Doing Business with 
Bahrain

Preparing to export

Consultation and bespoke research

There is a range of online information for exporters including advice and guidance on how to thoroughly research overseas markets. Visit: https://www.great.gov.uk/ for more information.

Researching the market

You should make regular visits to Bahrain as well as making contact with others in your industry/sector. This will enable you to access the most up-to-date advice and information, and may lead to new insights or at the very least form the foundation for further research.

Visit: https://www.great.gov.uk for information and guidance on how to develop your marketing strategy, competitor and SWOT analyses and customer/market segmentation. The IOE&IT can also offer help with this. Visit: https://www.export.org.uk/.

You will need to determine whether there is a market for your product or service, if your pricing is competitive, whether you might need to change your product packaging or marketing, and whether to adapt your business model.

The questions listed here should help to focus your thoughts. Your answers to them will highlight areas for further research and also suggest a way forward that is right for your company. You may then want to use this as a basis for developing a formal strategy, although this may not be necessary or appropriate for all companies:

Your aims: Do you wish to buy from Bahrain, sell to Bahrain or both? Do you wish to establish your own company presence in Bahrain, or consider for example direct sales, licensing or franchising? Do you need to be involved in Bahrain at all? Do you see Bahrain as part of a wider plan including e.g. other GCC markets, now or in the future? Your company: Can you carry out a detailed SWOT analysis of your company? Are your competitors already in Bahrain? If so, what are they doing? Can you carry out a detailed SWOT analysis of your competitors? What are the Unique Selling Points (USPs) of your product or service? Do you know if there is a market for your product or service in Bahrain? Do you know if you can be competitive in Bahrain? Do you have the time and resources to handle e.g. the demands of communication, travel, product delivery and after-sales service? Your knowledge: Do you know how to secure payment for your products or service? Do you know how to locate and screen potential partners, agents or distributors? Have you carried out any Bahrain-specific customer segmentation, and do you know how to best reach potential customers in-market? It is unlikely that you will have the answers to all these questions at the outset and these ‘knowledge gaps’ could form the basis for further research and investigation. Some of these questions will require quantitative research in your sector, while others involve more contextual and cultural considerations.

Talking to other people in your industry and regularly visiting Bahrain will give you access to the most current advice and such experience can often lead to new insights and form the basis for further research.

Export plan

Following your initial research, you will need to create an export plan, identifying your best route to market. Guidance on developing an export plan, including marketing strategy, customer segmentation, competitor and SWOT analyses, etc. is available on the https://www.great.gov.uk/advice/create-an-export-plan/how-to-create-an-export-plan/ site, and also on the Institute of Export’s Open to Export site at: https://opentoexport.com/info/export-action-plan/.

One option to test how viable your product or service could be in the Bahrain market would be to attend trade shows held in Bahrain each year. The Department for International Trade (DIT) provides funding for eligible businesses in the form of grants to enable them to attend trade shows overseas via the Tradeshow Access Programme.

The funding helps your business to gather market knowledge, gain experience in attending and getting the most from overseas trade shows, and to receive advice and support from trade experts. Visit: https://www.gov.uk/guidance/tradeshow-access-programme for more information.

To discover future events and trade missions in Bahrain, visit the DIT events portal at: https://www.events.great.gov.uk/ehome/index.php?eventid=200183029&.

For company launches and events held at British Embassy and Consulate locations, contact the Department for International Trade (DIT) in Bahrain at: https://www.gov.uk/world/organisations/department-for-international-trade-bahrain#contact-us.

[Source – DIT, gov.uk]

 

Start-up considerations

Setting up a company or office in Bahrain

The Kingdom of Bahrain does permit 100% foreign ownership of businesses in most sectors, although you should check whether some sector and entity-specific restrictions apply. 

If you are setting up in Bahrain, you will need to register with the Bahrain Investors Centre (BIC) in Manama, to obtain official Commercial Registration (CR). You will need to renew your CR on an annual basis. See: http://www.bfharbour.com/news/bahrain-investors-center-open.

You are advised to speak to local lawyers and accountants to check which options best suit your business.

A list of English-speaking lawyers in Bahrain is available at: https://www.gov.uk/government/publications/bahrain-list-of-lawyers, or you can speak to the DIT team in Bahrain at: http://www.gov.uk/world/organisations/department-for-international-trade-bahrain#contact-us for assistance in locating potential lawyers and accountants.

Distributorship agreement

You can export directly to Bahrain, but it can be easier to work with a Bahraini partner or advisor, who will be more familiar with the business environment and will be able to:

• keep in contact with customers

• seek new business

• get information on the latest market trends

You should research a number of potential agents or distributors and visit the market a number of times to establish a personal relationship before choosing one. Look at their local reputation, marketing ability and resources, and be aware of agents who are promoting products or services which are the same or similar to yours.

The Department for International Trade (DIT) team in Bahrain at: http://www.gov.uk/world/organisations/department-for-international-trade-bahrain#contact-us can assist you in locating and meeting potential agents and distributors for your products in Bahrain.  

[Source – DIT Trade and Investment guide: Bahrain, gov.uk]

As an alternative to setting up an office in Bahrain, you may consider direct exports and sales, licensing or franchising for some products and services.

Direct exports and sales

Direct export means supplying your products or services directly to the customer and involves you taking care of the logistics of marketing, selling, sending overseas and getting paid. This could be an option if you are selling online or responding to enquiries from potential Bahrain purchasers.

Further information on selling directly overseas can be found at: https://www.great.gov.uk/advice/define-route-to-market/sell-overseas-directly/.

Online selling

The Department for International Trade (DIT) can help you export your goods to Bahrain through the E-Exporting Programme. Find out more at: https://www.gov.uk/guidance/e-exporting.

DIT has also negotiated listings at better-than-commercial rates. See online marketplaces in Bahrain at: https://www.great.gov.uk/selling-online-overseas/.

Licensing or franchising

Franchising is in demand in Bahrain, particularly in the restaurant, fast food and retail sectors, and licensing a product or service to be sold in Bahrain is a cheap way to enter the market as there are no set-up costs apart from the cost of a legal agreement.

However, you should undertake due diligence on licensees to ensure your Intellectual Property (IP) rights are fully protected. For further information about licensing IP, visit: https://www.gov.uk/guidance/licensing-intellectual-property.

For further information on franchising in Bahrain, contact the Middle East and North Africa Franchise Association (MENAFA) at: https://www.linkedin.com/company/menafa---middleeast-north-africa-franchise-associates and see the international section of the British Franchise Association website at: http://www.thebfa.org/international.

Further information about various start-up options in Bahrain is available at: https://www.startupoverseas.co.uk/starting-a-business-in-bahrain/company-formation.html.

Consumer protection

If you are selling to consumers (rather than businesses) you should ensure you comply with relevant consumer protection laws, which guarantee consumer rights when buying goods and services.

Professional indemnity insurance

You may require professional indemnity insurance if you provide a service and need to protect yourself against negligence claims from clients or third parties in Bahrain. See: https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/business-insurance/liability-insurance/professional-indemnity-insurance/ for further information, or alternatively, contact the DIT team in Bahrain at: http://www.gov.uk/world/organisations/department-for-international-trade-bahrain#contact-us for contacts of local insurers or specialist brokers.

[Source – DIT Trade and Investment guide: Bahrain, gov.uk]

 

Financial considerations

Getting finance to fulfil an export contract

Globally, Bahrain ranks 94^th out of 190 economies for Ease of Getting Credit, in the World Bank’s ‘Doing Business’ report 2020. See: http://www.doingbusiness.org/en/data/exploreeconomies/bahrain#DB_gc.

For UK companies that wish to sell products and services to Bahrain, there are schemes available to simplify the growth of your business and to fulfil an export contract. Contact your bank or financial adviser for more information about any current schemes. Alternatively, the DIT team in Bahrain at: https://www.gov.uk/world/organisations/department-for-international-trade-bahrain#contact-us can help you find a financial adviser in Bahrain.

Your contract should specify the terms for payment, and use secure terms of payment in Bahrain through a letter of credit, cash, or partial payment in advance.

Be aware that you should only use open account payment terms (delivery of goods or services before payment) once you have an established trading relationship. See the Institute of Export’s guide to payment terms, at: https://www.export.org.uk/page/Methods_of_Payment for advice and further information.

Payment risks

UK Export Finance (UKEF) helps UK companies to get paid by insuring against buyer default.

You may have difficulty accessing foreign exchange. Be confident you will get paid for your export contract. Speak to one of UKEF’s export finance advisers at: https://www.gov.uk/government/publications/find-an-export-finance-manager for free and impartial advice on your insurance options, or contact one of UKEF’s approved export insurance brokers at: https://www.gov.uk/government/publications/uk-export-finance-insurance-list-of-approved-brokers/export-insurance-approved-brokers.

Currency risks when exporting to Bahrain

In order to fix your price, it is essential to fix your exchange rate. Before signing any contract, you need to consider whether the best option for you is to agree terms in Pounds Sterling (GBP) or Bahraini Dinar (BHD). It may also be advisable to seek expert financial advice on exchange rates (FX).

[Source – DIT Trade and Investment guide: Bahrain, gov.uk, UKEF]

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