Bahrain attracted record FDI inflows of $6.8bn in 2023

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Bahrain secured a record-breaking $6.8bn in foreign direct investment (FDI) inflows in 2023, according to the latest World Investment Report (WIR 2024) by the United Nations Conference of Trade and Development (UNCTAD).

This represents a 148 per cent increase from the $2.8bn in FDI inflows in 2022, affirming the country’s reputation as a prime destination for regional and global investors.

The surge in FDI contributed to the growth of cumulative inward FDI stocks, which rose from $36.2bn in 2022 to $43.1bn in 2023.

Its FDI stocks relative to GDP reached 99.7 per cent at the end of 2023, significantly above the global average of 46.9 per cent.

The top contributors to FDI stocks were Kuwait (36 per cent), Saudi Arabia (23 per cent), and the UAE (10 per cent), according to Bahrain’s Information & eGovernment Authority.

Noor bint Ali Alkhulaif, Minister of Sustainable Development and chief executive of the Bahrain Economic Development Board (Bahrain EDB), commented on the achievement: “The milestone FDI inflows attracted in 2023 reflects the strength of Bahrain’s value proposition and its standing as a trusted destination for investors seeking strategic locations and cost-effective operations.”

Why Bahrain is an attractive investment hub

The country has cemented its reputation as an attractive investment hub, supported by forward-looking regulatory frameworks and strategic economic plans to foster growth and diversification.

Its nominal GDP grew from approximately $11bn in 2003 to over $43bn in 2023, averaging 7 per cent annual growth, surpassing the global average of 5 per cent.

Additionally, the financial services sector became the largest contributor to real GDP in 2023 at 17.8 per cent, overtaking the oil sector.

“The agility of our government, our skilled bilingual talent pool, and our financially liberal environment have positioned the country as a leading investment destination,” added Minister Alkhulaif. “At Bahrain EDB, we continue to attract investments from priority markets, supported by Team Bahrain, to sustain economic growth and diversification.”

A pivotal initiative in attracting investment has been the Golden License, launched in April 2023, which secured $2.4bn in investments from nine major projects and is expected to generate 3,000 job opportunities.

Recent projects awarded a golden license in 2024 include Bahrain Titanium, the first facility of its kind in the region by Interlink Metals & Chemicals, the National Bank of Kuwait’s (NBK) first greenfield head office outside Kuwait, a data centre facility and international submarine cable by Beyon, and the development of Bahrain Marina.