Bahrain pitches agility as Gulf investment competition intensifies

Bahrain is trying to win investment by selling itself as a fast-moving, specialized base rather than a Gulf heavyweight. H.E. Noor bint Ali Alkhulaif, chief executive of the Bahrain Economic Development Board, told Fortune that the kingdom is focusing on areas where its size, rules and workforce can give it an edge.

The EDB promotes five sectors: financial services, manufacturing, logistics, tourism and information and communications technology, according to the agency. Alkhulaif, who also serves as minister of sustainable development, told Fortune that Bahrain reviews subsectors within those fields as market conditions change.

Financial services have become central to that pitch. Fortune reported that the sector overtook oil as Bahrain’s largest contributor to real GDP in the third quarter of 2025 and accounted for 17.6% of GDP in 2025.

The EDB is seeking more wealth and asset management business and wants to attract family offices from Europe, Asia and markets with established ties to Bahrain, according to Fortune. The board attended the Milken Institute’s annual conference in Los Angeles in May to meet high-net-worth investors.

Finance and technology lead the pitch

Bahrain has changed trust laws, residency programs and financial rules over the past year after studying wealth hubs including Jersey, Guernsey, Switzerland and Singapore, Fortune reported. The kingdom has also used its financial regulatory record as a selling point, including its 2017 launch of the Gulf’s first regulatory sandbox for fintech companies.

Fortune reported that Bahrain has moved early on open banking, crypto rules and stablecoin legislation. Alkhulaif told Fortune that global banks may still place headquarters in the UAE or Saudi Arabia, but Bahrain is pitching itself as a place to build digital banking and fintech services under rules that differ from the rest of the Gulf.

Amazon Web Services is also part of Bahrain’s technology strategy. Fortune reported that AWS operates two Cloud Innovation Centers in Bahrain, making it the only country outside the United States to host more than one, and has supported AI and digital training programs in the kingdom.

Alkhulaif told Fortune that Bahrain is discussing with AWS how to expand the company’s AI presence in the country and use it to serve the wider region. She said AWS had told officials that Bahraini institutions showed the strongest regional interest in AI among its services.

Bahrain’s data rules are another part of that effort. In 2018, the kingdom introduced a Data Embassy law that lets foreign institutions store data in Bahrain while keeping it under their home country’s legal jurisdiction, Fortune reported.

Regional conflict tests resilience

Recent attacks have shifted some discussions from data sovereignty toward resilience, Alkhulaif told Fortune. Reuters reported that in early March two AWS data centers in the UAE were hit by drones, while a Bahrain facility was damaged by a nearby strike.

Those incidents took the three sites offline and disrupted services including banking, payments, delivery platforms and enterprise software across the region, according to Fortune. AWS moved workloads to other regions and warned that repairs would take time because of physical damage, Data Centre Magazine reported.

The EDB told Fortune that investor interest in Bahrain has remained relatively firm despite the Iran war. Alkhulaif said investments already in progress largely continued, though she acknowledged pressure on tourism and manufacturing tied in part to logistics and shipping routes.

Manufacturing and trade deals add targets

Manufacturing remains a core EDB focus, especially for U.S. investors, Fortune reported. Bahrain International Investment Park and Bahrain Investment Wharf already host companies including Mondelēz, BASF, Arla and Reckitt.

Planned industrial areas include the U.S. Trade Zone and an Aluminum Downstream Cluster, according to Fortune. The U.S. Trade Zone is intended to support manufacturing and logistics and offer U.S. firms customs-duty exemptions on imported raw materials, spare parts, manufacturing inputs and construction machinery.

The EDB is also preparing for the U.K.-GCC free trade agreement, which Fortune reported was signed in May after four years of talks. A U.K. government summary said total U.K.-GCC trade is £53 billion, or about $71 billion, and could rise by 19.8% annually under the agreement.

Alkhulaif told Fortune that Bahrain sees possible cooperation with U.K. companies in aluminum, manufacturing, energy, life sciences and healthcare. She said discussions have started on helping U.K. firms establish operations, run trials and testing, and support startups and scale-ups.

Fortune reported that about 85% of Bahrain’s GDP now comes from the non-oil economy. Alkhulaif said the EDB remains tied to Vision 2030 but has begun discussing Vision 2050, with a greater emphasis on raising the value of the economy and improving productivity.

This story draws on original reporting from Fortune.