On Thursday 29th November 2019 the Arab British Chamber of Commerce held a business seminar to focus on Opportunities in Bahrain.
The event, held in the auditorium at the Chamber, attracted upwards of a hundred business executives and investors keen to learn more about the latest opportunities for doing business in Bahrain and looking to export their goods and services to this small but lucrative Gulf market. The Kingdom of Bahrain is a strategic hub offering access to a $1.5 trillion market in the Gulf.
Opening the event, Mr Abdeslam El-Idrissi, Director of Trade Services and Acting General Manager, ABCC, remarked how Bahrain had been first in the region on several levels, notably in its discovery of oil and in the introduction of a modern banking system. The market provided an open door to investing in the Gulf and MENA region more generally.
The first speaker, Emma Parsons, Regional Manager UK & Ireland, Economic Development Board Bahrain, spoke of the Kingdom’s impressive record of achievement which she had witnessed over the past five years while working for the EDB.
Outlining the main features of the market, Ms Parsons described a small but fast growing population of 1.5 million that was young and well educated. English was the main language of business and Bahrain’s business friendly environment continued to attract increasing levels of inward investment. The key to its success had been its diversification.
Bahrain was a leader of financial services in the Gulf and by setting up Bahrain FinTech Bay the Kingdom was aspiring to become a hub for fintech in the MENA region.
Recent improvements in the Bahrain infrastructure included the causeway linking it to Saudi Arabia. Bahrain was now connected to the world by its free trade agreements.
The country’s people were regarded as an important natural resource and were accordingly skilled and educated. Within financial services, 65% of those employed were Bahraini nationals and a third of the total were women.
Turning to what Bahrain can offer the investor, Ms Parsons stressed that it had been classed as the top country for expatriate living due to its high quality of life. Its open and liberal market provided for 100% foreign ownership in most sectors. Local partners were not essential given that the whole of Bahrain had the status of a free zone.
There were numerous opportunities for UK investors, said Ms Parsons, mentioning energy, real estate, retail and the entertainment industry. In April 2018 Bahrain announced that it had made the largest oil and gas discovery since the 1930s, which would mean more resources for the future.
Mr Wedad Kurukgy, Export Finance Manager, UK Export Finance, began by echoing the previous speaker’s view that Bahrain’s exceptional hospitality made it a great place to do business.
He briefly explained the role of UKEF and how it can offer financial support British businesses overseas stating that £3bn was available in cover for UK companies involved in Bahrain urging more UK firms to make use of it.
UKEF, he stressed, does not compete with the banking industry and so only gets involved in projects where banks are unable to provide cover. Its support reaches up to 80% of the value of a project.
Working through the Department for International Trade, UKEF has offices across the country. Support is available for large corporates and for SMEs as there is no minimum or maximum limit.
UKEF provides essential finance to UK exporters to capture overseas markets by helping them to access working capital required to complete a contract. Finally, Mr Kurukgy stressed that UKEF supports exporters of services, such as consultancies, as well as suppliers of goods.
Jo Purves, Pro Vice-Chancellor for international and Regional Partnerships, University of Salford, began by remarking that education would be critical for Bahrain’s economic planning in years to come.
She explained that Salford had decided to get involved in the Kingdom because Bahrain wanted to form a partnership rather than simply to have an overseas branch of a British university.
Salford’s partnership with Bahrain had allowed it to open up the British University of Bahrain (BUB) which was a completely new university supported at the highest level in the Kingdom and receiving support from the EDB and the UK Department for International Trade. The university was officially opened by HRH The Duke of York and the Bahrain Ministry of Education. Beginning in September 2018, BUB had started to offer courses to Bahraini and Saudi students.
Ms Purves said that staff from Salford were seconded to teach in the new university while other staff were recruited locally. The courses were geared towards practical subjects most relevant to industry and for those working in the local economy. BUB had established strong strategic partnerships with some key corporations such as Batelco and BAE Systems.
Gareth Sean Kobrin, CEO, VATGlobal, the event’s corporate sponsor, briefed the audience on some of the implications of the introduction of VAT in Bahrain which comes into effect in January 2019 under the GCC agreement.
Mr Kobrin stated that firms had to establish whether they were required to register for VAT and needed to ensure that they were complying with the new law. It was a legal obligation for resident companies to do so.
At present local knowledge about VAT was lacking and Bahrain will therefore be needing more tax professionals to deal with the stringent compliance obligations required of businesses operating in the market. Mr Kobrin said that his company, VATGlobal, was well equipped to offer advice and provide solutions.
The final speaker, Mitesh Soni, Senior Director Innovation & Fintech, Finastra, looked at one of the key trends currently reshaping the global financial landscape, namely “fintech”.
He related the exciting innovations in the industry worldwide to what was happening in Bahrain which had become a leading player in the fintech sector. Finastra had recently joined Bahrain FinTech Bay with the aim of accelerating bank and fintech collaboration across the Middle East.
In relation to the future of banking, the introduction of new technology was enabling the complete transformation of how banking services were delivered to the customer.
The main business of the seminar concluded with comments and questions from members of the audience which ranged widely over matters such as data security, educational standards, advancing women in the finance sector and the need for greater awareness of the impact of VAT.
Mr Abdeslam El-Idrissi delivered apologies from the Rt Hon Baroness Symons and H E Shaikh Fawaz bin Mohammed Al Khalifa, the Bahrain Ambassador, who were both unable to attend. The formal event ended with a networking reception.