Last updated: December 17, 2019

The Kingdom of Bahrain is an island nation between Saudi Arabia and Qatar. The country has around 1.4 million inhabitants, around half of whom are foreigners. The area of ​​760 square kilometers – roughly the size of Hamburg – is predominantly characterized by deserts. Only the northern coastal strip can be used for agriculture.

Bahrain is a member of the UN, the Arab League, the Gulf Cooperation Council, the Organization of Arab Petroleum Exporting Countries (OAPEC), the World Trade Organization (WTO) and a founding member of the International Renewable Energy Agency (IRENA) created in 2009.

Since 1999 the country has been ruled by Hamad bin Isa Al Khalifa, only the second head of state since Bahrain gained independence in 1971. A constitutional reform officially made the emirate a kingdom in 2002.

Bahrain is one of the most liberal economies in the world today. The openness of the Bahraini market, the proximity to the other important markets in the region as well as good investment conditions and infrastructure make the country an attractive location for foreign companies. Compared to its neighboring countries, Bahrain has only small oil and gas reserves. Nevertheless, oil and gas exports are still the most important source of income for the state. The ongoing restructuring of the economy and industry within the framework of the Economic Vision 2030is intended to compensate for the strong dependence on oil and gas exports and create new jobs for the young population. Aluminum production and the textile industry make up the largest part of the industrial sector. German companies mainly export motor vehicles and motor vehicle parts, machines, chemical products and electrical engineering to Bahrain.

Bahrain has a strong service sector. Its share of GDP is over 60 percent. With over 170 banks and other financial institutions, the kingdom is the leading center in Islamic finance. In the ease-of-doing business-Index of the World Bank, Bahrain ranks third among all Arab countries in 2019 after the UAE and rising Morocco, and in terms of taxes, as in the previous year, fifth among all 190 countries examined worldwide. Furthermore, a steady improvement is achieved through reforms of the regulation of companies. One of the main goals of economic policy is to develop Bahrain into the regional market leader in the financial and service sectors. The central location in the Gulf region and the short distances within the country make Bahrain an ideal hub for doing business with the large Asian market.

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