By Moustafa Daly
Bahrain, the small island nation of the Persian Gulf, has a rich but heavily oil-dependent economy. Much like its wealthy neighbors of Saudi Arabia, UAE, and Qatar, its government is seeking to lessen the economy’s dependency on oil by boosting its industrial and commercial sectors, among other measures.
This is where the recently-launched ‘golden license’ comes in. Announced by Bahrain’s cabinet, the new program targets companies and institutions pumping sizable investments into the kingdom.
As outlined by the government, the golden license will give its holders prioritized allocation of land for their projects including quick and easy access to infrastructure and utilities links, as well as easy and hassle-free access to government services and development funds.
Notably, the license will grant its holders the ability to review laws relevant to their businesses and suggest enabling policies relevant to their industries. Entities with the license will also gain access to simplified visa processes for their foreign workers.
Coming with a hefty price tag, the golden license is reserved for businesses that intend to invest at least $50 million in the kingdom, creating more than 500 jobs.
Bahrain’s golden license seeks to leverage free trade agreement with U.S.
The investment initiative, according to Dominic Volek, Dubai-based group executive committee member and group head of private clients at Henley & Partners, is designed to position Bahrain to leverage its free trade agreement with the U.S.
“It’s possibly part of the wider capital attraction strategy of Bahrain but it’s geared towards legal persons and/or entities, not necessarily individuals and/or families,” he says.
In effect since 2006, the free trade agreement between the US and Bahrain effectively removed 100% of tariffs on goods traded between the two countries, putting Bahrain in an advantageous export position should it be able to increase its industrial capacities.
With its main FDI investor countries being neighboring Saudi Arabia and the UAE – none of which have free trade agreements with the U.S., the golden license could be particularly attractive to investors from the region seeking to trade with the U.S.
Also, Bahrain is an island with its only land connection being the King Fahd Causeway, which connects it to mainland Saudi Arabia – the Middle East’s biggest economy with which Bahrain also has free trade access. Investors from the region and globally could seek to leverage this advantageous access to the Saudi market by pursuing a golden license.
Competition for talent and funds is intensifying in the Middle East
Globally, governments are becoming increasingly competitive in designing policies that aim to attract foreign capital and talent to their markets. The Middle East is no different; as the oil-rich region seeks to diversify their economies; its governments are racing to introduce investment and migration friendly policies.
In 2019, the UAE launched its golden visa program before overhauling it and simplifying application process in 2022. The program has been quite successful, with over 80,000 golden visas issued in 2022 alone. The success of the program has inspired Kuwait to launch its own investment visa program in February 2023.
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