization.

3.  Attach agreements, contracts, and licenses that show the size of
    work.

4.  Provide a copy of the social insurance inventory if establishment
    employs ten workers or more.

5.  Establishments employing less than ten workers shall employ at least
    one Bahraini.

6.  If there is difference between the Ministry\'s information and the
    social insurance inventory concerning the number of employees, a
    certificate will be requested from Immigration.

7.  When applying for substitution, a certificate of departure will be
    requested.

8.  The last electricity bill paid, or the bills of the last two months,
    must be submitted.

**New Labor Work Permits**

-   Establishments

BD 100/

-   Local Employment

BD 100/-

 

> **Renewal of Labor Work Permit**

-   Establishments

> BD 100/-

-   Renewal of local employment

BD 150/-

**Transfers**

-   Change of occupation

BD 35/-

-   Local transfer

BD 35/- 

## Franchising [**Return to top**](#ch3)

The demand for U.S. restaurant franchises remains strong in Bahrain. As
of February 2005, over 40 U.S. franchise restaurants were operating in
Bahrain, including: Baskin Robbins, Burger King, California Cheesecake,
Chili\'s, Dairy Queen, Domino\'s Pizza, Donut Inn, Fuddruckers, Gorin\'s
Homemade Ice Cream & Sandwiches, Gyro Wraps, Applebees, Hardees, Hard
Rock Café, Hol\'N\'One, Kentucky Fried Chicken, McDonald\'s, Pizza Hut,
Ponderosa, Round Table California Pizza, Taco Maker, Trader Vic\'s, and
Johnny Carrino\'s.

Bahraini firms are eager to establish new market opportunities and are
interested in investing in foreign franchise concepts. Most franchisees
finance their franchise purchases through bank loans, personal savings
or family investment funds.

## Direct Marketing [**Return to top**](#ch3)

A carefully selected local partner can advise U.S. firms on advertising,
promotion, and pricing. Due to the difference in culture and conditions,
techniques and phraseology that are effective in the U.S. may not be
effective in Bahrain.

Face-to-face contact with importers can significantly increase a
company\'s business prospects. Maintaining business relationships with
regular communication is also important. U.S. suppliers should stress
U.S. origin, competitive prices, high quality, customer service,
customer satisfaction, and new-to-market status if applicable.

U.S. toll-free (1-800) numbers are normally not toll-free from outside
the U.S. American companies that advertise their products and services
in Bahrain should consider obtaining international toll-free service.

## Joint Ventures/Licensing [**Return to top**](#ch3)

The demand for joint venture and licensing opportunities remains high in
Bahrain as core infrastructure, information and communication
technology, electricity and water, tourism, training and education
sectors are privatized and identified as key growth sectors.

American companies are attractive to Bahraini partners due to their
readily recognized names and the opportunity for technology transfer.

The [Commercial Section at the U.S. Embassy in
Bahrain](http://www.buyusa.gov/bahrain) helps match American and
Bahraini firms looking to form joint ventures in both the local and
regional market.

## Selling to the Government [**Return to top**](#ch3)

For government sales, except where an agent is not permitted (e.g.,
sales to the Bahrain Defense Force), it is generally advisable to have a
local agent to serve as a point-of-contact, provide advice on tender
preparation, and act as \"eyes and ears.\" It is generally recommended
to have a local agent or contact vet tender documents prior to their
submission. Bidders must meet the specifications set out in the tender
and offer a competitive price in order to be successful. Local agent can
provide valuable advice on pricing and timing.

In the past, government-tendering procedures for large projects were not
highly transparent. U.S. companies sometimes reported operating at a
disadvantage compared to other international firms. Contracts were not
always decided solely on the basis of price and technical merit, and
selected, pre-qualified firms were sometimes invited to bid on major
government tenders. As of January 2003, however, the newly created
Tenders Board processes all tender decisions valued at BD 10,000
(\$26,525) or higher. Individual ministries and departments may still
process projects valued at less than \$26,525 (BD 10,000). It is too
early to determine the effectiveness of the new government procurement
law on the transparency of the tendering process. A local representative
with strong connections may still be important in the bidding process.

U.S. companies should consider visiting the [Commercial Section in U.S.
Embassy](http://www.buyusa.gov/bahrain) for a commercial briefing in
advance of bidding for a Government project, or before engaging in any
local venture. Professional legal advice may also be appropriate in
which the [Commercial Section in the U.S.
Embassy](http://www.buyusa.gov/bahrain) can provide a list of local law
firms.

Government procurement regulations are available from the Tenders Board
or the Commercial Section in Bahrain. The [Tenders
Board](http://www.bahraintenders.gov.bh./) also advertises its tenders
on their website.

## Distribution and Sales Channels [**Return to top**](#ch3)

The U.S.-Bahrain Bilateral Investment Treaty (BIT), signed by both
governments in 2001, stipulates national treatment for citizens of both
countries in each of their respective territories. This includes the
retail industry, for which 51 percent Bahraini ownership was previously
required. However, certain exceptions to this ruling are provided under
existing Bahraini commercial registration laws.

The Commercial Agencies Law of 1975 (amended in 1992 and 1998) regulates
commercial agencies. The 1998 amendment modernizes the law considerably,
bringing Bahrain into line with its WTO obligations. In place of sole or
exclusive agencies, foreign principals may now appoint multiple agents
in Bahrain. The law provides for the option of fixed-term agency
agreements and the right for a principal to terminate an unproductive
agreement through the Ministry of Commerce. The requirement for
commissions was lifted in 2003.

**Services with Restrictions on Foreign Ownership/Participation:**

-   Legal Services

-   Advertising Services

-   Publishing and Publication of Local Newspapers and Periodicals

-   Freight and Cargo Services

-   Customs Clearance Services

-   Pilotage and Berthing Services

-   Coastal Water Transportation

-   Energy Services Towards the Distribution of Petroleum, Electricity,
    and Water

-   Telecommunications Services

-   Real Estate Services

-   Islamic Pilgrimage Services

**Services Requiring Local Presence:**

-   Accounting, Financial Auditing, Bookkeeping and related Services

-   Advertising Services

-   Architectural and Engineering Services

-   Car Rental Services

-   Census, Market Research and Public Opinion Polling Services

-   Construction Services and Construction Related Services

-   Consultancy and Management Services

-   Debt Collection Services

-   Legal Services

-   Private Security Guard Services

-   Publishing and Printing

-   Real Estate Services

-   Services Incidental to Mining

-   Small Business Services

-   Terrestrial over the Air Radio, Television, Satellite Subscription
    Services in the territory of Bahrain

-   Tourism Hotel Operations and Management

-   Transportation Services

-   Travel Agency Tour Operators and Tourist Guide Services

-   Wholesale and retail Services

## Selling Factors/Techniques [**Return to top**](#ch3)

A carefully selected local partner can advise U.S. firms on advertising,
promotion, and pricing. Due to the difference in culture and conditions,
techniques and phraseology that are effective in the U.S. may not be
effective in Bahrain.

E-commerce is on the rise in Bahrain where computer-literacy rates are
high and people recognize the commercial value of the Internet. A number
of private businesses with no web presence are realizing the importance
of e-commerce websites and are making plans to launch their own
websites.

## Electronic Commerce [**Return to top**](#ch3)

In September 2002, Bahrain implemented an Electronic Transactions law,
recognizing the validity of electronic transactions. In a push to use
this technological opening, the Ministry of Industry and Commerce has
implemented electronic government. Banks offer electronic banking and
the parastatal telecommunications company now accepts electronic
transactions for bill payments

In 2003, the Ministry of Commerce established a directorate for
electronic commerce to promote e-commerce services. The Directorate of
Electronic Commerce\'s services include:

-   Adopting the concept of \"internet for business\" in order to help\
    commercial institutions in Bahrain benefit from information and
    communication technology as a major tool for effectively competing
    in world markets;

-   Encouraging the private commercial sector to take up e-commerce as a
    delivery channel, through developing programs and providing
    consultancy services and guidance to help small and medium
    institutions make use of information technology and communication
    services.

E-commerce is on the rise in Bahrain where computer-literacy rates are
high and people recognize the commercial value of the Internet.
Bahrain\'s principal telecommunications company Batelco reports that
Internet accounts are increasing rapidly. Almost all government
ministries have launched e-commerce websites. The Government is also
under the process of integrating and implementing E-Government.

## Trade Promotion and Advertising [**Return to top**](#ch3)

Advertising approaches differ according to the market sector.
Extravagant product launches are becoming the norm. Consumer goods and
services advertising techniques include the full range of television,
radio, newspapers and magazines, internet, outdoor advertisements and
other approaches.

**Radio/TV/Cable**

There are three nationwide TV channels and two nationwide radio channels
in Bahrain: all of which are government channels. TV Channel 44 and 4
broadcast programs in the local language (Arabic) and Channel 55
broadcasts in English; the English radio-broadcasted on bandwidth 96.5
F.M. and Arabic is broadcasted 93.3 F.M.

Bahrain News Agency, Radio Bahrain, Bahrain Television

Ministry of Information

Chief Executive Officer

Tel: +(973) 17-686000

Fax: 17-681544

Webpage: <http://www.bahraintv.com/>

Bahrain News Agency

Tel: +(973) 17-689044

Fax: +(973) 17-683825

Webpage: <http://www.bahraintv.com/>

**Newspapers and Magazines**

Bahrain has several Arabic-language newspapers, the largest being Al
Ayam, Al Wasat, and Akhbar Al Khaleej. The primary business oriented
paper is Al Ayam newspaper's Economic supplement. There are two
English-language newspapers, the Gulf Daily News and the Bahrain
Tribune. Business-oriented magazines include Trade Arabia, Gulf
Construction, Gulf Industry, Oil and Gas Middle East, and Zawya.

**Arabic Language Newspapers**

***Akhbar Al Khaleej***

P.O. Box 5300

Manama, Kingdom of Bahrain

Tel: +(973) 17-620111

Fax: +(973) 17-621566

Website: <http://www.akhbar-alkhaleej.com/>

***Al-Ayam***

P.O. Box 3232

Manama, Kingdom of Bahrain

Tel: +(973) 17-727111

Fax: +(973) 17-729009

Website: <http://www.alayam.com/>

 

***Al-Wasat Newspaper***

P.O. Box 31110

Manama, Kingdom of Bahrain

Tel: +(973) 17-596999

Fax: +(973) 17-596900

Website: <http://www.alwasatnews.com/>

***Al-Meethaq Newspaper***

P.O. Box 15200

Manama, Kingdom of Bahrain

Tel: +(973) 17-877777

Fax: +(973) 17-784118

Website: [www.almeethaq.net](http://www.almeethaq.net/)

######## English Language Newspapers

***Gulf Daily News***

P.O. Box 5300

Manama, Bahrain

Tel: +(973) 17-620222

Fax: +(973) 17-622141

Website: <http://www.gulf-daily-news.com/>

***Bahrain Tribune***

P.O. Box 3232

Manama, Kingdom of Bahrain

Tel: +(973) 17-827111

+(973) 17-727111

Fax: +(973) 17-827222

Website: <http://www.bahraintribune.com/>

**Domestic Trade Fairs**

Domestic trade fairs can provide U.S. firms with an opportunity to
increase brand awareness, investment opportunities, and locate trade
partners.

Bahrain is keen in drawing exhibition and conference participants to
Bahrain and activating its role as a regional expo and conference hub.
Bahrain has one government-affiliated conference and exhibition
facility. Many hotel chains have conferencing and exhibiting capability.
For a listing of conferences and exhibitions, please visit the Bahrain
International Exhibition Center's (BIEC) webpage,
[http://www.bahrainexhibitions.com/](http://www.bahrainexhibitions.com./).

**Exhibiting facilities**

The Bahrain International Exhibition Center (BIEC) is a modern,
air-conditioned facility, featuring 14,000 square meters of internal
hall space and 50,000 square meters of total land area. There are also
comprehensive under-floor services and 10,000 square meters of space as
well as parking for 500 cars. The exhibition center has enhanced
Bahrain\'s position as a venue for trade shows and conferences in the
Gulf region. Bahrain is easily accessible by car via the King Fahad
Causeway from Dhahran, Saudi Arabia. Frequent air service is also
available from the other Gulf States, as well as from major European and
South Asian commercial centers.

**Bahrain International Exhibition Center (BIEC)**\
P.O. Box 11644\
Manama

Kingdom of Bahrain\
Tel: +(973) 17-550111\
Fax: +(973) 17-553447\
Website: <http://www.bahrainexhibitions.com/>

E-mail: biec@batelco.com.bh

**Conference Centers at Major Hotels**

Several major hotels also offer first-class facilities for conference
and exhibitions:

######### Hilton Bahrain Hotel

P.O. Box 1090

Manama

Kingdom of Bahrain\
Phone: +(973) 17-535000\
Fax: +(973) 17-532071\
Website <http://www.hilton.com/>

E-mail: rm_bahrain@hilton.com\
Location: 10 minutes drive from the airport and the Bahrain
International Exhibition Centre. Walking distance from Bab Al Bahrain
(downtown).\
Business Services: 250 Rooms, executive floor, business center with
phone, fax, computers, conference facilities, and a conference center
known as the Gilgamesh Ballroom.

  --------------------------------- --------- ----------- --------- -----------
  **Hilton Bahrain Hotel -- Summary                                 
  of Facilities and Capacities**                                    

  Function Rooms                    Theatre   Classroom   Banquet   Reception

  Gilgamesh Anteroom                120       80          100       125

  Gilgamesh A                       200       120         130       200

  Gilgamesh A and B                 500       300         350       500

  Gilgamesh A and B and Anteroom    550       380         450       600

  Um Nassan                         40        20          30        40

  Al Ghazal                         40        15          15        70

  Um Nassan and Al Ghazal           80        35          45        100

  Rooms 616 / 716                   20        12          16        20
  --------------------------------- --------- ----------- --------- -----------

######## Diplomat Radisson SAS 

P.O. Box 5243

Manama

Kingdom of Bahrain\
Phone: +(973) 17-531666\
Fax: +(973) 17-530843

Website: <http://www.diplomatrdsas.com.bh/>

E-mail: sales.diplomat@radissonsas.com\
Location: Business district (Diplomatic Area) in Manama.\
Business Services: 243 Rooms, an Executive Floor, business center.

  ------------------------- --------- ----------- ------------ ----------- --------- -----------
  **Diplomat Radisson SAS                                                            
  -- Summary of Facilities                                                           
  and Capacities**                                                                   

  Function Rooms            Theatre   Classroom   Conference   Boardroom   Banquet   Reception

  Grand Ambassador Suite 1  400       200         90           90          400       400

  Grand Ambassador Suite 2  250       100         50           50          250       250

  Grand Ambassador Suite 3  250       100         50           50          250       250

  Grand Ambassador Suite 4  250       100         50           50          200       250

  Grand Ambassador Suite    150       500         300          300         1100      1700
  Combined                                                                           

  Syndicate Rooms 1, 5, 6                         16           16                    

  Syndicate Rooms 3, 4, 5,  25        15          16           16          16        40
  6                                                                                  

  Syndicate Rooms 3, 4      50        30          32           32          50        70

  Eben Sina                 30        15          18           18          30        30

  Eben Al Nafis             20        18          18           18          25        30

  Eben Roshed               18        10          12           15          20        25
  ------------------------- --------- ----------- ------------ ----------- --------- -----------

**The Regency Intercontinental Bahrain**

P.O. Box 777

Manama

Kingdom of Bahrain\
Phone: +(973) 17-227777\
Fax: +(973) 17-229929

Website
[www.intercontinental.com/manama](http://www.intercontinental.com/manama/)\
E-mail bahrain@interconti.com

  ------------------------- --------- ----------- ------------ --------- -----------
  **Regency                                                              
  Intercontinental Hotel --                                              
  Summary of Faculties and                                               
  Capacities**                                                           

  Function Rooms            Theatre   Classroom   Conference   Banquet   Reception

  Al Riffa Ballroom Lounge  100       50          30           80        160

  Al Riffa Ballroom I       120       60          30           80        180

  Al Riffa Ballroom II      300       150         80           220       350

  Al Riffa Ballroom III     150       80          40           100       180

  Al Riffa Ballroom         670       340         180          480       870
  Combined                                                               

  Regents Room              40        35          25           40        60

  Hawar                     100       60          30           60        60

  Onaizah I                 40        30          25           12        40

  Onaizah II                20        20          12           30        30
  ------------------------- --------- ----------- ------------ --------- -----------

**Sheraton Bahrain Hotel**

6 Palace Avenue\
P.O. Box 30

Manama

Kingdom of Bahrain\
Telephone: +(973) 17-533533\
Fax: +(973) 17-534069\
Website: [www.sheraton.com/bahrain](http://www.sheraton.com/bahrain)

E-mail: sheraton@batelco.com.bh\
Business Services: Executive floor, fully equipped business center with
phone, fax, computers and conference facilities.

  ------------------- --------- ----------- ------------ -------- --------- -----------
  **Sheraton Bahrain                                                        
  Hotel -- Summary of                                                       
  Facilities and                                                            
  Capacities**                                                              

  Function Rooms      Theatre   Classroom   Conference   Buffet   Banquet   Reception

  Al Jasra Ballroom   800       400         100          500      600       800

  Al Taj Room A       278       148         48           156      180       278

  Al Taj Room B       442       224         60           250      300       350

  Al Taj Room A and B 705       376         90           376      470       705

  Budaiya Room        40        24          12           20       25        35

  Zallaq Room         74        50          24           50       60        75

  Sakhir Room         40        24          12           20       25        35

  Iwan Lounge         150       100         45                              200
  ------------------- --------- ----------- ------------ -------- --------- -----------

The Gulf Hotel Bahrain

The Gulf International Convention & Exhibition Centre

P.O. Box 580

Manama

Kingdom of Bahrain\
Phone: +(973) 17-713000\
Fax: +(973) 17-712088\
Website: <http://www.gulfhotelbahrain.com/>

E-mail: ghres@batelco.com.bh\
Location: 20 minutes from the airport, 10 minutes from Bab Al Bahrain
(downtown).\
Business Services: Two executive floors, 21 meeting rooms, business
center with phone, fax and computers and a conference center known as
the Gulf International Conference Center.

  --------------- --------------- -------------- --------------- ---------------- ------------ ------------- ---------------
  **GULF                                                                                                     
  INTERNATIONAL                                                                                              
  CONVENTION &                                                                                               
  EXHIBITION                                                                                                 
  CENTRE                                                                                                     
  - Summary of                                                                                               
  Facilities and                                                                                             
  Capacities**                                                                                               

  **Function      **Exhibitions 4 **Meetings**                                                               
  Rooms**         m2 stand**                                                                                 

                                  **Theatre**    **Classroom**   **Conference**   **Buffet**   **Banquet**   **Reception**

  Al Dana Hall 1  20              500            300             80               360          400           660

  Al Dana Hall 2  20              500            300             80               360          400           660

  Al Dana Hall 1  45              1000           600             120              700          810           1500
  and 2                                                                                                      

  Al Dana Hall 3  10              200            120             48               160          200           300

  Al Dana Hall 4  10              200            120             48               160          200           300

  Al Dana Hall 3  20              500            300             80               360          400           600
  and 4                                                                                                      

  Al Dana Hall 5                  120            80                               60           80            200

  Al Dana Hall    75              2200           1200            150              1130         1260          2500
  Combined                                                                                                   

  Al Dana Hall    90              2400           1300            150              1350         1500          3000
  Combined+                                                                                                  

  Al Amwaj                                                       14                                          

  Al Murjan 1                     60             36              20                                          75

  Al Murjan 2                     60             36              20                                          75

  Al Murjan 1 and                 120            80              40                                          150
  2                                                                                                          

  Al Mahara                                                      14                                          

  Lulu Suite                      20             18              10                                          25
  --------------- --------------- -------------- --------------- ---------------- ------------ ------------- ---------------

Crowne Plaza Bahrain

**Bahrain Conference Centre**\
P.O. Box 5831

Manama

Kingdom of Bahrain\
Telephone: +(973) 17-531122\
Fax: +(973) 17-530154\
Website: <http://www.crowneplaza-bahrain.com/>

E-mail: crowneplaza@batelco.com.bh\
Location: 10 minutes drive from the airport and three minutes from the
Museum. Situated in the heart and in the business district located in
Manama, most of the time it\'s referred as the Diplomatic Area.\
Business Services: Executive floor, business center known as the Bahrain
Conference Center.

+-----------------------+------+---------+----------+-------+--------+
| ####                  |      |         |          |       |        |
| **Crowne Plaza, Bahra |      |         |          |       |        |
| in- Summary of Facili |      |         |          |       |        |
| ties and Capacities** |      |         |          |       |        |
+-----------------------+------+---------+----------+-------+--------+
| **Function Rooms**    | **T  | **Clas  | **Boa    | *     | *      |
|                       | heat | sroom** | rdroom** | *Banq | *Recep |
|                       | re** |         |          | uet** | tion** |
+-----------------------+------+---------+----------+-------+--------+
| Banquet Hall A        | 170  | 90      | 40       | 100   | 200    |
+-----------------------+------+---------+----------+-------+--------+
| Banquet Hall B        | 170  | 90      | 40       | 100   | 200    |
+-----------------------+------+---------+----------+-------+--------+
| Banquet Hall C        | 500  | 250     | 90       | 300   | 500    |
+-----------------------+------+---------+----------+-------+--------+
| Banquet Hall D        | 600  | 300     | 100      | 500   | 700    |
+-----------------------+------+---------+----------+-------+--------+
| Banquet Hall A, B, C  | 1700 | 900     | 170      | 1200  | 2000   |
| and D                 |      |         |          |       |        |
+-----------------------+------+---------+----------+-------+--------+
| Board Room 1          |      |         | 20       | 20    |        |
+-----------------------+------+---------+----------+-------+--------+
| Board Room 2          | 60   |         | 40       | 30    | 100    |
+-----------------------+------+---------+----------+-------+--------+
| Board Room 3          | 50   |         | 30       | 20    | 75     |
+-----------------------+------+---------+----------+-------+--------+
| Meeting Room 4        | 20   | 12      | 10       |       |        |
+-----------------------+------+---------+----------+-------+--------+
| Meeting Room 5        | 20   | 12      | 10       |       |        |
+-----------------------+------+---------+----------+-------+--------+
| Meeting Room 6        | 50   | 30      | 24       |       |        |
+-----------------------+------+---------+----------+-------+--------+
| Meeting Room 7        | 50   | 30      | 24       |       |        |
+-----------------------+------+---------+----------+-------+--------+

**The Ritz-Carlton, Bahrain Hotel & Spa**\
P.O. Box 55577

Manama

Kingdom of Bahrain\
Telephone: +(973) 17-580000\
Fax: +(973) 17-580333\
Website: <http://www.ritzcarlton.com/>

E-mail: info@ritzcarlton.com.bh\
Location: 20 minutes from the airport, five minutes from Bab Al
Bahrain.\
Business Services: Executive Floor, business center with phone, fax and
computers, conference facilities.

  ------------------ ------------- --------------- ---------------- ------------ ------------- ---------------
  **The                                                                                        
  Ritz-Carlton,                                                                                
  Bahrain Hotel &                                                                              
  Spa - Summary of                                                                             
  Facilities and                                                                               
  Capacities**                                                                                 

  **Function Rooms** **Theatre**   **Classroom**   **Conference**   **Buffet**   **Banquet**   **Reception**

  Al Ghazal I        250           140             45               130          150           340

  Al Ghazal II       210           120             42               90           110           220

  Al Ghazal III      260           120             42               110          130           270

  Al Ghazal C        220           100             36               100          130           250

  Al Ghazal Combined                                                700          500           1200

  Al Noor            750           600                                                         750

  Board Room I       40            24              18                            24            50

  Board Room II      25            12              15                            16            25
  ------------------ ------------- --------------- ---------------- ------------ ------------- ---------------

**Movenpick Hotel**\
P.O. Box 24009\
Manama

Bahrain

Phone: +(973) 17-460000\
Fax: +(973) 17-460001

Website: <http://www.moevenpick-group.com/>

Location: As the only hotel on the island of Muharraq, is 10 minutes
from the city centre of the capital Manama.

Business Services: high-speed Wireless LAN, for fast cable-free Internet
access in all public areas and rooms.

  -------------- -------- --------------- -------- --------------- --------------
  Movenpick                                                        
  Hotel, Bahrain                                                   
  - Summary of                                                     
  Facilities and                                                   
  Capacities                                                       

  Function Rooms Number   Largest Seating Total    Boardroom       Video
                          Capacity        Space    Capacity        Conference
                                                                   Availability
                                                                   (Yes/No)

  Meeting Rooms  6        520             20 m2    8 person(s)     Yes

  Gawwas         1        14 person(s)    32 m2    14 person(s)    Yes
  Boardroom                                                        

  Hairat         1        20 person(s)    41 m2    N/A             Yes

  **Main         1        250 person(s)   147 m2   N/A             Yes
  prefunction                                                      
  area**                                                           

  **Moevenpick   1        520 person(s)   462 m2   100 person(s)   Yes
  Ballroom**                                                       

  **Pearl        1        16 person(s)    51 m2    16 person(s)    Yes
  Boardroom**                                                      

  **Side         1        100 person(s)   137 m2   N/A             Yes
  pre-function                                                     
  area**                                                           

  **Tawash**     1        20 person(s)    41 m2    N/A             Yes
  -------------- -------- --------------- -------- --------------- --------------

**Novotel**\
P.O. Box 11073\
Manama, Bahrain\
Tel: +(973) 17-298008\
Fax: +(973) 17-298338\
Website: <http://www.novotel.com/>\
E-mail: aldana@novotel-bahrain.com

Location: Located in the heart of Manama, close to the diplomatic area
and business centre. 5km away from the international airport.

Business Services: 4 meeting rooms.

**Organizers of International Trade Exhibitions:**

Most international trade exhibitions in Bahrain are organized by Arabian
Exhibition Management (AEM), Bahrain Convention and Exhibition Bureau,
and Reflections for Events and Exhibitions. Other trade exhibition
companies also operate in Bahrain.

Arabian Exhibition Management WLL (AEM)\
P.O. Box 20200\
Manama, Bahrain\
Tel: +(973) 17-550033\
Fax: +(973) 17-553288\
Website: <http://www.aeminfo.com.bh/>

E-mail: aeminfo@batelco.com.bh

Bahrain Convention & Exhibition Bureau (BCEB)

P.O. Box 11644

Manama\
Kingdom of Bahrain\
Phone: +(973) 17-558800\
Fax: +(973) 17-555513

Webpage:
[http://www.bahrainexhibitions.com](http://www.brahrainexhibitions.com/)\
E-mail: info@bahrainexhibitions.com

Reflections for Events & Exhibitions

P.O. Box 20377

Manama

Kingdom of Bahrain\
Tel.: +(973) 17-541141 

Fax: +(973) 17-541181

Website: [http://www.reflectionsbh.com](http://www.reflectionsbh.com/)\
E-mail: info@reflectionsbh.com

AIFG/International Fairs Group\
P.O. Box 5098\
Manama, Kingdom of Bahrain\
Tel: +(973) 17-244418\
Fax: +(973) 17-231600\
Website: [http://www.amadeusifg.com](http://www.amadeusifg.com/)\
Email: info@amadeusifg.com

Mice Management W.L.L.\
P.O. Box 20196\
Manama, Bahrain\
Tel: +(973) 17-534001\
Fax: +(973) 17-534002\
Website: <http://www.mice-management.com/>

Email: events@mice-management.com\
 

######### [Commercial Section, Bahrain's](http://www.buyusa.gov/bahrain) commercial services

**[BuyUSA Featured U.S.
Exporters](https://emenuapps.ita.doc.gov/eMenu/ProductServices/viewProductService.do?ID=3779)
(FUSE)**

**Cost:** \$50

**Delivery:** 1 workweek from receipt of payment and completed
registration form

**CS Contact:** [Nouf Jamsheer](mailto:Nouf.Jamsheer@mail.doc.gov)

A listing on <http://www.buyusa.gov/bahrain> gives U.S. exporters
targeted exposure to help find business partners in the Bahraini market.
The listing is in English and helps local importers source U.S.
export-ready companies. Participation cost is in multiples of \$50 with
a charge of \$200 for up to six product lines for a simultaneous
12-month period. Exposure on the Bahraini web site may also be offered
in conjunction with a trade promotion program for a limited period. Cost
for this exposure will be determined. Companies utilizing this service
will be listed under one of the standard categories in the Featured U.S.
Exporters directory. Each listing will contain the name of the company,
a description of the product, product line, or service on offer by the
U.S. exporter, and its objective in the Bahraini market, as well as an
image to accompany the listing, if appropriate, and a link to the
exporting company\'s website. Text to be provided by the client is
limited to a maximum of 150 words. The image must be in JPEG or GIF
format (maximum 200x200 pixels). The listings will encourage interested
local importers to contact the Commercial Section in Bahraini, who will
then forward the trade leads to the U.S. exporter.

Contact Person: Ms. Nouf Jamsheer, Commercial Specialist, Telephone:
+(973) 17-242700, Fax: +(973) 17-256717, E-mail:
[JamsheerN@state.gov](../JamsheerN@state.gov) and
[Nouf.Jamsheer@mail.doc.gov](../Nouf.Jamsheer@mail.doc.gov), Web site:
<http://www.buyusa.gov/bahrain>.

**BuyUSA.gov Business Service Provider**

[**Business Service
Provider**](https://emenuapps.ita.doc.gov/eMenu/ProductServices/viewProductService.do?ID=3778)
(BSP)

**Cost:** \$250

**Delivery:** Within one business week from receipt of payment.

**CS Contact:** [Nouf Jamsheer](mailto:Nouf.Jamsheer@mail.doc.gov)

Opportunity for U.S. companies providing services and sometimes
products, to gain exposure through an official U.S. Department of
Commerce focusing mainly on the Bahraini market and surrounding
countries. Average time for a \"single company promotion\" on the site
is 12 months. Exposure on the Bahraini web-site may also be offered in
conjunction with a trade promotion program for a limited period. Cost
for this exposure will be determined. Payment received in local currency
(Bahraini Dinars) for a 12 month period will be B.D. 100. A copy of the
application form is available on our office web-site
(www.buyusa.gov/bahrain) for those individuals/organizations who are
interested in being considered for this service.

Contact Person: Ms. Nouf Jamsheer, Commercial Specialist, Telephone:
+(973) 17-242700, Fax: +(973) 17-256717, E-mail:
[JamsheerN@state.gov](../JamsheerN@state.gov) and
[Nouf.Jamsheer@mail.doc.gov](../Nouf.Jamsheer@mail.doc.gov), Web site:
<http://www.buyusa.gov/bahrain>.

**Single Company Promotion**

**Cost:** Cost varies depending on the services required generally
\$1000-\$1500 (plus extra expenses incurred)

**Delivery:** Six week after receipt of payment

**CS Contact:** [Nouf Jamsheer](mailto:Nouf.Jamsheer@mail.doc.gov)

Assisting a US company organize and host a seminar/presentation to
launch/promote its products/services. Service would include organizing
logistics including helping client obtain preferential rates at local
venues, identifying prospective clients and sending invitations. Service
is tailored to the specific needs of the US Company.

Contact Person: Ms. Nouf Jamsheer, Commercial Specialist, Telephone:
+(973) 17-242700, Fax: +(973) 17-256717, E-mail:
[JamsheerN@state.gov](../JamsheerN@state.gov) and
[Nouf.Jamsheer@mail.doc.gov](../Nouf.Jamsheer@mail.doc.gov), Web site:
<http://www.buyusa.gov/bahrain>.

## Pricing [**Return to top**](#ch3)

Shipping generally adds considerably to the cost of items manufactured
in the U.S., which already face stiff competition from European and
Asian suppliers. This disadvantage is periodically counterbalanced by
exchange rate shifts between the dollar and European and Asian
currencies. The average importer markup on food products is 10-15
percent. Retail food prices are generally 25-30 percent above import
prices.

Hard bargaining is common in the local souks of Manama and Muharraq,
where buyers usually want a discount and vendors inflate their initial
offers accordingly.

## Sales Service/Customer Support [**Return to top**](#ch3)

After-sales service directly affects product reputation. A good
agent/distributor relationship to facilitate quality service is crucial
to success in this market. Opening warehouses and after-sales offices in
the Gulf to dispatch goods efficiently can help enlarge the client base.
Agents who offer superior after-sales service have a competitive
advantage over the medium and long term.

## Protecting Your Intellectual Property [**Return to top**](#ch3)

The U.S.-Bahrain FTA commits Bahrain to enforce world-class IPR
protection. Revised legislation to implement Bahrain's obligations under
the TRIPS Agreement is currently under review. Bahrain is also in the
process of joining the WIPO Copyright Treaty and the WIPO Performances
and Phonograms Treaty. The government has made dramatic progress in
reducing copyright piracy, and there are no reports of significant
violations of U.S. patents and trademarks in Bahrain. The government's
copyright enforcement campaign began late 1997 and was based on
inspections, closures, and improved public awareness. The campaign
targeted the video, audio and software businesses with impressive
results. The commercially pirated video and audio markets have been
virtually eliminated. However, software piracy, which has shifted from
retail to end-user violations, remains problematic.

Bahrain's current legal system adequately protects and facilitates
acquisition and disposition of intellectual property rights (IPR). The
concept of a mortgage exists, and there is a recognized and reliable
system of recording such security interests. However, there is currently
no mortgage law that guarantees lenders the right to repossess property
in the case of mortgage non-repayment.

There are no technology transfer requirements that force firms to share
or divulge technology to a domestic partner through compulsory
licensing, nor are firms forced to commit to research and development
activities in Bahrain.

In recognition of improved IPR protection, Bahrain was removed from the
U.S. Special 301 Watch List in 1999, and has remained off the list
since. The government has made progress in reducing copyright piracy.
Patent and trademark protection has always been strong, and there have
been no recent reports of significant violations of U.S. patents and
trademarks in Bahrain. Software piracy has been much more difficult to
eradicate. Bahrain signed the Berne Convention for the Protection of
Literary and Artistic Works and the Paris Convention for the Protection
of Industrial Property in 1996. Although Bahrain argued that it was
TRIPS-compliant based on a constitutional clause giving international
agreements precedence over local law, the WTO continues to seek legal
revisions. Bahrain has drafted, and in the process of passing through
the National Assembly (both upper and lower houses), new laws related to
intellectual property to bring Bahrain\'s local laws into compliance
with its current TRIPS, WIPO, Berne, and Paris Convention commitments,
and to position Bahrain to join the Nice Agreement, Vienna Agreement,
Patent Cooperation Treaty, Trademark Law Treaty, Madrid Agreement,
Budapest Treaty, WIPO Copyright Treaty, WIPO Performances and Phonograms
Treaty, and the Rome Convention.

The eight new IPR laws that have been drafted to bring Bahrain\'s local
laws into compliance with its international obligations through WIPO and
are awaiting legislative approval pertain to:

-   trade secrets;

-   copyright and related rights;

-   designs of integrated circuits;

-   geographic indicators;

-   individual drawings and designs;

-   patents and utility models;

-   plant varieties;

-   trademarks.

The Trade Secrets law was passed by the legislative branch and signed
into effect by the King in July 2003.

There are no technology transfer requirements that force firms to share
or divulge technology to a domestic partner through compulsory
licensing, nor are firms forced to commit to research and development
activities in Bahrain.

**Filing Trademarks, Patents & Design through the Ministry of Industry
and Commerce**

The Ministry of Industry and Commerce recently developed an online
patent, trademark, and design registration service. Please refer to the
information on registering patents, trademarks, and designs in Bahrain
on the [Ministry of Industry and
Commerce](http://www.commerce.gov.bh/)'s website.

## Due Diligence [**Return to top**](#ch3)

Establishing a business in Bahrain, whether in the services, sales, or
manufacturing sector, is best accomplished after the following:

-   Carefully researching Bahrain's market, economic, and social
    systems;

-   Carefully choosing a Bahraini partner/advisor/consultant with strong
    affiliations in the local economy, as well as knowledge of and
    access to the country\'s commercial bureaucracy and legal system;

-   Conducting due diligence in establishing a business relationship;

-   Requiring confirmed Letters of Credit for purchases, especially in
    the initial stages of a business relationship.

Bahrain is very small by size and the business community is highly
interconnected. Establishing and developing contacts is key in Bahraini
society and economy.

[**Commercial Section, Bahrain's commercial
services:**](http://www.buyusa.gov/bahrain)

**International Company Profile** **(ICP)**

**Cost:** \$550

**Delivery:** 20 business days from receipt of payment

**CS Contact:** [Nouf Jamsheer](mailto:Nouf.Jamsheer@mail.doc.gov)

Time: 20 business days from receipt of payment.

Description: The local representative for Dun & Bradstreet will prepare
a Business Information Report, which will include full details on what
the local company does, where it is located, who it is owned and run by,
how it is paying its bills, and assesses the level of risk you take in
doing business with them. In conjunction with this report, the post
interviews the local company and creates a report, which includes all of
the above plus any additional information, which is known about the
local company and/or its principals.

Contact Person: Ms. Nouf Jamsheer, Commercial Specialist, Telephone:
(973) 17-242700, Fax: (973) 17-256717, E-mail:
[JamsheerN@state.gov](../JamsheerN@state.gov) and
[Nouf.Jamsheer@mail.doc.gov](../Nouf.Jamsheer@mail.doc.gov), Web site:
<http://www.buyusa.gov/bahrain>.

## Local Professional Services [**Return to top**](#ch3)

For a complete list of service providers, please contact the [U.S.
Embassy's Commercial Section, Bahrain.](http://www.buyusa.gov/bahrain)

**[Commercial Section, Bahrain's commercial
services](http://www.buyusa.gov/bahrain):**

**Screened/Unscreened Contact Lists**

**Cost:** \$300.00

**Delivery:** 15 working days from receipt of payment

**CS Contact:** [Nouf Jamsheer](mailto:Nouf.Jamsheer@mail.doc.gov)

Screened Contact Lists: Industry Specific Screened Contact List of
companies in Bahrain. Includes basic contact information, company names,
addresses, telephone, fax numbers, e-mail, related industries, business
type (legal type), Commercial Registration Number (CR) if available,
business size, business affiliates (represented foreign firms and/or
agents/distributors) number of employees, revenue (if available) and
year of establishment. Mailing charges via ordinary or courier mail will
be additional. If total work days required exceeds fifteen, estimated
delivery will be provided before acceptance of the job is undertaken. If
more than one sector is requested, costs as follows: two sectors \$400,
three sectors \$400 etc.

Contact Person: Ms. Nouf Jamsheer, Commercial Specialist, Telephone:
+(973) 17-242700, Fax: (973) 17-256717, E-mail:
[JamsheerN@state.gov](../JamsheerN@state.gov) and
[Nouf.Jamsheer@mail.doc.gov](../Nouf.Jamsheer@mail.doc.gov), Web site:
<http://www.buyusa.gov/bahrain>.

**Contact Lists**

**Cost:** \$150.00

**Delivery:** 7 work days from receipt of payment

**CS Contact:** [Nouf Jamsheer](mailto:Nouf.Jamsheer@mail.doc.gov)

Unscreened Contact Lists: General Industry Specific Contact List of
companies in Bahrain. Includes basic contact information, company names,
addresses, telephone, fax numbers, and e-mail. Mailing charges via
ordinary or courier mail will be additional. If total work days required
exceeds seven, estimated delivery will be provided before acceptance of
the job is undertaken. If more than one sector is requested, the costs
are as follows: cost for two is \$200, three \$250, four \$300 etc.

Contact Person: Ms. Nouf Jamsheer, Commercial Specialist, Telephone:
(973) 17-242700, Fax: (973) 17-256717, E-mail:
[JamsheerN@state.gov](../JamsheerN@state.gov) and
[Nouf.Jamsheer@mail.doc.gov](../Nouf.Jamsheer@mail.doc.gov), Web site:
<http://www.buyusa.gov/bahrain>.

## Web Resources [**Return to top**](#ch3)

Ministry of Commerce (MOH)

<http://www.commerce.gov.bh/>

Bahrain Investors Center (BIC)

[http://www.bi.bh](#_Hlk95630648	1,39445,39461,94,,http://www.bi.bh)

Ministry of Industry (MOI)

<http://www.industry.gov.bh/>

Bahrain Tenders Board

<http://www.bahraintenders.gov.bh/>

Bahrain Television (BTV)

<http://www.bahraintv.com/>

Akhbar Al Khaleej Newspaper

<http://www.akhbar-alkhaleej.com/>

Al Ayam Newspaper

<http://www.alayam.com/>

Al Wasat Newspaper

<http://www.alwasatnews.com/>

Al Meethaq Newspaper

[www.almeethaq.net](http://www.almeethaq.net/)

Gulf Daily News (GDN)

<http://www.gulf-daily-news.com/>

Bahrain Tribune (BT)

<http://www.bahraintribune.com/>

Bahrain Convention and Exhibition Center (BCEB)

<http://www.bahrainexhibitions.com/>

Arabian Exhibition Management

<http://www.aeminfo.com.bh/>

Reflections

[http://www.reflectionsbh.com](http://www.reflectionsbh.com/)

AIFG/International Fairs Group

[http://www.amadeusifg.com](http://www.amadeusifg.com/)

Mice Management W.L.L.

<http://www.mice-management.com/>

Hilton Hotel

<http://www.hilton.com/>

Diplomat Radisson SAS Hotel

<http://www.diplomatrdsas.com.bh/>

Regency Intercontinental Hotel

[www.intercontinental.com/manama](http://www.intercontinental.com/manama/)

Sheraton Hotel

<http://www.sheraton.com/bahrain>

Gulf Hotel

<http://www.gulfhotelbahrain.com/>

Crowne Plaza Hotel

<http://www.crowneplaza-bahrain.com/>

Ritz Carlton Hotel

<http://www.ritzcarlton.com/>

Movenpick Hotel

<http://www.moevenpick-group.com/>

Novotel Hotel

<http://www.novotel.com/>

Commercial Section, U.S. Embassy Bahrain

<http://www.buyusa.gov/bahrain>

[Return to table of contents](#doing-business-in-bahrain)

[[]{#ch4 .anchor}Return to table of
contents](#doing-business-in-bahrain)

# Chapter 4: Leading Sectors for U.S. Export and Investment

# [[[]{#_Commercial_Sectors .anchor}]{#__RefHeading___Toc96013937 .anchor}Commercial Sectors](#_Commercial_Sectors)

-   [Motor Vehicles and Vehicle
    Parts](#motor-vehicles-and-vehicle-parts)

-   [Medical Equipment/Healthcare](#medical-equipmenthealthcare)

-   [Air Conditioning and Refrigeration
    Equipment](#air-conditioning-and-refrigiration-equipment)

-   [Computers and Peripherals](#leadinsector4)

-   [Telecommunications](#overview-return-to-top-4)

-   [Financial Services](#leadingsector6)

-   [Education and Training](#education-and-training)

-   [Electrical Power](#electrical-power)

-   [Water Desalination](#_Water_Desalination)

-   [Construction](#construction)

# [Agriculture Sectors](#agricultural-sectors-return-to-top)

-   [Frozen/Chilled Beef](#_Frozen/Chilled_Beef_)

-   [Meat Poultry](#poultry-meat-return-to-top)

**Note:**\
\*All statistics provided are unofficial estimates based on input from
Bahrain Central Statistics Organization, U.S. International Trade
Commission, and industry sources.\
\*\*All calculations were made using the (fixed) exchange rate of \$1 =
BD .377 or\
BD 1 = \$2.65.\
\*\*\*All market values are listed in \$ millions.

## Motor Vehicles and Vehicle Parts

### Overview [**Return to top**](#ch4)

+-----------------------+--------------+--------------+--------------+
| **Motor Vehicles and  | ***2001***   | ***2002***   | ***2003***   |
| Vehicle Parts**       |              |              |              |
|                       | **           | **           | ***(         |
|                       | *(Actual)*** | *(Actual)*** | Estimate)*** |
+-----------------------+--------------+--------------+--------------+
| Total Market Size     | 287          | 434          | 469          |
+-----------------------+--------------+--------------+--------------+
| Total Local           | 0            | 0            | 0            |
| Production            |              |              |              |
+-----------------------+--------------+--------------+--------------+
| Total Exports         | 0            | 0            | 0            |
+-----------------------+--------------+--------------+--------------+
| Total Imports         | 287          | 434          | 469          |
+-----------------------+--------------+--------------+--------------+
| Imports From U.S.     | 23.2         | 34.2         | 44.4         |
+-----------------------+--------------+--------------+--------------+

\*Numbers represent \$ millions Source: Bahrain Central Informatics
Organization

The market for American passenger cars, especially for larger model
vehicles like mini-vans and SUVs, continues to grow. Compact and economy
models are also popular.

### Best Products/Services [**Return to top**](#ch4)

It is expected that U.S. automobile exports to Bahrain will increase in
2004. U.S. car dealerships in Bahrain attribute increased sales to the
weakened value of the dollar.

The U.S. dollar value has reduced the cost of U.S. manufactured vehicles
in relation to European models. The overall market for U.S.-made auto
parts is declining due to Asian and Saudi competition. However, there
are opportunities in niche markets (brake pads, oil filters) and auto
accessories (wax, lubricants) where American products are preferred for
their high quality.

### Opportunities [**Return to top**](#ch4)

Bahrainis value U.S. cars for their safety, comfort, interior design,
and capacity to accommodate large families. U.S. car sales also benefit
from an overall expanding market. According to the Bahrain General
Directorate of Traffic, 251,000 vehicles were registered in Bahrain in
2002, and registration is increasing 5.3 percent per year on average,
suggesting an estimated 264,000 vehicle registrations in 2003.

### Resources [**Return to top**](#ch4)

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

## Medical Equipment/Healthcare

### Overview [**Return to top**](#ch4)

+-----------------------+--------------+--------------+--------------+
| **Medical Equipment** | ***2001***   | ***2002***   | ***2003***   |
|                       |              |              |              |
|                       | ***(Actual)  | ***(Actual)  | *            |
|                       | \****        | \****        | **(Estimate) |
|                       |              |              | \****        |
+-----------------------+--------------+--------------+--------------+
| Total Market Size     | 38           | 47           | 57           |
+-----------------------+--------------+--------------+--------------+
| Total Local           | 0            | 0            | 0            |
| Production            |              |              |              |
+-----------------------+--------------+--------------+--------------+
| Total Exports         | 0            | 0            | 0            |
+-----------------------+--------------+--------------+--------------+
| Total Imports         | 38           | 47           | 57           |
+-----------------------+--------------+--------------+--------------+
| Imports from U.S.     | 7.8          | 8.6          | 9.4          |
+-----------------------+--------------+--------------+--------------+

\*In \$ millions Source: Bahrain Central Informatics Organization

Bahrain has a modern health system. All Bahrainis receive free state
health care. Most companies offer their expatriate workers some sort of
health coverage, either through insurance companies, in which case rates
are negotiable, or through arrangements with one or more of the local
private hospitals. There is a \$8 fee for expatriates attending an
emergency clinic in a government hospital. In 2003, Bahrain's health
services sector showed significant growth, which is likely to continue.
Work begun on the construction of the \$80 million King Hamad Hospital
in Muharraq, the expansion of the Joslin Diabetes Center, and the
establishment of other clinics in late 2004. The Government of Bahrain
encourages the private sector to enter the health care market and thus
share the cost of services. It is also drawing up plans to attract
international hospitals in order to promote health tourism.

### Best Prospects/Services [**Return to top**](#ch4)

Current plans for the health services sector include the construction of
a third large public hospital, the King Hamad Hospital in Muharraq,
where construction on the project has already started. The Royal College
of Surgeons will use the medical facilities as a learning hospital. In
the private sector, the Boston-based Joslin Diabetes Center (JDC)
constructed its first facility outside the U.S. in Bahrain in 2003. Due
to increased demand for diabetes treatment in Bahrain and the Gulf, in
2004, JDC announced plans to expand the existing facility with an
additional building. In 2002, a \$45 million private hospital, the
Bahrain Specialist Hospital (BSH), contributed to the growth in the
country's private medical services with the establishment of the Ibn Al
Nafees Hospital.

### Opportunities [**Return to top**](#ch4)

In 2002, the largest hospital in Bahrain -- the state-run Sulmaniya
Medical Complex -- spent \$3.5 million to replace its medical equipment.
It is looking to replace patient vital-sign monitors, infant incubators,
ventilators, infusion pumps, and also to acquire a deep X-ray therapy
machine.

In a step towards reducing the load on government health services, the
Ministry of Health (MOH) has also announced that the upper house (the
Shura Council) of the legislative branch, or National Assembly, has
proposed a draft legislation that introduces compulsory health insurance
for non-Bahrainis. The current statistical MOH figures indicate that
only 10 percent of Bahrain's patients receive private treatment. The MOH
has recognized the urgency of investments in the health sector is
planning to establish a liaison office, dedicated to attract investment
in the health sector.

MOH officials recently announced that the government might start
outsourcing certain jobs, including the management of both medical and
non-medical services in the \$80 million King Hamad Hospital, expected
to complete in 2007. The MOH has also identified areas for investment,
which include: the pharmaceutical industry, drug packaging and
distribution, health complementary services (ex. producing of syringes),
health support services, health resorts, health education and training,
medical research centers, information technology (which includes the
MOH's E-health), and biotechnology.

### Resources [**Return to top**](#ch4)

Ministry of Health (MOH)

[www.moh.gov.bh](http://www.moh.gov.bh/)

Bahrain's Economic Development Board (EDB)

[www.bahrainedb.com](http://www.bahrainedb.com/)

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

## Air Conditioning and Refrigiration Equipment

### Overview [**Return to top**](#ch4)

+-----------------------+--------------+--------------+--------------+
| **AC/Refrigeration**  | ***2001***   | ***2002***   | ***2003***   |
|                       |              |              |              |
| # Equipment           | ***(         | ***(         | ***(Es       |
|                       | Actual)\**** | Actual)\**** | timate)\**** |
+-----------------------+--------------+--------------+--------------+
| Total Market Size     | 37           | 41           | 48           |
+-----------------------+--------------+--------------+--------------+
| Total Local           | 0            | 0            | 0            |
| Production            |              |              |              |
+-----------------------+--------------+--------------+--------------+
| Total Exports         | 0            | 0            | 0            |
+-----------------------+--------------+--------------+--------------+
| Total Imports         | 37           | 41           | 48           |
+-----------------------+--------------+--------------+--------------+
| Imports from U.S.     | 4.7          | 6.1          | 7.7          |
+-----------------------+--------------+--------------+--------------+

\*In USD millions Source: Bahrain Central Informatics Organization

Bahrain\'s climate requires air conditioning most of the year due to
high temperatures and high humidity. Air conditioning equipment breaks
down frequently as a result of constant use and lack of maintenance.

### Best Prospects/Services [**Return to top**](#ch4)

The market for air conditioning and refrigeration equipment is strong,
rising from \$ 37 million in 2001 to \$41 million in 2002. Sales for
units are also up. Leading American brands, highly regarded for their
reliability, have traditionally done well in Bahrain.

### Opportunities [**Return to top**](#ch4)

A construction boom is currently underway in residential housing and
commercial real estate, including several major hotel/resort projects.
It is estimated that U.S. sales in this sector will increase by as much
as 30 to 35 percent.

### Resources [**Return to top**](#ch4)

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

## Computers and Peripherals

### Overview [**Return to top**](#ch4)

Bahrain has focused its efforts on the entry of new private firms in
specific prospective growth sectors, which includes the information and
communications technology service sector. Bahrain has been actively
attracting international companies in the information technology sector
to invest in Bahrain, with a long-term vision of the formation of an
information technology hub.

### Best Prospects/Services [**Return to top**](#ch4)

Internet use is expanding in Bahrain. The Government launched an
E-Government initiative, and the electronic-based technology has
overwhelmingly been accepted as an important tool of effective business
strategy and good governance.

### Opportunities [**Return to top**](#ch4)

The GOB is revamping the Kingdom's information technology
infrastructure. Almost all Ministries have upgraded, or are upgrading
their e-services. Microsoft and BDO Jawad Habib, a Bahrain-based
consultancy firms, have won the contract to install and run Bahrain's
E-Investor Project. A \$6.89 million contract was also signed to take
Bahrain\'s government schools into cyber space, part of the King's
Future Schools' project. Government schools throughout Bahrain will be
using Macs to help children keep up with the electronic age. The
contract for the deal was signed between the Ministry of

Education (MOE), Apple Center and the Integrated Technology Group (ITG).
Apple Center will be responsible for providing, installing and operating
the electronic system at all government schools of all education stages,
in addition to training teachers on its uses. The five-year agreement,
which ends in July 2009, aims at expanding the information technology
system at all stages of government education. The Ministry of Education
is considering implementing an extension of the project that will cover
the Kingdom's only public and medical universities.

King Hamad Future Schools' project is a joint program between the
Ministry of Education and UNESCO aimed to develop the Ministry of
Education's current knowledge-based curriculum to a knowledge-based
economy or K-economy curriculum.

### Resources [**Return to top**](#ch4)

Government of Bahrain (GOB)

[www.bahrain.gov.bh](http://www.bahrain.gov.bh/)

Ministry of Commerce (MOC)

[www.commerce.gov.bh](http://www.commerce.gov.bh/)

Ministry of Education (MOE)

[www.education.gov.bh](http://www.education.gov.bh/)

Ministry of Health (MOH)

<http://www.moh.gov.bh/>

Bahrain's Economic Development Board (EDB)

<http://www.bahrainedb.com/>

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

## Telecommunications

### Overview [**Return to top**](#ch4)

The telecommunications sector was the first key sector to be liberalized
in Bahrain following the government\'s announced interest in opening
traditionally government-controlled industries. The Telecommunications
Regulatory Authority (TRA), established in late 2002, awarded a mobile
telecommunications services license to MTC-Vodafone, thus ending the
monopoly of Bahrain\'s telecom services provider, Batelco. The license
was awarded under the Telecommunications Law, which took effect January
2003.

### Best Prospects/Services [**Return to top**](#ch4)

Telecommunications liberalization also extended to paging services, very
small aperture terminal (VSAT), public access mobile radio services,
international telecommunications facilities, international
telecommunications services, national fixed services, internet service
provider (ISP) and value-added services license following the full
liberalization of the sector on July 1, 2004.

### Opportunities [**Return to top**](#ch4)

The TRA most recently announced the provision of three International
Telecommunications Facility licenses (IFLs), five International
Telecommunications Services Licenses (ISLs), five VSAT licenses, fifteen
value-added Services (VAS) \"Class\" licenses and eight Internet Service
Provider (ISP) licenses.

According to the Bahrain Monetary Agency (BMA), in 2003 the number of
mobile phone users reached 412,000 up from 390,000 the previous year,
and representing a growth of 5.6 percent.

Over 78 percent of Bahrain\'s 689,418 residents are mobile phone users,
suggesting one of the highest penetration rates in the Middle East. In
2003, Batelco had 151,000 registered Internet subscribers; personal
users accounted for 70 percent and business users 30 percent of the
total Internet market.

### Resources [**Return to top**](#ch4)

Telecommunication Regulatory Authority (TRA)

<http://www.tra.org.bh/>

Ministry of Transportation (MOT)

(covers public transportation, telecommunications, postal services, and
civil aviation )

[www.transportation.gov.bh](http://www.transportation.gov.bh/)

Bahrain Internet Exchange (BIX)

[www.bix.bh](http://www.bix.bh/)

Bahrain Monetary Agency (BMA)

[www.bma.gov.bh](http://www.bma.gov.bh/)

Bahrain Economic Development Board (EDB)

<http://www.bahrainedb.com/>

Bahrain Telecommunications (Batelco)

[www.batelco.com](http://www.batelco.com/)

MTC-Vodafone Bahrain

<http://www.mtc-vodafone.com.bh/>

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

## Financial Services

### Overview [**Return to top**](#ch4)

Bahrain is a principal financial services hub in the Middle East
(including Islamic Banking). Legal, regulatory, and accounting systems
in the financial sector (onshore and offshore) are transparent and
consistent with international norms. International financial
institutions operate in Bahrain, both internationally and domestically,
without impediments.

The Bahrain Monetary Agency (BMA), Bahrain's central bank, regulates the
banking sector under the provisions of the BMA law (Decree Law No. 23 of
1973). In May 2002, the Government of Bahrain announced that regulatory
responsibility for the insurance sector and stock exchange would move to
the BMA. This move was completed in late 2002.

### Best Products/Services [**Return to top**](#ch4)

Bahrain\'s attraction as a financial center is based on its established
offshore facilities, free foreign exchange movement, tax-free status,
stable Bahraini Dinar-USD foreign exchange rate, established insurance
sector, modern telecommunications systems, and prime geographical
location among the GCC countries*.* The financial sector has established
itself as a key employment generator for the local population.

In March 2004, in an effort to stimulate the insurance industry and
reinforce Bahrain's position as a major insurance center in the Middle
East, the BMA lifted the requirement that foreign insurance brokers and
loss adjusters must have a local partner in order to operate. These
firms, which were previously required to have at least 51 percent
Bahraini-ownership, are now permitted to operate with 100 percent
foreign-ownership. The BMA is holding consultations on further reform in
areas such as captive insurance, solvency, business conduct, risk
management and financial crime, enforcement, BMA reporting and public
disclosure, intermediaries, and Islamic insurance.

### Opportunities [**Return to top**](#ch4)

Bahrain has promoted itself as an international financial center in the
Gulf region. It hosts 367 diverse financial institution, including 197
banks, of which 51 are offshore banking unites (OBUs); 37 investment
banks; and 25 commercial banks, of which 17 are foreign owned. In
addition, there are 29 representative offices of international banks, 21
moneychangers and money brokers, and several other investment
institutions, including 84 insurance companies. In addition, Bahrain is
also a leading Islamic finance center in the region. The sector has
grown considerably since the licensing of the first Islamic bank in
1979. Bahrain has 28 Islamic banks and financial institutions.

Seventeen new licenses were issued in 2004: one investment bank, four
offshore banking units, one full commercial bank, two investment
advisory brokers, two financial services ancillary service providers,
three representative offices, one money exchange unit and three Islamic
banking and financial institutions.

Bahrain\'s underdeveloped insurance market possesses significant profit
potential for investors. Total insurance premiums for companies
operating in Bahrain increased 16.1 percent to \$209.5 million, up from
\$180 million in 2002. As of year-end 2003, the industry included 162
companies, which, compared to 149 in 2002, represents a growth of 8.7
percent. 2004 data is yet to be released.

The Government of Bahrain (GOB) has identified Islamic banking as one of
the main economic growth areas in the coming five years. Islamic banking
principles are similar to those of conventional banking, with the
exception that Islamic banks must conform to Sharia, or Islamic law.
Islamic finance prohibits charging interest for the use of money, and
disallows dealing in certain commodities. Islamic banking falls under
four main categories:

-   Murabiha: cost-plus financing -- i.e., buying a product from a
    supplier and selling it to a customer for a profit;

-   Musharraka: a profit sharing system that is similar to equity
    participation;

-   Ijara: leasing;

-   Istisna: the financing of construction or manufacturing.

Islamic banking attracts investors because of its profit potential, as
well as its religious and ethical approach. While the sector is still
small, it has registered strong continual growth despite regional
uncertainties that hindered growth in conventional banking. The Crown
Prince and other government officials have voiced Bahrain\'s commitment
to developing the sector further.

### Resources [**Return to top**](#ch4)

Bahrain Monetary Agency (BMA)

[www.bma.gov.bh](http://www.bma.gov.bh/)

Ministry of Finance (MOF)

[www.mofne.gov.bh](http://www.mofne.gov.bh/)

Bahrain Economic Development Board (EDB)

<http://www.bahrainedb.com/>

Bahrain Convention and Exhibition Bureau (BCEB)

[www.bahrainexhibitions.com](http://www.bahrainexhibitions.com/)

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

For more information, please contact the Commercial Section, at the U.S.
Embassy in Bahrain.

## Education and Training

### Overview [**Return to top**](#ch4)

Regionally, Bahrain has always been a pioneer in the field of education,
dating back to 1919 when it was the first country in the Gulf to
establish a system of formal education. In 2003, Bahrain had a 92.5
percent literacy rate among Bahraini males and an 83 percent literacy
rate among females, yielding a national literacy rate of 87.7 percent,
the highest in the region. The United Nation Development Program's
(UNDP) Human Development Report for 2004 reported Bahrain as the most
developed Arab state with a literacy rate of 88.5 percent in 2004,
higher than the GCC literacy rate of 84.3 percent. The issue of
education has been crucial for Bahrain since independence. State
spending on education is \$686.3 million, representing 11 percent of the
entire \$6.22 billion state budget for 2003-2004. Ministry of Education
employees account for approximately 35 percent of all government
employees.

Rising demand has led to deficiencies in the state school system. Most
parents who can afford to do so send their children to private schools.
A U.S. Department of Defense-affiliated school and a number of private
schools offer education in English with an American-style curriculum.

Bahrain is home to two public universities and a number of private
universities including the Royal College of Surgeons, New York Institute
of Technology (NYIT), Open University, AMA International, and a number
of educational institutions associated with the Bahrain Institute of
Banking and Finance (BIBF) (see Chapter 6: U.S. Investments in Bahrain).
Bahrain has a wide range of public and private training centers that
concentrate on the technical, financial and tourism sectors.

### Best Products/Services [**Return to top**](#ch4)

Growth in the education sector is driven primarily by the establishment
of new private universities, which the Government supports in order to
promote private higher education in Bahrain.

The Crown Prince and BDF Commander-in-Chief launched a national reform
initiative in 2004 that is aimed at creating a new economic, labor,
education and training vision for the Kingdom. The Government of Bahrain
is seeking to establish Bahrain as a regional center for human resource
development. Bahrain has over 50 training institutes that offer training
in a variety of areas such as hospitality, information technology,
business studies, English language studies, and banking.
Specialist-training institutions include the Gulf College of Hospitality
and Tourism, the Bahrain International College of Health & Beauty, the
Regional Institute of Advertising & Marketing, and the Bahrain Institute
of Banking & Finance. Major training institutes include the Bahrain
Institute for Banking and Finance (BIBF), Bahrain Training Institute
(BTI), KPMG, and the British Council.

### Opportunities [**Return to top**](#ch4)

The Government of Bahrain (GOB) is taking the initiative to promote
Bahrain as a regional education and training hub, since the educational
and vocational training curricula have been recently criticized recently
for not adequately preparing Bahrainis for the workforce. The government
is making concerted efforts to turn this situation around. As a part of
this initiative the Ministry of Labor (MOL) is actively encouraging
international education and training organizations to set up bases in
Bahrain. With a total investment of approximately \$50 million, four new
private universities have opened since late 2002. Another new university
for women is expected to open in late 2005. The high growth in private
education can be attributed to several factors, including: an increased
number of full-time working adults seeking part-time internationally
accredited degrees, private businesses looking for specialized courses
for their employees, and greater demand for private education from
neighboring countries like Saudi Arabia. Terrorist incidents in Saudi
Arabia during the first two quarters of 2004 have enhanced Bahrain's
appeal as a safe, liberal location for expatriates. Enrollment of both
female and male expatriate students from neighboring Saudi Arabia in
Bahraini schools has increased.

### Resources [**Return to top**](#ch4)

Ministry of Education (MOE)

<http://www.education.gov.bh/>

Ministry of Labor (MOL)

<http://www.bah-molsa.com/>

Bahrain Center for Studies and Research (BCSR)

<http://www.bcsr.gov.bh/>

Bahrain Civil Service Bureau (CSB)

<http://www.csb.gov.bh/>

University of Bahrain (UoB)

<http://www.uob.bh/>

Arabian Gulf University (AGU)

<http://www.agu.edu.bh/>

Medical University of Bahrain (Royal College of Surgeons)

<http://www.rcsi.ie/Medical_University_of_Bahrain/>

Bahrain Institute for Banking and Finance (BIBF)

<http://www.bibf.com/>

New York Institute of Technology (NYIT) Bahrain

<http://www.nyit.edu.bh/>

Bahrain Training Institute (BTI)

<http://www.bti.com.bh/>

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

For more information, please contact the Commercial Section, at the U.S.
Embassy in Bahrain.

## Electrical Power

### Overview [**Return to top**](#ch4)

For the past several years, the government was forced to implement a
program of organized, rolling brown-outs during the peak summer months
due to a lack of capacity. A one-day countrywide power failure occurred
in summer of 2004 due to mismanagement of power flow near the Alba
aluminum manufacturing plant. A Canadian firm was awarded the contract
to investigate the power failure. The study showed that both the
Ministry of Electricity and Alba were both at fault for summer 2004's
power-outage, while discrediting the Ministry's capability in crisis
management circumstances.

In June 2003, Ministry of Finance and National Economy (MOFNE) awarded
Ernest & Young a contract to study the privatization of the power and
water sectors. The current installed government power generation
capacity in Bahrain is 1,839 MW.

### Best Products/Services [**Return to top**](#ch4)

Alba provides another 275 MW on standby from its 1,505 MW power station.
Demand during the peak summer months forces the government to draw on
this regularly. Electricity consumption per capita in Bahrain is about
450 units a year. In 2002, domestic consumption accounted for 55 percent
of demand, industries 18 percent, and commercial establishments 26
percent. Some industries use natural gas to produce their own power.
Demand is growing by an average of 6.3 percent annually, and is
projected to outstrip even the expanded capacity from power upgrades and
the second phase expansion of Al Hidd power station. Already, plans have
been announced for the third phase, in which the Government will invest
more than \$400 million.

### Opportunities [**Return to top**](#ch4)

Six companies have been pre-qualified, in November 2004, for four new
power substations, to meet the expected peak demand of 1,840 MW of
electricity next summer. The four stations will be located in Manama
Central Market, Hamad Town, Alba and Al Jasra. A contractor will be
selected by the end of 2004. These four power stations will be built in
addition to a new \$500 million private power station, which is also
expected to begin its operation by 2006.

Also in November 2004, Bahrain's new and only private power plant, Al
Ezzel Power Company, has completed a \$380 million limited-recourse
financing for the construction of the first-ever private power plant in
Bahrain. The \$500 million plant will produce more than 950MW of power
per day by mid-2007. HSBC and Societe Generale led the loan, which also
included ANZ, Bayerische Landesbank, Calyon, Gulf Inter­na­tional Bank,
ING, Mashreqbank, Mizuho, RBS and Standard Chartered.

Demand is growing by an average of 6.3 percent annually. The demand
power creates offers ample opportunities in Bahrain's power sector.

### Resources [**Return to top**](#ch4)

Government of Bahrain (GOB)

<http://www.bahrain.gov.bh/>

Ministry of Finance (MOF)

<http://www.mofne.gov.bh/>

Aluminum Bahrain (Alba)

<http://www.albasmelter.com/>

Bahrain Convention and Exhibition Center (BCEB)

<http://www.bahrainexhibitions.com/>

Bahrain National Gas Company (Banagas)

<http://www.banagas.com/>

Bahrain's Economic Development Board (EDB)

<http://www.bahrainedb.com/>

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

For more information, please contact the Commercial Section, at the U.S.
Embassy in Bahrain.

## Water Desalination

> []{.mark}

### Overview [**Return to top**](#ch4)

Bahrain is a desert island on the Zone C aquifer stretching all the way
to Riyadh. Many years of heavy demand in Saudi Arabia and Bahrain have
significantly depleted the aquifer, threatening its long-term viability
and allowing seawater to infiltrate. The \"sweet water\" for which
Bahrain was long famous is now brackish and requires treatment before
use as drinking water or as process water for industry.

Bahrain currently uses 100 million gallons of water per day, or 36.5
billion gallons per year. The local water supply comes mainly from
non-renewable groundwater extraction. Supply barely exceeds demand; when
routine maintenance work was performed in January 2004, there were
rolling water shortages for several weeks. Two-thirds of Bahrain's water
is supplied through desalinization, and the remaining third comes from
the underground aquifer. Approximately 70 million gallons, desalinated
and blended, are for drinking purposes. Industries, agriculture, and
private gardens use the rest. Pilot projects are underway to use treated
effluent for irrigation. The Government aims to have all agricultural
water produced this way in the future.

In July 2004, the Ministry of Electricity and Water (MEW) announced that
it expected water consumption in Bahrain to reach an estimated 128
million gallons per day by 2010. Current water project initiatives in
the ministry budget involve the new Dour water production plant, a water
pipeline from ALBA, and plant expansion for the Ras Abu Jarjur water
desalinization facility. The Ras Abu Jarjur expansion is expected to
yield an additional 16 million gallons of water per day, while the Dour
plant is expected to provide an additional 8 million gallons per day in
2007. In July 2004, however, the MEW submitted a request to the Cabinet
to approve a \$33 million budget to complete the Dour plant by next
year. ALBA already supplies an estimated 3.5 million gallons per day to
the national water network, and is expected to increase its supply to 7
million gallons by the end of next year.

### Best Products/Services [**Return to top**](#ch4)

The MEW program to upgrade Bahrain\'s desalination and effluent
treatment infrastructure provides opportunities for U.S. companies.
Increasingly, water and power production are being integrated through
the construction of dual-use plants like those in Hidd and Manama. Water
production through desalinization is an energy intensive procedure,
making it ideal for integration with power generation facilities. The
Government subsidizes 55-60 percent of the cost of water to consumers.

Bahrain aims to reduce the abstraction of its scarce ground water
resources by building a new water plant in the Hidd area, which will
have the capacity to produce 60 million gallons per day. The current
production at Hidd is 30 million gallons per day. Sources at the
Ministry of Electricity and Water say that a contractor would be
appointed during the first quarter of 2005. The estimated two-year
construction period is expected to begin in 2006.

### Opportunities [**Return to top**](#ch4)

The MEW program to upgrade Bahrain\'s desalination and effluent
treatment infrastructure provides opportunities for U.S. companies.
Increasingly, water and power production are being integrated through
the construction of dual-use plants like those in Hidd and Manama. Water
production through desalinization is an energy intensive procedure,
making it ideal for integration with power generation facilities. The
Government subsidizes 55-60 percent of the cost of water to consumers.

### Resources [**Return to top**](#ch4)

Government of Bahrain (GOB)

<http://www.bahrain.gov.bh/>

Bahrain Economic Development Board (EDB)

<http://www.bahrainedb.com/>

Bahrain Convention and Exhibition Center (BCEB)

[www.bahrainexhibitions.com](http://www.bahrainexhibitions.com/)

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

For more information, please contact the Commercial Section, at the U.S.
Embassy in Bahrain.

## Construction

### Overview [**Return to top**](#ch4)

The construction sector has witnessed increasing activity and
opportunity as the private and public sectors undertake development
projects. This activity coincides with a boom in the country's real
estate market. Large-scale government infrastructure projects to build
roads, bridges, housing, airport expansions, and infrastructure to
support the Grand Prix racing circuit have stimulated the sector
throughout 2003 and into 2004. Furthermore, these development
initiatives have had a spillover effect in supply industries.

In early 2002, the Government approved a strategic budget of \$1.17
billion for special infrastructure projects. This allocation, which is
outside the general budget, is spread over a four-year period. The
projects that come under this budget include: a new port and an
industrial area in Hidd (\$464 million); a Hidd power and water station
(\$283 million); housing (\$273 million); a new hospital in Muharraq
(\$80 million) and an airport terminal expansion (\$51 million).

### Best Products/Services [**Return to top**](#ch4)

Ministry of Finance (MOF) reported a 3.5 percent growth in the
construction sector, from \$356.31 million in 2002 to \$368.83 million
in 2003. Construction grew at 12.5 percent and 11.6 percent in 2002 and
2001 respectively. The BMA further reports a significant 113.7 percent
increase in the number of construction licenses issued, from 292 in 2002
to 624 in 2003. 2002 had witnessed a 235.6% growth in licenses.

### Opportunities [**Return to top**](#ch4)

The increase in construction licenses reflected the initiation and
continuation of various development projects. These include the \$1.2
billion Durrat Al-Bahrain resort, the \$1 billion Amwaj Islands project,
the \$150 million Formula One race circuit, the \$1.3 billion Bahrain
Financial Harbour (BFH), the \$1.7 billion Alba expansion, the \$1.5
billion Bahrain Petroleum Company (Bapco) expansion and upgrade, major
expansion work at the airport, the \$600 million Hidd industrial zone
and port, the \$80 million Hidd bridge (opened late 2004), the new
\$92.8-119.4 million Sitra bridge, the \$500 million privatization of
the Equestrian and Horse Racing Facilities, the multi-million dollar
modernization of Adhari Theme Park, the Bahrain-Qatar causeway, \$600
million Al Areen Resort and Spa in Sakhir, the \$700 million Ice Berg
project, \$53 million Zallaq Hotel project, the \$27 million Sitra
shopping complex, and other private-sector lead multi-million dollar
projects.

The rising cost of construction materials has been a concern for local
and regional contractors due to Bahrain's relative dependence on
imports. Rising costs during the first quarter of 2004 were attributed
to increased global demand for construction inputs, the number of
development projects being undertaken in the GCC, and the temporary ban
on Saudi sand exports imposed by the Saudi government, which is pending
the adoption of new regulations. However, elevated costs are seen as
temporary, and construction projects are expected to continue. Moreover,
increased opportunity for contractors may offset financial strain
associated with rising material costs.

### Resources [**Return to top**](#ch4)

Government of Bahrain (GOB)

<http://www.bahrain.gov.bh/>

Ministry of Commerce (MOC)

<http://www.commerce.gov.bh/>

Ministry of Industry (MOI)

<http://www.industry.gov.bh/>

Ministry of Finance (MOF)

<http://www.mofne.gov.bh/>

Bahrain Economic Development Board (EDB)

<http://www.bahrainedb.com/>

Ministry of Municipalities and Agriculture (MOMA)

<http://www.municipality.gov.bh/>

Bahrain Ports Directorate

<http://www.bahrainports.gov.bh/>

Bahrain International Circuit (BIC)

<http://www.bahraingp.com.bh/>

Bahrain Financial Harbour (BFH)

<http://www.bfharbour.com/>

Bahrain Convention and Exhibition Center (BCEB)

<http://www.bahrainexhibitions.com/>

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

For more information, please contact the Commercial Section, at the U.S.
Embassy in Bahrain.

## Agricultural Sectors [**Return to top**](#ch4)

High value U.S. food and beverage products with strong market potential
in Bahrain include, in decreasing order: frozen poultry parts; snack
foods; processed fruits and vegetables; frozen beef; fresh apples and
pears; beer; tree nuts, particularly almonds; dairy products,
particularly cheeses; seafood, particularly crab; fruit and vegetable
juices; breakfast cereals; prepared meats; packaged rice; dry pulses;
and miscellaneous food products, particularly hot sauces, salad
dressings, catsup, mayonnaise, vinegar, iodized salt, frozen dough mixes
and coffee whiteners. In addition, growth in the local food processing
industry will continue to spur demand for beverage bases. Growth in the
hotel/restaurant sector may lead to increased demand for U.S. beef
products, bakery ingredients, wines and beer.

## Frozen/Chilled Beef [**Return to top**](#ch4)

  --------------------------------- ------------- ------------- ----------
  **Beef\***                        **2002**      **2003**      **2004**

  A. Total Market Size              4.4           3.2           4.0

  B. Total Local Production         \*\*          \*\*          \*\*

  C. Total Exports                  0             0             0

  D. Total Imports                  4.4           3.2           4.0

  E. Total Imports from U.S.        0.5           0.5           0.6
  --------------------------------- ------------- ------------- ----------

\* Estimates in thousand metric tons Source: ATO-Dubai estimates \*\*
Negligible

The rapidly expanding hotel/restaurant (HRI) sector, including American
fast food/quick service restaurants, prompted a notable increase in
imports of U.S. beef. India and Australia dominate the frozen beef
market, while imports from Europe, specifically from Ireland, France and
the Netherlands, have been curtailed due to the incidence of BSE in that
region. Bahrain did not impose a ban on U.S. beef imports after a case
of BSE was reported in late 2003.

### Poultry Meat [**Return to top**](#ch4)

U.S. poultry meat, particularly chicken parts and to a lesser degree
whole chickens and turkey, are well known for their high quality. This
past year witnessed a large influx of brand-name chicken parts at very
competitive prices. Brazil, France, Saudi Arabia and Denmark dominate
the market for frozen whole chickens. Brazil and the U.S. dominate the
market for chicken parts. Whole chickens represent 90 percent of total
chicken meat imports. The preferred size for whole chicken ranges from
900-1,200 grams per bird. Chicken parts are imported in two-pound trays.
The presence of U.S. and allied forces in Kuwait and Iraq, as well as
the flow of aid and other commercial shipments to Iraq, should continue
to sustain or even increase demand from all sources including the U.S.
in 2004 and 2005.

  -------------------------------- -------------- ------------ -----------
  **Poultry Meat\***               **2002**       **2003**     **2004**

  A. Total Market Size             25             21           23

  B. Total Local Production        4              4            4

  C. Total Exports                 0              0            0

  D. Total Imports                 21             17           19

  E. Total Imports from U.S.       2.0            2.0          2.2
  -------------------------------- -------------- ------------ -----------

\* Estimates in thousand metric tons \*Source: ATO-Dubai estimates

### Resources [**Return to top**](#ch4)

For Bahrain's agriculture market, retail sector and food service sector
reports, please contact the [U.S Department of Agriculture's Trade
Office at the Embassy of the United States of America in Dubai,
U.A.E.](http://www.usembabu.gov.ae/atodubai.htm)

[Return to table of contents](#doing-business-in-bahrain)

[[]{#ch5 .anchor}Return to table of
contents](#doing-business-in-bahrain)

# Chapter 5: Trade Regulations and Standards

-   [Import Tariffs](#import-tariffs-return-to-top)

-   [Trade Barriers](#trade-barriers-return-to-top)

-   [Import Requirements and
    Documentation](#import-requirements-and-documentation-return-to-top)

-   [U.S. Export Controls](#u.s.-export-controls-return-to-top)

-   [Temporary Entry](#temporary-entry-return-to-top)

-   [Labeling and Marking
    Requirements](#labeling-and-marking-requirements-return-to-top)

-   [Prohibited and Restricted
    Imports](#prohibited-and-restricted-imports-return-to-top)

-   [Customs Regulations and Contact
    Information](#customs-contact-information-return-to-top)

-   [Standards](#standards-return-to-top)

-   [Trade Agreements](#trade-agreements-return-to-top)

-   [Web Resources](#web-resources-return-to-top-1)

## Import Tariffs [**Return to top**](#ch5)

In January 2003, Bahrain took a step toward further GCC integration by
ratifying the GCC Unified Customs Union. The agreement eliminated
tariffs for GCC member states on 417 items (primarily food and medical
products), and lowered to five percent its import duties on all other
commodities except alcohol (125% duty) and tobacco (100% duty). Over the
next three years, the GCC countries plan to implement a unified tariff
standard and a single-point-of-entry system. Inter-GCC trade data for
2004 has yet to be released, however according to the GCC Secretary
General for Economic Affairs, intra-GCC trade rose from \$4 billion in
1986 to approximately \$33.8 billion in 2001, an increase of 746
percent. The Government made several changes to its customs duties
regime to comply with the newly established GCC Unified Customs Union.
New customs classifications are as follows:

+--------------------+-------------------------------------------------+
| -   Duty Exempt    | Includes 417 listed commodities, mostly food    |
|                    | and medical products                            |
+--------------------+-------------------------------------------------+
| -   5 percent      | All other commodities, except tobacco and       |
|     import duty    | alcoholic beverages                             |
+--------------------+-------------------------------------------------+
| -   100 percent    | Tobacco                                         |
|     import duty    |                                                 |
+--------------------+-------------------------------------------------+
| -   125 percent    | Alcoholic beverages                             |
|     import duty    |                                                 |
+--------------------+-------------------------------------------------+

In principle, no tax or duty is payable on raw material imports,
semi-manufactured goods to be used in manufacturing, imports required
for development projects (not including spare parts), transshipments,
and re-exports.

Bahrain has phased out most subsidies for export industries, but permits
duty-free importation of raw materials for export products and of
equipment and machinery for newly established export industries. All
industries in Bahrain, including foreign-owned firms, benefit from
government-subsidized utilities.

Foreign products entering or already in the GCC are dealt with as
follows:

-   Goods imported to the GCC post January 1^st^ 2003 will be granted
    entry if the importer presents certificates issued by the first
    single-entry point as a proof that his customs duties have been paid
    after the establishment of the customs union;

-   Goods imported to the GCC post January 1^st^ 2003, and for which the
    importer fails to prove payment of customs duties after the
    establishment of the customs union, shall have their customs duty
    collected at the customs point of the country of final destination;

-   The customs declaration for statistical purposes shall be prepared
    manually by the owner of the goods or the person who acts on his
    behalf, or by computer, and shall be approved at the customs exit
    point and have the local invoices attached to it. Invoices are
    required to detail the correct value and origin of the goods;

-   The importer must ensure that the customs authority has made the
    necessary endorsements that justify the entry and exit of the goods
    on the basis of the statistical declaration.

## Trade Barriers [**Return to top**](#ch5)

For health and religious reasons, alcoholic beverages are assessed a 125
percent customs duty and tobacco products a 100 percent duty. There is
no local production of these goods. There are restrictions on the
foreign provision of engineering, legal, construction, and pilotage
services.

## Import Requirements and Documentation [**Return to top**](#ch5)

**Customs Procedures**

Following the completion of the Customs Bill of Entry by the importer or
representative agent, the customs authority stipulates the beginning of
the clearing process, composed of the following:

-   Statistics Office

-   Restriction on import and export (Imports and Exports Restriction
    Office)

-   Auditing the customs charges and other charges

-   Payment to Cashier of related charges

-   Inspection and checking of documents

**Customs regulation**

In general, the following will apply:

-   No customs duty is payable on goods imported in transit or for
    trans-shipment;

-   No customs duty is payable on exports.;

-   Raw materials and equipment for use in manufacturing are exempt from
    duty under the Protection and Support Law;

-   Duty exemption for qualified goods is available under the GCC Trade
    Exchange, the Bilateral Trade Agreement, and the Arabian Free Trade
    Area Agreement;

-   Exemption is available for goods stored in bonded warehouses;

-   All other imports are subject to customs duty at rates set in the
    customs tariff. These apply on CIF Bahrain value.

For imports, Bahraini Customs requires the following documents:

-   A Delivery Order issued by the Shipper or the Liner's Agent;

-   A Supplier's commercial invoice in duplicate (in Arabic or English);

-   A Packing List in duplicate;

-   A Certificate of Origin in Arabic or English (produced by a Chamber
    of Commerce and endorsed by an Arab Embassy);

-   A copy of the Insurance Certificate, if applicable;

-   A Bill of Lading (four copies), including gross weight and
    dimensions;

-   A bank payment voucher or bank receipt;

-   A statistical declaration if the final destination for the goods is
    in one of the GCC states.

#### Source: Directorate General of Customs

For food items, the Bahraini Customs Directorate Handbook requires
importers to present a manufacturer's certificate stating that goods do
not contain cyclamates.

Imported and exported goods are classified according to the Standard
International Trade Classification (SITC), Revision 3.

For more information or inquiries please contact:

**Bahrain Customs\
**P.O. Box 15

Manama\
Kingdom of Bahrain\
Tel: +(973) 17-725333\
Fax: +(973) 17-727556\
Website: <http://www.bahraincustoms.gov.bh/>

E-mail: customs@batelco.com.bh

## U.S. Export Controls [**Return to top**](#ch5)

U.S. companies exporting to Bahrain need to apply for an export license
from the Bureau of Industry and Security (BIS) if their products or
services are controlled for any of the following reasons: CB1, CB2, CB3,
NP1, NS1, NS2, MT1, RS1, RS2, CC1, CC3. If a firm doe not know its
export commodity control number, it should contact its local [U.S.
Export Assistance Center](http://www.buyusa.gov/home/export.html)
[(USEAC)](http://www.buyusa.gov/home/export.html) for more information
on BIS commodity classification. Additional information about the types
of products covered may be obtained from the [State Department's
Directorate of Defense Trade](http://www.pmdtc.org/) or the [Commerce
Department's Bureau of Industry and Security
(BIS)](http://www.bis.doc.gov/).

## Temporary Entry [**Return to top**](#ch5)

Facilities in the two free zones, Mina Salman and the North Sitra
Industrial Estate, may be used for the temporary import of goods for
re-export.

## Labeling and Marking Requirements [**Return to top**](#ch5)

By law, food labels must include product and brand names, production and
expiration dates, country of origin, name and address of manufacturer,
net weight in metric units, and a list of ingredients in descending
order of magnitude. All fats and oils used as ingredients must be
specifically identified on the label. Labels must be in Arabic or in
Arabic/English. Stickers are [not]{.underline} accepted. Small
quantities of products in English-only labels may be approved for import
on a case-by-case basis for test marketing purposes. Pork products, or
products containing pork or pork lard, should be clearly identified as
such on the label. Products found to contain traces of pork that are not
so labeled will be confiscated and possibly banned from future import
for a specified period of time.

## Prohibited and Restricted Imports [**Return to top**](#ch5)

**Prohibited Imports**

According to the Bahrain Customs and Ports Directorate Handbook, a
number of items are prohibited from import. These include:

-   Irradiated food products;

-   Weapons, except under special license;

-   Pornography and materials considered salacious;

-   Wild animals;

-   Radio-controlled model airplanes;

-   Children\'s toys containing methyl chloride and other articles
    declared injurious by the Ministry of Health (MOH);

-   Foodstuffs and sweets containing cyclamates.

Manufacturers must present a certificate verifying that foods do not
contain cyclamates. Drugs and medicines may only be imported by a drug
store or pharmacy licensed by the Ministry of Health (MOH).

Bahrain requires that pharmaceutical products be imported directly from
a manufacturer with a research department and that the products be
licensed in at least two other GCC countries, one of which must be Saudi
Arabia. Drugs and medicines may be imported only by a drug store or
pharmacy licensed by the Ministry of Industry and Commerce after
approval by the Ministry of Health. Bahrain prohibits the importation of
weapons (except under special license), pornography, wild animals,
radio-controlled model airplanes, foodstuffs containing cyclamates, and
children's toys containing methyl chloride (and other articles declared
harmful by the Ministry of Health). Bahrain is also taking steps to ban
the import of 127 chemicals.

All imported beef and poultry products require a health certificate
issued by the country of export, and a Halal slaughter certificate
issued by an approved Islamic center in that country.

For an up-to-date copy of the prohibited items list, please visit
Bahrain\'s Customs website:
[http://www.bahraincustoms.gov.bh](http://www.bahraincustoms.gov.bh/).

**Sanctions imposed on imports**

As a member of the Arab League, Bahrain is officially committed to
enforcement of the primary aspect of the Arab League\'s boycott of
Israel, but enforcement is lax. Bahrain does not enforce the secondary
or tertiary aspects of the boycott. Occasionally, U.S. citizens and
firms encounter tender documents that specify participation in the
boycott, which U.S. firms cannot legally sign. Document language in such
instances is usually quickly adjusted.

**Export Subsidies**

Bahrain has phased out most subsidies for export industries, but permits
duty-free importation of raw materials for export products and of
equipment and machinery for newly established export industries. All
industries in Bahrain, including foreign-owned firms, benefit from
government-subsidized utilities.

## Customs Contact Information [**Return to top**](#ch5)

**Websites:**

Ministry of Heath (MOH)

<http://www.moh.gov.bh/>

Bahrain Customs Directorate

<http://www.bahraincustoms.gov.bh/>

Bahrain Ports Directorate

<http://www.bahrainports.gov.bh/>

Ministry of Commerce (MOC)

<http://www.commerce.gov.bh/>

Ministry of Industry (MOI)

<http://www.industry.gov.bh/>

**Contact Information:**

Dr. Salman Abdulnabi

Head, Veterinary Services

(*For veterinary regulations, livestock and pet imports, and licensing*)

Ministry of Municipalities Affairs and Agriculture

P.O. Box 251

Manama, Bahrain

Tel: +(973) 17-691256

Fax: +(973) 17-694673

Dr. Abdulla Ahmad Abdulla Ali

Head of Food & Water Control Section

(*For food product inspection*)

Ministry of Health

P.O. Box 12

Manama

Kingdom of Bahrain

Tel: +(973) 17-273683

Fax: +(973) 17-279253

Mrs. Leila Abdul-Rahman

Director of Pharmacies and Drug Control

(*For health foods licensing and inspection*)

Ministry of Health

P.O. Box 12

Manama

Kingdom of Bahrain

Tel: +(973) 17-258668

Fax: +(973) 17-259357

Ms. Mona Al-Zeera

Acting Director of Standards & Metrology

(*For all standards, including food standards*)

Ministry of Industry and Commerce

P.O. Box 5479

Manama

Kingdom of Bahrain

Tel: +(973) 17-523030

Fax: +(973) 17-530730

Mr. Mohamed Ali Ajoor

Director of Consumer Protection

(*For consumer protection and food policy*)

Ministry of Industry and Commerce

P.O. Box 5479

Manama

Kingdom of Bahrain

Tel: +(973) 17-523264

Fax: +(973) 17-530180

Dr. Mohamed Foda

Plant Protection Advisor

(*For plant and seed licensing*)

Ministry of Municipalities Affairs and Agriculture

P.O. Box 251

Manama

Kingdom of Bahrain

Tel: +(973) 17-691251

Fax: +(973) 17-695734

**USDA Contact Information**

Trade Assistance and Promotion Office (TAPO)

Foreign Agricultural Service (FAS)

U.S. Department of Agriculture

Ag Box 1052

Washington, D.C. 20250-1052

Tel: +1(202) 7207420

Fax: +1(202) 6904374

Website: <http://www.fas.usda.gov/>

## Standards [**Return to top**](#ch5)

-   [Overview](#overview-return-to-top-10)

-   [Standards Organizations](#standards-organizations-return-to-top)

-   [Conformity Assessment](#conformity-assessment-return-to-top)

-   [Product Certification](#accreditation-return-to-top)

-   [Accreditation](#accreditation-return-to-top)

-   [Publication of Technical
    Regulations](#publication-of-technical-regulations-return-to-top)

-   [Labeling and Marking](#labeling-and-marking-return-to-top)

###  Overview [**Return to top**](#standards-return-to-top)

As part of the GCC Customs Union, member countries are working toward
unifying their standards and conformity assessment systems, and have
progressed considerably toward the goal of a unified food standard --
originally targeted for adoption by 2006. However, each country
currently applies either its own standard or a GCC standard, which can
cause confusion for businesses.

Bahraini standards are required to meet national requirements (safety,
quality, and fitness for purpose), as prepared by the respective
technical committees. Most often, Bahraini standards are adoptions of
international or Gulf standards and the development of standards in
Bahrain is based on the following principles: a) no Bahraini standard is
to be developed if there is an identical draft Gulf standard in
existence, b) developing new Bahraini standards must not create trade
barriers.

The total number of Gulf standards adopted as Bahraini standards
currently stands at 1020, out of which 320 are mandatory and 700 are
voluntary. There are also approximately 434 draft Gulf standards in the
pipeline.

Bahrain's Standards and Metrology Directorate (BSMD) is a government
institution within the Ministry of Industry and Commerce. It is
responsible, in accordance with Legislative Decree No. 16 of 1985 on
Standards and Metrology, as amended by Legislative Decree No. 13 of
1992, for issuing Bahrain's standards, either by adopting as national
standards the international or Gulf standards issued by the Gulf
Cooperation Council (GCC) Standards and Metrology Organization, or by
preparing standards to meet national requirements.

The BSMD is led by a National Committee that acts as the Board of
Directors. This board, made up of representatives from relevant
ministries and the Chamber of Commerce as well as individual experts, is
the highest authority on standards and metrology. The BSMD consists of
two sections: the Standards & Information section and Quality Assurance
& Metrology section.

Standardization in Bahrain can be traced back to the late 1960s when
traffic was shifted from the left to the right side of the road, and
liquid measures were converted from the imperial gallon to the liter.
The pound was used for mass measurements, and the foot, yard, and mile
for length and area measurements. The changeover to the metric system
set the pace for standardization in Bahrain.

###  Standards Organizations [**Return to top**](#standards-return-to-top)

The Directorate of Standards and Metrology consists of two Sections. The
functions and operations of each section are graphed in the Organization
Chart below:

**Organization Chart**\
![](media/image2.wmf)

Source: Standards and Metrology Directorate

Ministry of Industry and Commerce

According to the Ministry of Industry and Commerce, the Standards and
Metrology Directorate\'s major responsibilities are to control and
monitor the quality of products and to ensure that trade and industry
use accurate measurements. It is also responsible for protecting
consumers from commercial fraud and goods of inferior quality, and for
protecting the environment from ecologically hazardous goods. It
actively promotes standardization, quality-management systems, and the
use of accurate measurements in the Kingdom. 

The Standards and Metrology Directorate's services include:

1.  An information center;

2.  Standards development;

3.  Standards implementation;

4\. Quality development and metrology.

###  Conformity Assessment [**Return to top**](#standards-return-to-top)

The Standards and Metrology Directorate has established an office in
Mina Salman (main Port) in the Customs Department to check and approve
all regulated products before they enter the market. Currently,
controlled products include the following:

1.  Tires

2.  Car batteries

3.  Asbestos

4.  Toys

5.  Plastic bags

6.  Tissue papers

For more information, please contact:

######### 

######### Standards and Metrology Directorate

Ministry of Industry and Commerce

P.O. Box 5497

Tel: +(973) 17-523030

Fax: +(973) 17-530730

Website: www.commerce.gov.bh

E-mail: <bsmd@batelco.com.bh>

###  Product Certification [**Return to top**](#standards-return-to-top)

**Source: Ministry of Industry and Commerce**

+---+----------+--------+----------+--------+---------+--------------+
| * | **Name** | **C    | **Tel    | *      | **M     | **Address**  |
| * |          | ontact | ephone** | *Fax** | obile** |              |
| N |          | Pe     |          |        |         |              |
| o |          | rson** |          |        |         |              |
| . |          |        |          |        |         |              |
| * |          |        |          |        |         |              |
| * |          |        |          |        |         |              |
+---+----------+--------+----------+--------+---------+--------------+
| * | BVQI --  | Shaker | +(973)   | +(973) | +(973)  | P.O. BOX.45  |
| * | Dubai    | R      |          |        |         |              |
| 1 |          | asheed | 1        | 17-    | 3-      | Manama       |
| - |          |        | 7-725010 | 727913 | 9461542 |              |
| * |          |        |          |        |         | Kingdom of   |
| * |          |        |          |        |         | Bahrain      |
+---+----------+--------+----------+--------+---------+--------------+
| * | DNV --   | Majdi  | +(973)   | +(973) | +(973)  | P.O. BOX.783 |
| * | Bahrain  | Burgun |          |        |         |              |
| 2 |          |        | 1        | 17-    | 3-      | Manama       |
| - |          |        | 7-212552 | 211696 | 9410907 |              |
| * |          |        |          |        |         | Kingdom of   |
| * |          |        |          |        |         | Bahrain      |
+---+----------+--------+----------+--------+---------+--------------+
| * | BSI --   | John   | +(44)    | +(44)  | +(44)   | BSI-389      |
| * | London   | Giakin |          |        |         | Chinwick     |
| 3 |          |        | 2        | 208    | 776     | High Road -- |
| - |          |        | 08996325 | 967852 | 8251156 | 15^th^ floor |
| * |          |        |          |        |         | East -       |
| * |          |        |          |        |         | London WA    |
|   |          |        |          |        |         | 4AL -- UK    |
+---+----------+--------+----------+--------+---------+--------------+
| * | **\***   | Wayne  | +(971)   | +(971) | \-      | \-           |
| * | Moody    | B      |          |        |         |              |
| 4 | Inter    | amford | 4        | 4-     |         |              |
| - | national |        | -2284808 | 2      |         |              |
| * | -- KSA   |        |          | 283843 |         |              |
| * | **(U.S.  |        |          |        |         |              |
|   | Firm)**  |        |          |        |         |              |
+---+----------+--------+----------+--------+---------+--------------+
| * | Lloyds   | \-     | +(966)   | +(966) | \-      | P.O.BOX 299  |
| * | -- KSA   |        |          |        |         |              |
| 5 |          |        | 3        | 3-8    |         | Dammam       |
| - |          |        | -8335356 | 321395 |         |              |
| * |          |        |          |        |         | Kingdom of   |
| * |          |        |          |        |         | Saudi Arabia |
+---+----------+--------+----------+--------+---------+--------------+
| * | Lloyds   | \-     | +(962)   | +(962) | \-      | \-           |
| * | --       |        |          |        |         |              |
| 6 | Jordan   |        | 6        | 6-5    |         |              |
| - |          |        | -5865750 | 864286 |         |              |
| * |          |        |          |        |         |              |
| * |          |        |          |        |         |              |
+---+----------+--------+----------+--------+---------+--------------+
| * | TUV --   | Naji   | +(973)   | +(973) | \-      | P.O.BOX.     |
| * | Bahrain  |        |          |        |         | 21384        |
| 7 |          | A.     | 1        | 17-    |         |              |
| - |          | Aziz   | 7-531147 | 532548 |         | Manama       |
| * |          |        |          |        |         |              |
| * |          |        |          |        |         | Kingdom of   |
|   |          |        |          |        |         | Bahrain      |
+---+----------+--------+----------+--------+---------+--------------+
| * | National |        | +(971)   | +(971) | \-      | P.O. BOX.    |
| * | Quality  |        |          |        |         | 245          |
| 8 | A        |        | 2-785696 | 2-     |         |              |
| - | ssurance |        |          | 761636 |         | Manama       |
| * |          |        |          |        |         |              |
| * |          |        |          |        |         | Kingdom of   |
|   |          |        |          |        |         | Bahrain      |
+---+----------+--------+----------+--------+---------+--------------+
| * | **\***   |        | +(973)   | +(973) |         | P.O. BOX.    |
| * | KPMG     |        |          |        |         | 710          |
| 9 | Auditors |        | 1        | 17-    |         |              |
| - | &        |        | 7-224807 | 227443 |         | Manama       |
| * | Ma       |        |          |        |         |              |
| * | nagement |        |          |        |         | Kingdom of   |
|   | Con      |        |          |        |         | Bahrain      |
|   | sultants |        |          |        |         |              |
|   | (**(U.S. |        |          |        |         |              |
|   | Firm)**  |        |          |        |         |              |
+---+----------+--------+----------+--------+---------+--------------+

###  Accreditation [Return to top](#standards-return-to-top)

In 1977 a law for measures of mass, length, and volume was published
making the use of the kilogram mandatory. In 1979, the use of the meter
in the textile trade and land registration was also made mandatory.

In 1978, Bahrain joined the Arab Organization for Standardization and
Metrology (ASMO), now the Arab Center for Standards and Metrology within
the Arab Organization for Industrial Development and Mining (AIDMO).
Bahrain and the other Gulf States then established the Standardization
and Metrology Organization for GCC States (GSMO) in 1984.

At the International level, Bahrain joined the International
Organization for Standardization (ISO), and the International
Organization for Legal Metrology (OIML) in 1984 as a correspondent
member.

In 1985, a law for Standards and Metrology was passed giving the primary
responsibility for standards to the Ministry Of Commerce. In 1988, the
Directorate

of Standards and Metrology at the Ministry of Commerce was officially
established in Bahrain to act as a national Standards body.

The Directorate has been implementing quality development activities
since 1996. An ongoing project in collaboration with the United Nations
Industrial Development Organization (UNIDO) aims to provide assistance
and consulting to local companies as they implement the ISO 9001
Standard. In 1999, the Directorate began implementing Total Quality
Management (TQM) for small and medium sized enterprises (SMEs).

**Quality Unit**\
In accordance with the agreement between the Ministry of Commerce and
the United Nations Development Program (UNDP), the Quality Unit of the
Directorate of Standards and Metrology provides consulting services to
small and medium sized enterprises to meet the requirements for ISO 9000
certification. Quality Unit staff, with the assistance of a UNIDO
expert, provided guidance to six service companies involved in phase two
of the quality project. The guidance involved the final documentation of
quality systems, and the pre-assessment process. Four out of six of
these companies have documented and implemented their quality system.

###  Publication of Technical Regulations [**Return to top**](#standards-return-to-top)

The National Committee of the Directorate of Standards and Metrology
approves and issues procedures for the implementation of national
standards. The National Committee has approved several GCC standards as
mandatory. It issued these in the form of a ministerial order, and also
published them in the Official Gazette.

(Note: The Official Gazette is available on the [Ministry of Industry
and Commerce's](http://www.commerce.gov.bh/) E-Gazette link: located on
the top right-hand corner.)

###  Labeling and Marking [**Return to top**](#standards-return-to-top)

Bahrain has replaced its product shelf-life requirements -- a major
impediment to U.S. processed food exports to the Gulf region, with
international (Codex) standards. Food labels must include product and
brand names, production and expiration dates, country of origin, name
and address of the manufacturer, weight in metric units, and a list of
ingredients and additives in descending order of importance.

Arabic labels are required on all products sold in Bahrain. U.S.
companies willing to print Arabic labels and provide bilingual
promotional and marketing assistance have a competitive edge. All fats
and oils used as ingredients must be listed in Arabic or Arabic and
English. Documents and labels must not contain any reference to Israel,
including flags or other icons that refer to Israel.

Although stickers providing such information are not legally accepted,
if they provide required labeling information exceptions are normally
made.

Small quantities of products with English-only labels may be approved
for import on a case-by-case basis for test marketing purposes. Pork
products, or products containing pork or pork lard, should be clearly
identified as such on the label. Products found to contain traces of
pork that are not so labeled will be confiscated and possibly banned
from future import for a specified period.

## Trade Agreements [**Return to top**](#ch5)

Bahrain is a member of the Gulf Cooperation Council (GCC). Duty-free
access from Bahrain to other GCC countries is granted provided exported
products have a minimum of 40 percent local value-added. According to
the Bahraini Ministry of Finance, Bahrain signed 26 bilateral trade
agreements with Arab and non-Arab countries around the world,
categorized as follows:

-   Agreements on the promotion and protection of investments

-   Agreements on the avoidance of double taxation and prevention of
    income tax evasion

-   Agreements on reciprocal exemption from income tax in the business
    of international air transport

-   Agreements on economic, trade, and technical co-operation

Bahrain and the U.S. signed a bilateral investment treaty (BIT) in
September 1999, the first BIT between the United States and a GCC state.
The agreement entered into force in

May 2001.

As of July 2003, Bahrain had bilateral investment protection agreements
in place with Algeria, China, Egypt, Jordan, Malaysia, Morocco, Syria,
Philippines and the UK.

Bahrain has economic and commercial cooperation agreements with
Australia, Bangladesh, China, Egypt, France, Greece, India, (Iraq),
Jordan, Morocco, the Netherlands, Russia, Singapore, South Korea, Syria,
Tunisia, Turkey and the UK.

Bahrain has air transportation tax agreements with China, France,
Greece, Singapore, Turkey, UK, U.S. and Yemen, and two transportation
agreements with Syria. Bahrain has concluded double taxation agreements
with Egypt, France, India, Jordan, Malaysia, Morocco, the Philippines,
Thailand and Tunisia.

## Web Resources [**Return to top**](#ch5)

######### [**Standards and Metrology Directorate**](http://www.commerce.gov.bh/), Ministry of Industry and Commerce

[Return to table of contents](#doing-business-in-bahrain)

[[]{#ch6 .anchor}Return to table of
contents](#doing-business-in-bahrain)

# Chapter 6: Investment Climate

-   [Openness to Foreign
    Investment](#openness-to-foreign-investment-return-to-top)

-   [Conversion and Transfer
    Policies](#conversion-and-transfer-policies-return-to-top)

-   [Expropriation and
    Compensation](#expropriation-and-compensation-return-to-top)

-   [Dispute Settlement](#dispute-settlement-return-to-top)

-   [Performance Requirements and
    Incentives](#performance-requirements-and-incentives-return-to-top)

-   [Right to Private Ownership and
    Establishment](#right-to-private-ownership-and-establishment-return-to-top)

-   [Protection of Property
    Rights](#protection-of-property-rights-return-to-top)

-   [Transparency of Regulatory
    System](#transparency-of-regulatory-system-return-to-top)

-   [Efficient Capital Markets and Portfolio
    Investment](#efficient-capital-markets-and-portfolio-investment-return-to-top)

-   [Political Violence](#political-violence-return-to-top)

-   [Corruption](#corruption-return-to-top)

-   [Bilateral Investment
    Agreements](#bilateral-investment-agreements-return-to-top)

-   [OPIC and Other Investment Insurance
    Programs](#opic-and-other-investment-insurance-programs-return-to-top)

-   [Labor](#labor-return-to-top)

-   [Foreign-Trade Zones/Free
    Ports](#foreign--trade-zonesfree-ports-return-to-top)

-   [Foreign Direct Investment
    Statistics](#foreign-direct-investment-statistics-return-to-top)

-   [Web Resources](#web-resources-return-to-top-2)

## Openness to Foreign Investment [**Return to top**](#ch6)

The Government of Bahrain has a generally liberal approach to foreign
investment and is eager to improve Bahrain\'s attractiveness to
international investors and businesses. Top government officials make
frequent public statements citing growth of foreign investment as one of
the government\'s main priorities. According to GOB officials, Bahrain
rates number 29 in attracting foreign direct investment and the average
foreign direct investment into the local market reached \$1.7 billion
over the past three

years. The government has focused its efforts on the entry of new
private firms, particularly in the information and communications
technology, education and training services, tourism, financial
services, business services, healthcare services and downstream
industries. Bahrain\'s Crown Prince is also an outspoken proponent of
privatization in Bahrain.

The Crown Prince took over the chairmanship of the Economic Development
Board (EDB), a \"one-stop-shop\" for potential investors, and in 2004
was entrusted with the King\'s labor, economic, and training reform
visions.

In an economy largely dominated by parastatals (outside of the financial
services sector), the Government of Bahrain seeks to foster a greater
private sector role in economic growth. Following the creation of a
Supreme Privatization Council in the spring of 2001, the King of
Bahrain, Shaikh Hamad bin Isa Al-Khalifa, issued a decree on October
2002 laying out guidelines for privatizing tourism, telecommunications,
transport, electricity and water, ports and airport services, oil and
gas, and postal service sectors.

The telecommunications sector was the first key sector to be liberalized
in Bahrain following the government\'s announced interest in opening
traditionally government-controlled industries. The Telecommunications
Regulatory Authority (TRA), established in late 2002, awarded a mobile
telecommunications services license to MTC-Vodafone, thus ending the
monopoly of Bahrain\'s telecom services provider, Batelco. The license
was awarded under the Telecommunications Law, which took effect January
2003. Telecommunications liberalization also extended to paging
services, very small aperture terminal (VSAT), public access mobile
radio services, international telecommunications facilities,
international telecommunications services, national fixed services,
internet service provider (ISP) and value-added services license
following the full liberalization of the sector on July 1, 2004. As of
December 2004, the TRA announced the provision of three International
Telecommunications Facility licenses (IFLs), five International
Telecommunications Services Licenses (ISLs), five VSAT licenses, fifteen
value-added Services (VAS) \"Class\" licenses and eight Internet Service
Provider (ISP) licenses.

The public transportation service was also privatized in 2003. CARS, a
Bahraini-UAE joint venture, started operating in May 2003 with 41 new,
air-conditioned, 52-seat buses. The CARS company completed its plan to
acquire 20 new buses by the end of 2003. Its total investment in the
public transportation privatization project is approximately \$10
million.

The Kingdom\'s first independent power plant project (IPP) was also
successfully tendered and awarded to Bahraini-based Al Ezzel Independent
Power Producer (IPP), which is equally owned by a Belgian-Gulf
consortium of Tractebel EGI and Gulf Investment Corporation.

Four international operators have also been short-listed to manage Min
Salman and the new Hidd ports.

The Government, under the privatization law, has made a commitment to
gradually dispose its interests and stakes in certain companies. But the
National Assembly\'s lower house members (Council of Representatives)
have already been criticizing the Government\'s decision to sell of the
remaining state holdings the Bahrain Telecommunication Company
(Batelco).

Seeking to maintain Bahrain\'s status as the Gulf region\'s preeminent
financial center, the Bahrain Monetary Agency (BMA) meets the highest
international standards of financial regulation.

The Bahrain Stock Exchange (BSE) allows GCC firms and GCC persons to own
up to 100 percent of listed companies. Non-GCC firms/persons may own up
to 49 percent of listed companies. The Minister of Industry and Commerce
chairs the BSE Board of Directors, but it is operated as an independent
corporate entity. The Minister announced that within three years non
GCC-nationals would be offered up to 100 percent ownership. Under the
terms of the Bilateral Investment Treaty (BIT), U.S. investors can gain
Most Favored Nation (MFN) or GCC treatment beginning January 1, 2005.

In March 2004, as part of an effort to stimulate the insurance industry
and reinforce Bahrain\'s position as a major insurance center in the
Middle East, the Bahrain Monetary Authority (BMA) lifted the requirement
that foreign insurance brokers and loss adjusters have a local partner
to operate. These firms, which were previously required to have at least
51 percent Bahraini-ownership, are now permitted to operate with 100
percent foreign-ownership. The BMA is holding consultations on further
reform in areas such as captive insurance, solvency, business conduct,
risk management and financial crime, enforcement, BMA reporting and
public disclosure, intermediaries, and Islamic insurance. Taxation and
import laws apply equally to Bahraini and foreign-owned companies, and
foreign investors must comply with the same requirements and
legislation, as do local firms.

Bahrain requires that pharmaceutical products be imported directly from
a manufacturer with a research department and that the products be
licensed in at least two other GCC countries, one of which must be Saudi
Arabia. Drugs and medicines may be imported only by a drug store or
pharmacy licensed by the Ministry of Commerce after approval by the
Ministry of Health. Bahrain prohibits the importation of weapons (except
under special license), pornography, wild animals, radio-controlled
model airplanes, foodstuffs containing cyclamates, and children\'s toys
containing methyl chloride (and other articles declared harmful by the
Ministry of Health). Bahrain is also taking steps to ban the import of
127 chemicals.

Bahrain has phased out most subsidies for export industries, but permits
duty-free importation of raw materials for export products and of
equipment and machinery for newly established export industries. All
industries in Bahrain, including foreign-owned firms, benefit from
government subsidized utilities.

Periodically, foreign firms experience difficulty obtaining required
work permits and residence visas for expatriate employees due to the
Bahraini government\'s efforts to promote greater numbers of Bahraini
citizens in the workforce. However, this does not appear to be a matter
of high-level policy, and often can be resolved on a case-by-case basis.
Where problems occur, U.S. businesses are encouraged to apply to the
highest levels of the concerned ministries, and to consult the U.S.
Embassy.

Bahrain offers several advantages to U.S. and other foreign investors,
including a Bilateral Investment Treaty with the United States (in force
as of May 2001) and a bilateral Free Trade Agreement (FTA) signed in
September 2004.

The government actively seeks Bahraini and foreign private investments
in large infrastructure projects. Previously, most such activity (other
than hotels) was funded by development agencies from other Gulf
countries (particularly Kuwait, UAE, and Saudi Arabia). Foreign-owned
companies are eligible for partial financing from the state-owned
Bahraini Development Bank (BDB), if they meet certain criteria such as
providing training and employment to a significant number of Bahrainis.

## Conversion and Transfer Policies [**Return to top**](#ch6)

Bahrain has no restrictions on the repatriation of profits or capital
and no exchange controls. Bahrain\'s currency, the Bahraini Dinar (BD),
is fully and freely convertible at the fixed rate of \$1.00 = BD 0.377
(1 BD = \$2.659). There is no black market or parallel exchange rate.

Foreign exchange is readily available and a devaluation of the Bahraini
Dinar over the next year is highly unlikely.

There are no restrictions on converting or transferring funds, whether
or not associated with an investment.

## Expropriation and Compensation [**Return to top**](#ch6)

There have been no expropriations in recent years, and no cases in
contention. The U.S.-Bahrain Bilateral Investment Treaty (BIT) protects
U.S. investments by banning all expropriations (including \"creeping\"
and \"measures tantamount to\") except those for a public purpose. In
which case, it must be carried out in a non-discriminatory manner, with
due process, and prompt, adequate, effective compensation.

## Dispute Settlement [**Return to top**](#ch6)

Bahrain has a long-established framework of commercial law. English is
widely used, and well-known international (including U.S.) law firms,
working in association with local partners, provide expert legal
services both nationally and regionally. Fees are charged according to
internationally accepted practices. Although only a Bahraini lawyer can
argue in a Bahraini court of law, lawyers of other nationalities can and
do work on cases.

From May 2001, the U.S.-Bahraini BIT provides for 3 dispute settlement
options:

1)  Submitting the dispute to a local court;

2)  Invoking dispute-resolution procedures previously agreed upon by the
    national or company and the host country government;

3)  Submitting dispute for binding arbitration to ICSID (International
    Center for Settlement of Investment Disputes) or any arbitral
    institution agreed upon by both parties.

The GCC Commercial Arbitration Center, established in 1995, serves as a
regional specialized body providing arbitration services. It assists in
resolving disputes between GCC countries or between other parties and
GCC countries. The Center implements rules and regulations in line with
accepted international practice. Thus far, few cases have been brought
to arbitration. The Center conducts seminars, symposia, and workshops to
help educate and update its members of any new arbitration related
matters.

The Center\'s contact details are as follows:

######## GCC Commercial Arbitration Center

P.O. Box 2338

Manama, Kingdom of Bahrain

Tel: +(973) 17-214-800

Fax: +(973) 17-214-500

Website: <http://www.gccarbitration.com/>

Email: arbit395@batelco.com.bh

Arbitration procedures are largely a contractual matter. Disputes are
historically referred to an arbitration body as specified in the
contract, or to the local courts. Increasingly, Bahraini companies, in
dealings with both local and foreign firms, include arbitration
procedures in their contracts. Most commercial disputes are resolved
privately without recourse to the courts or formal arbitration. Bahraini
law is generally specified in all contracts for the settlement of
disputes that reach the stage of formal resolution. Occasional lawsuits
against individuals or companies for nonpayment of debts have been
adequately handled by Bahrain\'s court system.

The guidelines laid down by the International Chamber of Commerce (ICC)
in Paris are generally respected, and disputes have been occasionally
referred to arbitration at the ICC in Paris. Bahrain is a signatory to
the New York Convention of 1958 on the Recognition and Enforcement of
Foreign Arbitration Awards.

## Performance Requirements and Incentives [**Return to top**](#ch6)

There are no special performance requirements imposed on foreign
investors. This is reinforced by the U.S.- Bahraini BIT, which forbids
mandated performance requirements as a condition for the establishment,
acquisition, expansion, management, conduct or operation of a covered
investment. Foreign and Bahraini-owned companies must meet the same
requirements and comply with the same environmental, safety, health, and
other labor requirements. Officials at the Ministries of Labor,

Commerce, and Industry supervise, on a non-discriminatory basis,
companies operating in Bahrain.

Industries must be set up in identified industrial areas. An
Environmental Impact Statement (EIS) must be filed by all manufacturing
facilities. After one complete year of operation, a manufacturing
facility is eligible for relief from tariffs imposed by other GCC states
on imported goods.

## Right to Private Ownership and Establishment [**Return to top**](#ch6)

In principle, private entities may freely establish, acquire, and
dispose of interests in business enterprises, subject to the limitations
noted in this chapter.

Implementation of the FTA awaits ratification of the U.S. Congress and
the Bahraini National Assembly. The agreement seeks to expand and
promote the scope of economic, commercial, investment, and trade
relations between the two countries.

The U.S.-Bahrain Bilateral Investment Treaty (BIT) provides benefits and
protection to U.S. investors in Bahrain, such as most-favored-nation
treatment and national treatment, the right to make financial transfers
freely and without delay, international law standards for expropriation
and compensation cases, and access to international arbitration. The BIT
guarantees national treatment for U.S. investments across all sectors,
with exceptions for ownership of television, radio (or other media),
fisheries, and privatization of oil dredging or exploration. Bahrain
also provides most favored-nation or national treatment status to U.S.
investments in air transportation, the buying or ownership of land, and
the buying or ownership of shares traded on the Bahrain Stock Exchange
(BSE).

Because of the national treatment offered American firms in the BIT,
American firms interested in selling products exclusively in Bahrain are
no longer required to appoint a commercial agent, though they may opt to
do so anyway. A commercial agent is any Bahraini party appointed by a
foreign party to represent the foreign party\'s product or service in
Bahrain.

Bahrain permits 100 percent foreign-ownership of new industrial entities
and the establishment of representative offices or branches of foreign
companies without local sponsors. Wholly foreign-owned companies may be
set up for regional distribution services and may operate within the
domestic market as long as they do not exclusively pursue domestic
commercial sales. Private investment (foreign or Bahraini) in petroleum
extraction is permitted only under a production-sharing agreement with
BAPCO, the state-owned petroleum company.

Since January 2001, foreign firms and GCC nationals may own land in
Bahrain. Non-GCC nationals may now own high-rise commercial and
residential properties, as well as property in tourism, banking,
financial and health projects, and training centers, in specific
geographic areas.

## Protection of Property Rights [**Return to top**](#ch6)

The Bahraini legal system adequately protects and facilitates
acquisition and disposition of property rights. The concept of a
mortgage exists, and there is a recognized and reliable system of
recording such security interests. However, there is currently no
mortgage law that guarantees lenders the right to repossess property in
case of mortgage non-repayment.

The U.S.-Bahrain FTA commits Bahrain to enforce world-class IPR
protection. Bahrain signed the Berne Convention for the Protection of
Literary and Artistic Works and the Paris Convention for the Protection
of Industrial Property in 1996. Revised legislation to implement
Bahrain\'s obligations under the TRIPS Agreement is currently under
review. Bahrain is also considering joining the WIPO Copyright Treaty
and the WIPO Performances and Phonograms Treaty. Bahrain has drafted and
is in the process of passing through new laws related to intellectual
property to bring Bahrain\'s local laws into compliance with its current
Paris Convention commitment and to position it to join the Nice
Agreement, Vienna Agreement, Patent Cooperation Treaty, Trademark Law
Treaty, Madrid Agreement, Budapest Treaty, and the Rome Convention.

The government has made dramatic progress in reducing copyright piracy,
and there are no reports of significant violations of U.S. patents and
trademarks in Bahrain. The government\'s copyright enforcement campaign
began late 1997 and was based on inspections, closures, and improved
public awareness. The campaign targeted the video, audio and software
industries with impressive results. The commercially pirated video and
audio markets have been virtually eliminated. However, software piracy,
which has shifted from retail to end-user violations, remains
problematic.

There are no technology transfer requirements that force firms to share
or divulge technology through compulsory licensing to a domestic
partner, nor are firms forced to commit to undertake research and
development activities in Bahrain.

## Transparency of Regulatory System [**Return to top**](#ch6)

In October 2002, Bahrain implemented a new government procurement law
that establishes the basic framework for a transparent, rules-based
government procurement system. It provides that certain procurements may
be conducted as international public tenders open to foreign suppliers.
To implement this law, a tender board, chaired by a Minister of State,
was established in January 2003 to oversee all government tenders and
purchases. In the past, government-tendering procedures for large
projects were not highly transparent.

U.S. companies sometimes reported operating at a disadvantage compared
with other international firms. Contracts were not always decided solely
based on price and technical merit, and selected, pre-qualified firms
were occasionally invited to bid on major government tenders.

As of January 2003, however, the Tenders Board processes all tender
decisions valued at \$26,525 (BD 10,000) or higher. Individual
ministries and departments may still process projects valued at less
than \$26,525 (BD 10,000). U.S. firms report that the process is greatly
improved over the previous system, though some challenges remain. A
local representative with strong connections may still be important in
the bidding process.

In the case of manufacturing enterprises, bureaucratic procedures and
red tape created stumbling blocks mainly due to the lack of coordination
between government ministries, which must sign off at one stage or
another of the licensing procedure.

In an attempt to streamline licensing and approval procedures, the
Ministry of Industry and Commerce opened the Bahrain Investors Center
(BIC) in October 2004 for both local and foreign companies seeking to
register in Bahrain.

This high-tech, customer-friendly and easy to find facility, located in
one of Bahrain\'s largest malls is part of a larger effort by the GOB to
attract firms to use Bahrain as their \"Gateway to the Gulf\" by setting
up regional operations here. The BIC is designed as a \"one-stop shop\"
providing all commercial licensing and registration services. It houses
representatives from all relevant ministries (over a dozen) and private
sector representatives from the telecommunication, legal, banking, and
consulting industries under one roof.

Officials from the Ministry note that the BIC can process and issue 80
percent of commercial registration applications within 24 hours and 10
percent of commercial registrations within five working days. The
remaining 10 percent, mostly those having to do with health,
environment, power and or other essential services, are processed
separately according to sector specific regulations and licenses are
issued on a case-by-case basis.

**Legislation Process**

Draft legislations are proposed by the Cabinet and by both the lower
house (Council of Representatives) and upper house (Shura or
Consultative Council) of the National Assembly. Once a draft law has
been produced and submitted to the lower and upper houses of the
National Assembly for approval, it is then passed to the Cabinet for the
King\'s signature. After the King signs the law, the law is published in
the Public Gazette and is promulgated.

Entrenched local business interests with government influence can cause
problems for potential competitors. Interpretation and application of
the law sometimes varies by ministry, and may be dependent on the
stature and connections of an investor\'s local partner. Departures such
as these from the consistent, transparent application of regulations and
the law remain rare, and investors are usually well pleased with
government cooperation and support.

## Efficient Capital Markets and Portfolio Investment [**Return to top**](#ch6)

Consistent with the government of Bahrain\'s liberal approach to foreign
investment, government policies facilitate the free flow of financial
resources. Foreigners and Bahrainis alike have ready access to credit on
market terms. Generally, credit terms are variable, but often are
limited to 10 years for loans under \$50 million. For major
infrastructure investments, banks will often offer to assume a part of
the risk, and Bahrain\'s onshore and offshore banks have shown extensive
cooperation in syndicating loans for larger risks. Generally, Bahrain\'s
banks are described as hungry for solid investment opportunities.

## Political Violence [**Return to top**](#ch6)

Bahrain experienced intermittent civil unrest in the mid 1990\'s. These
disturbances were directed primarily against the regime, but in a few
cases expatriate property, including homes, vehicles, and places of
business were damaged or destroyed, and several south Asian workers were
killed. Although the situation improved steadily after 1997, the 2002
upsurge in violence between Israelis and Palestinians sparked
anti-Israeli and anti-American demonstrations in Bahrain. The protests
peaked in April 2002 when a mob attacked the U.S. Embassy and set fire
to U.S. Government vehicles. Since that incident, large-scale protest
activity has subsided. Bored youths rioted in downtown Manama on
December 31, 2002 and inflicted significant damage to public and private
property. The

2003 Iraq war sparked a few political protests near the American and
British Embassies in which some private and government property was
damaged.

In October 2003, the Bahraini Court charged 10 youths over violent
protests by a concert against a Lebanese singer whose performance was
deemed immoral by Islamists.

Protesters threw petrol bombs during pitched battles with police,
damaging private vehicles. On January 9, 2005, the High Criminal Court
issued a verdict and found the 10 youth involved in the Lebanese
singer's case not guilty, due to the lack of evidence.

In March 2004, rioters protesting liquor sale attacked a restaurant in
Bahrain burning and damaging private owned vehicles. Reportedly, the
rioters also set two cars ablaze and smashed windows of several
vehicles. The foreign co-owner of the restaurant estimated a \$15,262
(BD 5,000) worth of physical damage on the property.

The Bahrain Chamber of Commerce and Industry have recently announced its
intent to form a business-lobby that advocates for and on behalf of the
private sector the lower branch of the National Assembly (parliament).

## Corruption [**Return to top**](#ch6)

According to U.S. firms, high-level corruption is sometimes an obstacle
to foreign direct investment and contracting, particularly in the
contract-bidding process and in operating notably successful
investments. In the case of some high-value contracts,
government-tendering procedures have not always been transparent and
contracts have not always been decided on the basis of price and
technical merit. However, petty corruption is relatively rare in
Bahrain. The bureaucracy is sometimes inefficient but it is generally
honest. Giving or accepting a bribe is illegal, although the relevant
laws are rarely enforced. Officials have been dismissed for blatant
corruption, but it is never so stated officially; no one has been tried
in court for corruption. The King and Crown Prince have come out
publicly in favor of reducing corruption and some Ministries have
initiated clean-up efforts to reduce the problem. The expatriate
business community is cautiously optimistic that there is growing
transparency in the government procurement process. A new law to
thoroughly revamp government procurement procedures went into effect in
January 2003. Bahrain is not a signatory to the OECD Convention on
Combating Bribery.

## Bilateral Investment Agreements [**Return to top**](#ch6)

Bahrain and the U.S. signed a bilateral investment treaty (BIT) in
September 1999, the first BIT between the United States and a GCC state.
The agreement entered into force in May 2001.

As of July 2003, Bahrain had bilateral investment protection agreements
in place with Algeria, China, Egypt, Jordan, Malaysia, Morocco, Syria,
Philippines and the UK. Bahrain has economic and commercial cooperation
agreements with Australia, Bangladesh, China, Egypt, France, Greece,
India, (Iraq), Jordan, Morocco, the Netherlands, Russia, Singapore,
South Korea, Syria, Tunisia, Turkey and the UK.

Bahrain has air transportation tax agreements with China, France,
Greece, Singapore, Turkey, UK, U.S. and Yemen, and two transportation
agreements with Syria. Bahrain has concluded double taxation agreements
with Egypt, France, India, Jordan, Malaysia, Morocco, the Philippines,
Thailand and Tunisia.

## OPIC and Other Investment Insurance Programs [**Return to top**](#ch6)

On April 25, 1987, Bahrain and the U.S. Government signed an agreement
regarding activity in Bahrain by the Overseas Private Investment
Corporation (OPIC). The agreement opened the way for extension of such
OPIC facilities as investment insurance, reinsurance, and investment
guarantees to U.S. private investors interested in doing business in
Bahrain.

## Labor [**Return to top**](#ch6)

The Bahrain labor force is estimated at 330,000, nearly two-thirds of
whom are expatriates. The GOB publicly states that unemployment, which
official statistics put at 6 percent of Bahrainis in Bahrain\'s
workforce, is the country\'s foremost domestic political problem. The
United Nations Development Program (UNDP) estimates real unemployment
among Bahrainis to be 15 to 20 percent and as high as 30 percent in some
Shi\'ite villages. On April 29, 2001 Bahrain\'s Cabinet approved a
two-year project worth over \$65 million to train and update
professional skills of unemployed Bahrainis. One of the government\'s
primary initiatives for combating unemployment is \"Bahrainization,\" or
the replacement of expatriate workers by national ones. In 2002 the
Government of Bahrain reserved certain professions, including heavy
vehicle drivers, for Bahraini nationals.

The Crown Prince launched a national debate in 2004 that is aimed at
creating a new labor vision for the Kingdom. This new reform effort
seeks to promote employment and training of Bahraini workers. The
initiative is likely to result in some legal changes in the labor field.
The Government of Bahrain is seeking to establish Bahrain as a regional
center for human resource development. Bahrain has over 50 training
institutes that offer training in a variety of areas such as
hospitality, information technology, business studies, English language
studies, and banking. Major training institutes include the Bahrain
Institute for Banking and Finance (BIBF), Bahrain Training Institute
(BTI), KPMG, and the British Council. Both educational and vocational
training curricula have been criticized recently for not adequately
preparing Bahrainis for the workforce. The government is making
concerted efforts to turn this situation around.

Another major step that the GOB has undertaken is the formation of trade
unions. Government officials developed a labor union law to allow trade
unions and to establish a system that would ensure and protect workers
rights. The labor union law went into effect in Fall 2002.

## Foreign -Trade Zones/Free Ports [**Return to top**](#ch6)

Mina Salman, Bahrain\'s major port, provides a free transit zone to
facilitate the duty-free import of equipment and machinery. The North
Sitra Industrial Estate is an industrial free zone and another one is
planned for Hidd. Foreign-owned firms have the same investment
opportunities in these zones as Bahraini companies.

A 1999 law requires that investors in industrial, or industry-related,
zones launch a project within one year from the date of receiving the
land, and development will have to conform to the specifications, terms
and drawings submitted with the application. Changes are not permitted
without approval from the Ministry Industry.

## Foreign Direct Investment Statistics [**Return to top**](#ch6)

Foreign investments in Bahrain range from partial foreign ownership of
large parastatals in the oil and telecommunications sectors to
restaurant franchises. As the economy is virtually tax-free, the
government does not maintain detailed statistics foreign direct
investment flows. The largest, by value, of foreign holdings in Bahrain
include:

-   Aluminum Bahrain (ALBA) and the Gulf Petrochemical Industries
    Complex (GPIC), each of which are owned as joint investments by
    several Gulf states.

-   Bahrain National Gas Company (BANAGAS) is owned by Bahrain, a Saudi
    investment firm, and Caltex Bahrain.

-   Amwaj Islands tourism project is jointly owned by Bahraini, Kuwaiti
    and Saudi corporate and individual investors.

-   The \$600 million tourism project of Al Areen Desert Spa and Resort
    is owned by the Government of Bahrain, various private investors and
    Gulf Finance House.

-   The development of the \$1.3 billion Bahrain Financial Harbor
    project, owned by Gulf Finance House, personal and corporate G.C.C.
    investors.

-   A \$398 million (BD 150) mall and \$26.4 new Bahrain City Center
    cinema complex will be constructed in the Seef district by Dubai,
    U.A.E.-based Al Futtaim Investments

-   Construction on a Saudi investment of a \$199 million (BD 75
    million) tourism resort at Al Dafna Al Hamra, Budaiya will begin
    this year.

According to U.S. Embassy records, approximately 180 U.S. companies were
operating, in one form or another, in Bahrain as of January 2005. Many
of the U.S. firms are in the services sector and thus do not have a
large capital investment in Bahrain despite a significant local
presence. Among the larger U.S. investments are the following:

-   Citibank\'s new regional headquarters building, opened in 2001,
    valued at nearly \$30 million.

-   Shaw-Nass, a manufacturing plant owned by Shaw Industries, a U.S.
    pipeline manufacturer, in partnership with a Bahraini firm, A.A.
    Nass.

-   National Hotels Company, owners of the Diplomat Radisson SAS Hotel
    and Executive Apartments have injected \$18 million for the
    expansion project.

-   U.S. operational headquartered Foster Wheel Energy Limited, a
    subsidiary of Foster Wheeler Limited, were awarded a front-end
    engineering design (FEED) contract to revamp Bahrain National Gas
    Company\'s (BANAGAS) liquefied petroleum gas (LPG) facilities.

-   Bentley College, Darden Graduate School of Business, and DePaul
    Graduate School of Business have ongoing educational programs with
    the Bahrain Institute of Banking and Finance (BIBF).

-   Wimberly Allison Tong and Goo (WATG) were appointed by the General
    Organization for Social Insurance (GOSI) to prepare the preliminary
    designs for the \$212 million resort development of the Marina Club.

-   Microsoft signed a deal to co-market IT at the \$1.3 billion Bahrain
    Financial Harbor development.

-   The Bahrain Monetary Agency (BMA) has granted a license to global
    insurance broking and consulting giant, Aon Corporation, to
    establish Aon Re Middle East, an insurance brokerage firm in
    Bahrain.

-   Joint venture between Bahrain-based Ithmaar Bank, US-based Overland
    Capital Group, Bahrain-based Gulf Finance House BSC, and
    Kuwait-based Gulf Investment House with an authorized capital of
    \$50 million and paid-up capital of \$10 million establish First
    Leasing Bank.

-   Joslin Diabetes Center Affiliate - Bahrain (a partnership between
    the Joslin Diabetes Center and local businessmen) have invested a
    value of \$9 million in the local economy.

American firms are also heavily involved in large-scale consulting and
construction projects in Bahrain. Below are examples of large-scale U.S.
affiliated consulting and construction projects in Bahrain:

-   Bechtel is responsible for the Engineering Procurement Construction
    and Management (EPCM) of aluminum smelter ALBA\'s \$1.7 billion
    fifth potline expansion project.

-   Parsons are the designers and supervising engineers for a \$26
    million-flyover project in Bahrain\'s Seef area. Parsons were also
    one of the appointed consultants for the Riffa Golf Club Phase 2
    Development Project

-   Great Lakes Dredge & Dock is performing dredging operations in
    conjunction with the \$464 million new Shaikh Khalifa Port in Hidd
    Industrial area. A \$105 million dredging contract has also been
    awarded to US-Bahraini joint venture Great Lakes - Nass (Great Lakes
    Dredge & Dock and Nass Group).

-   Cisco Systems have signed an agreement with Bahrain\'s Central
    Informatics Organization (CIO) establishing a regional Cisco
    networking academy.

-   Binnie, Black and Veatch International Limited are the consultants
    of Phase 3 of the Hidd (Power) and Desalination Complex. The project
    was estimated to cost \$400 million.

-   Kuljian Corporation, are consultants for Ras Abu Jarjur desalination
    plant expansion that is estimated to cost \$26.5 million.

-   General Electric Energy, Stone and Webster and Chicago Bridge and
    Iron Company were amongst the five companies that participated in
    the feasibility study of Kuwait Finance House\'s \$1.3 petrochemical
    plant project.

## Web Resources [**Return to top**](#ch6)

Government of Bahrain (GOB)

<http://www.bahrain.gov.bh/>

Ministry of Commerce (MOC)

<http://www.commerce.gov.bh/>

Ministry of Industry (MOI)

<http://www.industry.gov.bh/>

Ministry of Finance (MOF)

<http://www.mofne.gov.bh/>

Bahrain Economic Development Board (EDB)

<http://www.bahrainedb.com/>

Ministry of Municipalities and Agriculture (MOMA)

<http://www.municipality.gov.bh/>

Bahrain Tenders Board

<http://www.bahraintenders.gov.bh/>

Immigration and Passport Directorate, Ministry of Interior (MOI)

<http://www.immigration.gov.bh/>

Bahrain Ports Directorate

<http://www.bahrainports.gov.bh/>

Bahrain Customs Directorate

<http://www.bahriancustoms.gov.bh/>

Bahrain E-Visa Services

<http://www.evisa.gov.bh/>

Bahrain Tourism Directorate

<http://www.bahraintourism.com/>

Shura (Consultative) Council (Upper House of the National Assembly)

<http://www.shura.gov.bh/>

Al Nuwab or Council of Representative (Lower House of the National
Assembly)

<http://www.nuwab.gov.bh/>

General Traffic Directorate

<http://www.traffic.gov.bh/>

Legal Affairs Directorate

<http://www.bahrain.gov.bh/legalaffairs/>

Civil Aviations Directorate and Bahrain International Airport

<http://www.bahrainairport.com/index_web.htm>

Bahrain International Circuit (BIC)

<http://www.bahraingp.com.bh/>

Bahrain Financial Harbour (BFH)

<http://www.bfharbour.com/>

Bahrain Convention and Exhibition Center (BCEB)

<http://www.bahrainexhibitions.com/>

[Commercial Section, U.S. Embassy
Bahrain](http://www.buyusa.gov/bahrain) Contact

(Ms.) Nouf Jamsheer, Commercial Specialist

Email: <JamsheerN@state.gov> and <Nouf.Jamsheer@mail.doc.gov>

For more information, please contact the Commercial Section, at the U.S.
Embassy in Bahrain.

[Return to table of contents](#doing-business-in-bahrain)

[[]{#ch7 .anchor}Return to table of
contents](#doing-business-in-bahrain)

# Chapter 7: Trade and Project Financing

-   [How Do I Get Paid (Methods of
    Payment)](#how-do-i-get-paid-methods-of-payment-return-to-top)

-   [How Does the Banking System
    Operate](#how-does-the-banking-system-operate-return-to-top)

-   [Foreign-Exchange
    Controls](#foreign-exchange-controls-return-to-top)

-   [U.S. Banks and Local Correspondent
    Banks](#u.s.-banks-and-local-correspondent-banks-return-to-top)

-   [Project Financing](#fiftyseven)

-   [Web Resources](#web-resources-return-to-top-3)

## How Do I Get Paid (Methods of Payment) [**Return to top**](#ch7)

Letter of Credit (L/C) is the preferred method of payment for exports.
The L/C should conform to international guidelines established by the
International Chamber of Commerce (ICC), as published in the Uniform
Customs and Practice for Documentary Credits (UCP). L/Cs offer certain
advantages to the seller who depends on the creditworthiness of the
opening (issuing) bank rather than that of the buyer. For the buyer, an
L/C ensures that all of the seller\'s documents are correct before
payment is made.

Other possible methods of international commercial payments include
cash, open credit, and documentary credit sales.

According to a post-conducted telephone/fax survey of local companies
that regularly import a wide range of products from the U.S., the most
commonly used method of payment is open accounts, followed by commercial
letters of credit.

Post estimates the breakdown of payment methods as follows:

2.5 percent cash in advance\
28 percent commercial letter of credit\
53.5 percent open account\
5 percent documentary collections\
0 percent consignment sales\
10 percent bankers acceptances\
0 percent barter transactions\
0 percent trade factoring\
10 percent other methods

## How Does the Banking System Operate [**Return to top**](#ch7)

Bahrain is a principal financial services hub in the Middle East. Legal,
regulatory, and accounting systems in the financial sector (onshore and
offshore) are transparent and consistent with international norms.
International financial institutions operate in Bahrain, both
internationally and domestically, without impediments.

The Bahrain Monetary Agency (BMA), Bahrain's central bank, regulates the
banking sector under the provisions of the BMA law (Decree Law No. 23 of
1973). In May 2002, the Government of Bahrain announced that regulatory
responsibility for the insurance sector and stock exchange would move to
the BMA. This move was completed in late 2002.

As of February 2005, the Bahrain Monetary Agency (BMA), Bahrain's
central bank, issued 203 licenses. Seventeen new licenses were issued in
2004: one investment bank, four offshore banking units, one full
commercial bank, two investment advisory brokers, two financial services
ancillary service providers, three representative offices, one money
exchange unit and three Islamic banking and financial institutions.

Major U.S. banks and financial services firms in Bahrain include
Citibank, J P Morgan Chase, American Express, and Merrill Lynch. Bahrain
recently announced that it hopes to attract more investment funds and
\'special purpose companies\' by re-assessing the fees.

In March 2004, in an effort to stimulate the insurance industry and
reinforce Bahrain's position as a major insurance center in the Middle
East, the BMA lifted the requirement that foreign insurance brokers and
loss adjusters must have a local partner in order to operate. These
firms, which were previously required to have at least 51 percent
Bahraini-ownership, are now permitted to operate with 100 percent
foreign-ownership. The BMA is holding consultations on further reform in
areas such as captive insurance, solvency, business conduct, risk
management and financial crime, enforcement, BMA reporting and public
disclosure, intermediaries, and Islamic insurance

## Foreign-Exchange Controls [**Return to top**](#ch7)

There are no foreign exchange controls or other obstacles to the free
movement of funds.

## U.S. Banks and Local Correspondent Banks [**Return to top**](#ch7)

**Citibank/Citicorp**\
P.O. Box 548\
Manama, Kingdom of Bahrain\
Tel: +(973) 17-588588\
Fax: +(973) 17-588595\
Citibank operates as a full commercial bank, OBU, representative office,
and as an Islamic-banking subsidiary.

**J P Morgan Chase**\
P.O. Box 368\
Manama, Kingdom of Bahrain\
Tel: +(973) 17-535388\
Fax: +(973) 17-535135\
Chase operates as an offshore bank.

**Merrill Lynch International Bank**\
P.O. Box 10399\
Manama, Kingdom of Bahrain\
Tel: +(973) 17-530260\
Fax: +(973) 17-530245\
Merrill Lynch operates as an investment bank.

## Project Financing [**Return to top**](#ch7)

For major infrastructure investments, Bahrain\'s onshore and offshore
banks have extensive experience with syndicated loans for larger risks.
The Bahrain Development Bank (BDB) promotes industrial development in
Bahrain. It also lends funds in some cases to local projects it
considers appropriate, but funding is not limited to projects of
Bahraini-owned companies. It is allocated on market terms and is
available to foreign investors. Generally, credit terms are variable,
but usually are limited to 10 years with a maximum grace period of 2
years.

## Web Resources [**Return to top**](#ch7)

Export-Import Bank of the United States

<http://www.exim.gov/>

Country Limitation Schedule

<http://www.exim.gov/tools/country/country_limits.html>

Overseas Private Investment Corporation (OPIC)

<http://www.opic.gov/>

Trade and Development Agency

<http://www.tda.gov/>

SBA\'s Office of International Trade

<http://www.sba.gov/oit/>

USDA Commodity Credit Corporation

<http://www.fsa.usda.gov/ccc/default.htm>

U.S. Agency for International Development

[http://www.usaid.gov](http://www.usaid.gov/)

Bahrain Development Bank (BDB)

<http://www.bdb-bh.com/background.htm>

[Return to table of contents](#doing-business-in-bahrain)

[[]{#ch8 .anchor}Return to table of
contents](#doing-business-in-bahrain)

# Chapter 8: Business Travel

-   [Business Customs](#business-customs-return-to-top)

-   [Travel Advisory](#travel-advisory-return-to-top)

-   [Visa Requirements](#visa-requirements-return-to-top)

-   [Telecommunications](#telecommunications-return-to-top)

-   [Transportation](#transportation-return-to-top)

-   [Language](#language-return-to-top)

-   [Health](#health-return-to-top)

-   [Local Time, Business Hours and
    Holidays](#local-time-business-hours-and-holidays-return-to-top)

-   [Temporary Entry of Materials and Personal
    Belongings](#temporary-entry-of-materials-and-personal-belongings-return-to-top)

-   [Web Resources](#web-resources-return-to-top-4)

## Business Customs [**Return to top**](#ch8)

Personal contact, frequently renewed, is key to doing business
successfully in Bahrain. Visiting business professionals should be
prepared to spend a portion of any business call socializing and getting
to know their counterparts.

Most government offices operate Saturday through Wednesday, and many
companies are also open half-days on Thursdays. Most commercial banks
are open Saturday through Thursday. Employees of offshore financial
institutions often follow a more Western workweek.

## Travel Advisory [**Return to top**](#ch8)

<http://travel.state.gov/travel/warnings_consular.html>

## Visa Requirements [**Return to top**](#ch8)

Entry visas for American citizens may be obtained upon arrival at the
Bahrain International Airport. U.S. holders of regular passports can
obtain a two-week visa at the airport for 5 BD (\$13) payable in
Bahraini Dinars only. Entry visas can also be obtained from the Bahraini
Embassy in Washington, D.C., where a 5-year visa costs \$50.

The General Directorate for Immigration and Passports developed a
custom-made, user-friendly electronic visa website. The website aims to
speed the airport\'s visa processing method and also to attract tourists
through this simplified and accessible method. For more information,
please visit: www.immigration.gov.bh/english/index-1.htm.

An Israeli entry stamp in a passport is not a bar to obtaining a
Bahraini visa or to entering Bahrain, but not all airline personnel are
aware that the former prohibition no longer applies.

Crime is generally not a problem in Bahrain. In the past there have been
occasional minor civil disturbances in various parts of the country. The
U.S. Embassy advises American citizens to avoid any disturbances or
large gatherings in the streets, and to avoid travel into villages, if
it is not necessary. Americans in Bahrain, as elsewhere, should maintain
a high level of security awareness while following their daily business
or social routines in light of the global threat of terrorism. For
regularly updated security more information, please visit the U.S.
Embassy Bahrain\'s website at <http://www.usembassy.gov.bh/>

U.S. Companies that require travel of foreign businesspersons to the
United States should allow sufficient time for visa issuance if
required. Visa applicants should go to the following links.

State Department Visa

<http://travel.state.gov/visa/index.html>

United States Visas.gov

<http://www.unitedstatesvisas.gov/>

Consular Section, U.S. Embassy Bahrain
<http://www.usembassy.gov.bh/Section/CONS/html/index.asp>

Bahrain E-Visa Services

<http://www.evisa.gov.bh/>

Immigration and Passports Directorate, Ministry of Interior

<http://www.immigration.gov.bh/>

## Telecommunications [**Return to top**](#ch8)

Hotel accommodations are excellent, with a large selection of five-star
hotels available. All hotels are equipped with reliable phone and fax
service, and many hotels also provide Internet, wire services, and
business and conference centers.

The majority state-owned Bahrain Telecommunications Company (Batelco)
provides excellent telecommunications services for all sectors of the
economy.

Telecommunications services in Bahrain employ fully digitized systems
and state-of-the-art technology. Services provided by Batelco include
direct dialing and fax transmission to almost anywhere in the world, GSM
mobile telephony, high-speed data circuits, integrated service digital
networks (ISDN), and corporate messaging facilities. In a move to
liberate the telecommunications sector, the Government of Bahrain in
April 2003 awarded a 15-year mobile telecommunications license to
MTC-Vodafone. MTC-Vodafone (a consortium owned by UK\'s Vodafone and
Kuwaiti and Bahraini investors) began operations in late 2003, and in
April 2004 announced that it had captured 10 percent of Bahrain's mobile
market with plans to dominate 30 percent by the end of the year. In
light of the high mobile penetration in Bahrain (78 percent), and the
growth in mobile customers after the introduction of competition,
Batelco announced plans in June to invest \$23.9 million in the
company's mobile network, increasing its mobile line capacity to over
550,000. As of July 2004, Batelco remains the sole Internet service
provider (ISP) in Bahrain, offering dial-up access via 56K modem or ISDN
lines. In April, Batelco completed an expansion that doubled the
company's Internet bandwidth speed to 400 mega bits per second,
representing a major performance improvement to the national data
network.

The Telecommunications Regulatory Authority (TRA), established in late
2002, awarded the second mobile telecommunications services license to
MTC-Vodafone, thus ending the monopoly of Bahrain\'s telecom services
provider, Batelco. The license was awarded under the Telecommunications
Law, which took effect January 2003.

Telecommunications liberalization also extended to paging services, very
small aperture terminal (VSAT), public access mobile radio services,
international telecommunications facilities, international
telecommunications services, national fixed services, internet service
provider (ISP) and value-added services license following the full
liberalization of the sector on July 1, 2004.

As of December 2004, the TRA announced the provision of three
International Telecommunications Facility licenses (IFLs), five
International Telecommunications Services Licenses (ISLs), five VSAT
licenses, fifteen value-added Services (VAS) \"Class\" licenses and
eight Internet Service Provider (ISP) licenses.

For a listing of companies that have been granted licenses to operate in
the Kingdom of Bahrain, or more information on the Telecommunication
Regulatory Authority's regulations and services, please visit the
Telecommunication Regulatory Authority's (TRA) webpage,
[www.tra.org.bh](http://www.tra.org.bh/).

## Transportation [**Return to top**](#ch8)

Bahrain has a well-developed road network. Well-lit, multi-lane highways
cover the country. The 25-kilometer Bahrain-Saudi Causeway, which opened
in November 1986, created many new commercial opportunities.
Construction has begun on a network of futuristic superhighways with a
series of flyovers to eliminate bottlenecks. These superhighways are
part of a \$530.9 million master plan to improve the country's road
network. The North Manama Corridor Improvement Plan involves the
construction of the Seef and Pearl flyovers in Manama (\$26 million).

Rental cars are readily available, but an International Driving License
is required and must be validated in Bahrain. Major car rental firms
will help qualified clients obtain a temporary Bahraini driving license.
Cabs are easy to find in downtown Manama. There is also a reliable
telephone metered taxi service, telephone +(973) 17-682-999 for return
transportation from less central locations. Most major roads are three
to six-lanes and are well maintained. In the older parts of Manama,
Muharraq, and in villages, many streets are narrow, twisting, and
sometimes in relatively poor condition. Traffic is congested in some
areas of Manama and the Seef Mall. Drivers should exercise caution at
the roundabouts (traffic circles) found at many major intersections.
Radar and speed detection cameras are installed near some traffic
lights. Travel at night is more hazardous. Defensive driving is
recommended.

Ministry of Transportation

<http://www.transportation.gov.bh/>

## Language [**Return to top**](#ch8)

English is widely spoken in Bahrain in various Bahraini government
sectors and the business sector.

## Health [**Return to top**](#ch8)

Bahrain has a modern health system. All Bahrainis receive free state
health care. Most companies offer their expatriate workers some sort of
health coverage, either through insurance companies, in which case rates
are negotiable, or through arrangements with one or more of the local
private hospitals. There is a \$8 fee for expatriates attending an
emergency clinic in a government hospital.

Hospitals, clinics, and pharmacies\--including several 24-hour
pharmacies\--are widely available and of high quality. Certain
pharmaceutical products may be unavailable, or sold under a European
name. Medial Insurance: The Department of State strongly urges U.S.
citizens to consult with their medical insurance company prior to
traveling abroad to confirm whether their policy applies overseas and
whether it will cover emergency expenses such as medical evacuation.

Other Health Information: Information on vaccinations and other health
precautions, such as safe food an water precautions and insect bite
protection, may be obtained from the Centers of Disease Control an d
Prevention's hotline for international travelers at 1-877-FYI-TRIP
(1-877-394-8747; fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC's
internet site at <http://www.cdc.gov/travel>. For information about
outbreaks of infectious diseases abroad consult the World Health
Organization's (WHO) website at <http://www.who.int/en>. Further health
information for travelers is available at <http://www.who.int/ith>.

Bahrain Ministry of Health (MOH) website, <http://www.moh.gov.bh/>

## Local Time, Business Hours, and Holidays [**Return to top**](#ch8)

Bahrain is seven hours ahead of Eastern Standard Time (or eight hours
ahead of Eastern Daylight Savings Time).

The private sector normally operates from 8:00 a. m. -- 5:00 p.m.,
Saturday-Wednesday. Financial institutions operate from 8:30 a.m. --
5:30 p.m., Sunday-Thursday. The public sector operates from 7: 15 a.m.
-- 2:15 p.m., Saturday-Wednesday.

# The private sector follows the [**Bahrain Chamber of Commerce and Industry's (BCCI)**](http://www.bahrainchamber.org.bh/) local, national, and religious observations. Financial institutions follow the Bahrain Monetary Agency (BMA), and the public sector follows the GOB's local and religious holiday observations.

#  

# U.S. Embassy, Bahrain 2005 Holiday Schedule 

# 

# 

> January 1, Saturday New Year's Day Observed
>
> January 15, Saturday Martin Luther King, Jr. Birthday Observed
>
> January 20 -22
>
> Thursday - Saturday Eid Al-Adha\*
>
> February 12 Al Hijra, Islamic New Year\*
>
> Saturday
>
> February 18-19 Ashoora\*
>
> Friday -- Saturday
>
> April 21, Thursday Prophet Mohammed's Birthday\*
>
> May 01, Sunday Labor Day
>
> May 28, Saturday Memorial Day
>
> July 2, Saturday Independence Day
>
> September 3, Saturday Labor Day (US)
>
> October 8, Saturday Columbus Day
>
> November 3-5
>
> Thursday-Saturday Eid Al Fitr\*

November 12, Saturday Veterans Day

> November 26, Saturday Thanksgiving Day
>
> December 16 -- 17
>
> Friday -- Saturday Bahrain National Day\*\*
>
> December 24, Saturday Christmas Day

\* Local religious holidays are governed by the lunar calendar and are
[subject to change]{.underline}. The Government of Bahrain will announce
exact dates.

Business travelers to Bahrain seeking appointments with U.S. Embassy
Bahrain officials are encouraged to schedule an appointment with the
Commercial Section prior to departure from the U.S. The [Commercial
Section](http://www.buyusa.gov/bahrain) may be reached by telephone at
+(973) 17-242746, fax at +(973) 17-256717, or e-mail
<Bahrain.office.box@mail.doc.gov>

## Temporary Entry of Materials and Personal Belongings [**Return to top**](#ch8)

The Bahrain International Airport has no restrictions or temporary entry
of personal electrical equipment such as laptops, software, or exhibit
materials.

Civil Aviations Directorate and Bahrain International Airport

<http://www.bahrainairport.com/index_web.htm>

## Web Resources [**Return to top**](#ch8)

U.S. State Department Travel Advisory

<http://travel.state.gov/travel/warnings_consular.html><http://www.usembassy.gov.bh/>

State Department Visa

<http://travel.state.gov/visa/index.html>

United States Visas.gov

<http://www.unitedstatesvisas.gov/>

Consular Section, U.S. Embassy Bahrain
<http://www.usembassy.gov.bh/Section/CONS/html/index.asp>

Bahrain E-Visa Services

<http://www.e-visa.gov.bh/>

Immigration and Passports Directorate, Ministry of Interior

<http://www.immigration.gov.bh/>

Civil Aviations Directorate and Bahrain International Airport

<http://www.bahrainairport.com/index_web.htm>

Telecommunication Regulatory Authority's (TRA)

<http://www.tra.org.bh/>

Ministry of Transportation

<http://www.transportation.gov.bh/>

Centers of Disease Control and Prevention

<http://www.cdc.gov/travel>.

World Health Organization's (WHO) Infectious Disease Outbreaks
<http://www.who.int/en>

World Health Organization's (WHO) Traveler Health Information

<http://www.who.int/ith>

Bahrain Ministry of Health (MOH)

<http://www.moh.gov.bh/>

Commercial Section, U.S. Embassy Bahrain

<http://www.buyusa.gov/bahrain>

[Return to table of contents](#doing-business-in-bahrain)

[Return to table of contents](#doing-business-in-bahrain)

# Chapter 9: Contacts, Market Research, and Trade Events

-   [Contacts](#contacts-return-to-top)

-   [Market Research](#market-research-return-to-top)

-   [Trade Events](#trade-events-return-to-top)

## Contacts [**Return to top**](#chapter-9-contacts-market-research-and-trade-events)

######## U.S. Government Websites

Commercial Section, U.S. Embassy Bahrain

<http://www.buyusa.gov/bahrain>

U.S. Embassy, Bahrain

<http://www.usembassy.gov.bh/>

U.S. International Trade Administration (ITA)

<http://www.ita.doc.gov/>

U.S. Commercial Service

<http://www.export.gov/comm_svc/>

Department of Commerce

<http://www.export.doc.gov/>

Department of Energy

<http://www.energy.gov/>

Export-Import Bank

<http://www.exim.gov/>

Overseas Private Investment Corporation

<http://www.opic.gov/>

Small Business Administration

<http://www.sba.gov/>

Department of State

<http://www.state.gov/>

U.S. Trade and Development Agency

<http://www.tda.gov/>

Department of Transportation

<http://www.dot.gov/>

Department of the Treasury

<http://www.treasury.gov/>

United States Trade Representative (USTR)

[www.ustr.gov](http://www.ustr.gov/)

Agriculture Trade Office (ATO), Embassy of the United States of America
in Dubai, U.A.E.

<http://www.usembabu.gov.ae/atodubai.htm>

Foreign Agriculture Service (FAS), U.S. Department of Agriculture

<http://www.fas.usda.gov/>

######## 

########  

######## Government of Bahrain Websites

Government of Bahrain (GOB)

<http://www.bahrain.gov.bh/>

Ministry of Commerce (MOC)

<http://www.commerce.gov.bh/>

Ministry of Industry (MOI)

<http://www.industry.gov.bh/>

Bahrain Economic Development Board (EDB)

<http://www.bahrainedb.com/>

Ministry of Finance (MOF)

<http://www.mofne.gov.bh/>

Bahrain Monetary Agency (BMA)

<http://www.bma.gov.bh/>

Ministry of Transportation (MOT)

(covers public transportation, telecommunications, postal services, and
civil aviation )

<http://www.transportation.gov.bh/>

Telecommunication Regulatory Authority (TRA)

<http://www.tra.org.bh/>

Bahrain Internet Exchange (BIX)

<http://www.bix.bh/>

Ministry of Municipalities and Agriculture (MOMA)

<http://www.municipality.gov.bh/>

Bahrain Tenders Board

<http://www.bahraintenders.gov.bh/>

Bahrain Tourism Directorate

<http://www.bahraintourism.com/>

Bahrain International Circuit (BIC)

<http://www.bahraingp.com.bh/>

Bahrain Convention and Exhibition Center (BCEB)

<http://www.bahrainexhibitions.com/>

Survey and Land Registration Bureau

<http://www.slrb.gov.bh/>

Immigration and Passport Directorate, Ministry of Interior (MOI)

<http://www.immigration.gov.bh/>

General Traffic Directorate

<http://www.traffic.gov.bh/>

Civil Aviations Directorate and Bahrain International Airport

<http://www.bahrainairport.com/index_web.htm>

Bahrain Ports Directorate

<http://www.bahrainports.gov.bh/>

Bahrain Customs Directorate

<http://www.bahriancustoms.gov.bh/>

Bahrain E-Visa Services

<http://www.evisa.gov.bh/>

Shura or Consultative Council (Upper House of the National Assembly)

<http://www.shura.gov.bh/>

Al Nuwab or Council of Representative (Lower House of the National
Assembly)

<http://www.nuwab.gov.bh/>

Legal Affairs Directorate

<http://www.bahrain.gov.bh/legalaffairs/>

Ministry of Education (MOE)

<http://www.education.gov.bh/>

Ministry of Labor (MOL)

<http://www.bah-molsa.com/>

Pension Fund Commission (PFC)

(Public Sector Retirement Planning Commission)

<http://www.pfc.gov.bh/>

General Organization for Social Insurance

(Private Sector Retirement Planning Organization)

<http://www.gosi.org.bh/>

Bahrain Center for Studies and Research (BCSR)

<http://www.bcsr.gov.bh/>

Bahrain Civil Service Bureau (CSB)

<http://www.csb.gov.bh/>

University of Bahrain (UoB)

<http://www.uob.bh/>

Bahrain Training Institute (BTI)

<http://www.bti.com.bh/>

######## 

Bahrain Internet

<http://www.inet.com.bh/>

Bahrain Television (BTV)

<http://www.bahraintv.com/>

**Private Sector**

Akhbar Al Khaleej Newspaper

<http://www.akhbar-alkhaleej.com/>

Al Ayam Newspaper

<http://www.alayam.com/>

Al Wasat Newspaper

<http://www.alwasatnews.com/>

Al Meethaq Newspaper

[www.almeethaq.net](http://www.almeethaq.net/)

Gulf Daily News (GDN)

<http://www.gulf-daily-news.com/>

Bahrain Tribune (BT)

<http://www.bahraintribune.com/>

Arabian Exhibition Management (AEM)

<http://www.aeminfo.com.bh/>

Reflections

[http://www.reflectionsbh.com](http://www.reflectionsbh.com/)

AIFG/International Fairs Group

[http://www.amadeusifg.com](http://www.amadeusifg.com/)

Mice Management W.L.L.

<http://www.mice-management.com/>

Hilton Hotel

<http://www.hilton.com/>

Diplomat Radisson SAS Hotel

<http://www.diplomatrdsas.com.bh/>

Regency Intercontinental Hotel

[www.intercontinental.com/manama](http://www.intercontinental.com/manama/)

Sheraton Hotel

<http://www.sheraton.com/bahrain>

Gulf Hotel

<http://www.gulfhotelbahrain.com/>

Crowne Plaza Hotel

<http://www.crowneplaza-bahrain.com/>

Ritz Carlton Hotel

<http://www.ritzcarlton.com/>

Movenpick Hotel

<http://www.moevenpick-group.com/>

Novotel Hotel

<http://www.novotel.com/>

Aluminum Bahrain (Alba)

<http://www.albasmelter.com/>

Bahrain Telecommunications (Batelco)

<http://www.batelco.com/>

MTC-Vodafone Bahrain

<http://www.mtc-vodafone.com.bh/>

Bahrain Financial Harbour (BFH)

<http://www.bfharbour.com/>

For more information, please contact the [Commercial Section, at the
U.S. Embassy in Bahrain](http://www.buyusa.gov/bahrain).

## Market Research [**Return to top**](#chapter-9-contacts-market-research-and-trade-events)

To view market research reports produced by the U.S. Commercial Service
please go to the following website:
[http://www.export.gov/marketresearch.html](http://www.export.gov/marketresearch.html )
and click on Country and Industry Market Reports.

Please note that these reports are only available to U.S. citizens and
U.S. companies. Registration to the site is required, but free of
charge.

## Trade Events [**Return to top**](#chapter-9-contacts-market-research-and-trade-events)

Please click on the links below for information on upcoming trade
events.

U.S. Government Export Portal

<http://www.export.gov/tradeevents.html>

Commercial Section, U.S. Embassy Bahrain

<http://www.buyusa.gov/bahrain>

[Return to table of contents](#doing-business-in-bahrain)

[[]{#ch10 .anchor}Return to table of
contents](#doing-business-in-bahrain)

# Chapter 10: Guide to Our Services

The U.S. Commercial Service offers customized solutions to help your
business enter and succeed in markets worldwide. Our global network of
trade specialists will work one-on-one with you through every step of
the exporting process, helping you to:

-   Target the best markets with our world-class research

-   Promote your products and services to qualified buyers

-   Meet the best distributors and agents for your products and services

-   Overcome potential challenges or trade barriers

For more information on the services the U.S. Commercial Service offers
U.S. businesses, please click on the link below.

Commercial Section, U.S. Embassy Bahrain's webpage:
<http://www.buyusa.gov/bahrain>.

[Return to table of contents](#doing-business-in-bahrain)

## U.S. exporters seeking general export information/assistance or country-specific commercial information should consult with their nearest Export Assistance Center or the U.S. Department of Commerce\'s Trade Information Center at (800) USA-TRADE, or go to the following website: [http://www.export.gov]()  To the best of our knowledge, the information contained in this report is accurate as of the date published. However, The Department of Commerce does not take responsibility for actions readers may take based on the information contained herein. Readers should always conduct their own due diligence before entering into business ventures or other commercial arrangements. The Department of Commerce can assist companies in these endeavors.