Businesses operating in Bahrain enjoy significant cost advantages, with annual operating costs up to 69 per cent lower in logistics and 41pc lower in manufacturing compared to other GCC nations, according to EY’s ‘Cost of Doing Business in the GCC’ reports.
The in-depth study, conducted by EY’s US office, identified Bahrain International Investment Park and Bahrain Logistics Zone as the most cost-competitive special economic zones (SEZs) in the GCC for manufacturing and logistics operations.
The reports analysed direct and indirect annual costs, including office space, labour, transport, taxes, utilities, and licensing, across Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
Strategically positioned at the heart of the Gulf, Bahrain has prioritised cost competitiveness to attract foreign investment. This focus, coupled with infrastructure development and talent upskilling, has solidified Bahrain’s position as a trusted investment destination. This investor confidence is reflected in the kingdom’s FDI Stock Relative to GDP, which stood at 93.6pc in 2023, more than double the global average.
Ali Al Mudaifa, chief of business development at the Bahrain Economic Development Board (Bahrain EDB), highlighted the region’s growth potential, stating: “The Gulf region continues to attract investments driven by ambitious growth visions.”
He emphasised Bahrain’s role as a trading hub, offering substantial savings in various operational areas. Notably, port storage costs are up to 52pc more competitive, and annual labour costs are significantly lower than the GCC average.
“The kingdom’s competitive advantages, favourable tax environment, and agile regulatory policies underscore a steadfast commitment to fostering a seamless and business-friendly investment environment,” Mr Al Mudaifa added.
Andrew Phillips, partner/principal and co-leader of quantitative economics and statistics (QUEST) at EY, said: “For manufacturing and logistics firms eyeing the region in search of a competitive cost environment, our sector reports determined that the island nation is the most cost-competitive across the Gulf special economic zones we analysed.”
He cited attractive labour, real estate, and utility costs, along with a low cost of living, as key factors.
Bahrain’s strategic location further enhances its appeal, especially for road transport, with companies saving up to 71pc on shipping to Dammam and Riyadh. Coupled with the fastest customs clearance times and shortest transit routes, the kingdom is emerging as the Gulf’s most efficient logistics gateway.
Global giants like DHL, FedEx, DSV, Mondelez, and Arla have successfully leveraged Bahrain’s advantages, establishing significant operational bases and benefiting from cost efficiencies, logistical advantages, and a skilled talent pool.
avinash@gdnmedia.bh
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