With purpose-built infrastructure, specialised facilities, separate rules & regulations, exclusive connectivity to ports and other major industrial areas through multi-modal transport systems, Bahrain’s Free Trade Zones offer a competitive edge for foreign businesses operating out of here, contends Ivor Vaz
THE KINGDOM OF BAHRAIN is diversifying its economy away from unsustainable hydrocarbons resources to sectors such as banking and finance, trade and industry, retail and tourism. Its only physical link to Saudi Arabia via the King Fahd Causeway, constructed in 1986, has been a major contributor to inter-Gulf trade, tourism and retail. In terms of passenger traffic, the causeway is one of the busiest in the Middle East, with recorded traffic statistics of over 20 million passengers and 10 million vehicles in both directions each year.
With its world-class infrastructure, excellent connectivity, low operating costs and business-friendly laws, the island nation today attracts foreign direct investment by allowing businesses and companies to operate in the country while offering various incentives and tax-friendly policies.
In 2013, Bahrain was ranked as the 12th most-free economy in the world by the US Heritage Foundation think tank, making it the only Middle East and North Africa country to appear in the Top 20. Bahrain is home to three Special Economic Zones (SEZs), all of which were ranked in the Top 20 locations for inward investment, economic development and business expansion in FDI Magazine’s ‘Global Free Zones of the Future’report.
Bahrain has three central Free Trade Zones (FTZs):
Bahrain International Investment Park (BIIP), Bahrain Logistics Zone (BLZ), and Bahrain Airport Zone (BIA). Each FTZ offers a competitive edge for the foreign businesses operating in it with specialised infrastructure, worldclass facilities, exclusive regulations and rules, excellent multi-modal connectivity through sea, land & air to most of the Middle East & North African (MENA) markets, and offers a world-class environment for the businesses and companies to operate in the zone. The Free Trade Zones are predominately used for import, export, logistics and material processing.
Bahrain Logistics Zone (BLZ) Operated by Ports and Maritime Affairs (PMA) at the Ministry of Transportation and Telecommunication, the Bahrain Logistics Zone (BLZ) is a regional trans-shipment hub with highlyintegrated logistics, purposebuilt Infrastructure, large-scale berthing facilities and plot entry allowances, designed explicitly for handling container truck traffic and freight-forwarding operations while remaining as the dedicated customs- free zone and value-added logistics park in Bahrain. The port zone, which was launched in the year 2008, is close to the biggest port of Bahrain, Khalifa bin Salman Port (KBSP) and is located in the heart of Salman Industrial City in Al Hidd Industrial Area. It offers land plots of 3,000 sq. metres and more for lease. The 100-hectare zone focuses on third-party logistics, storage and distribution (for export and re-export), as well as other logistics services and activities.
Facilities
- Plots of land start at 3,000 sq. metres, while the zone itself covers 100 hectares.
- Expansion plans announced, including the construction of a new 66kV power station.
Benefits
- Customs-free zone
- 100 per cent foreign company ownership
- Land, sea and air access
Industries
- Third-party logistics
- Storage and distribution
- Logistics services and valueadded logistics services, including assembly
Bahrain International Investment Park (BIIP)
Located in the Salman Industrial City, Muharraq Island, the Bahrain International Investment Park (BIIP) is strategically positioned on the north coast of Bahrain, taking only a five minutes’ drive from the Bahrain Logistics Zone (BLZ) and ten minutes from the Khalifa bin Salman Port.
BIIP offers 100 per cent foreign ownership of companies, duty-free access to GCC markets, exemption from import duties on both raw materials and equipment and 100 per cent repatriation of capital. Located 5 kilometres from Bahrain
International Airport, BIIP consists of 2.5 million sq. metres of leasable land, costing $1.33 a sq. metres a year to rent.
The BIIP is not a considered a free zone according to the law as the businesses & companies located in the area are considered to operate from Bahrain mainland which is within the GCC market empowering them with seamless cross-border access with a regional promotion of their products and services. This is considered as an advantage as the foreign companies operating out this zone avails the benefits as such it is operating in a free zone and also the advantages of duty-free cross-border operations across the GCC since the company is located in Bahrain.
Facilities
- 2.5 million sq. metres of prime land, located close to Bahrain International Airport and Khalifa bin Salman port. Benefits
- 100 per cent foreign ownership
- Zero corporate tax, guaranteed for 10 years
- Exemption from import duties on raw materials and equipment
- Duty-free access to all GCC markets, including Bahrain
- Free-trade access to the US
- 100 per cent repatriation of capital
- No minimum capital requirements
- No recruitment restrictions for first five years Industries
- Manufacturing
- International services
Bahrain International Airport (BIA) The Bahrain International Airport (BIA) serves as a driver of economic growth in the region by offering topnotch airport facilities and modern air logistics. It was established in 1927 as the first airport serving the Kingdom of Bahrain and currently operates as a significant aviation hub in the region. It currently serves as the Gulf Air’s central hub of operations. In addition to this, the airport continually upgrades the facilities and services with the latest technology to make the existing airport into a world-class facility, with best-in-class customer service which is in line with the Kingdom’s long-term Bahrain Economic Vision 2030 and maintaining its reputation as a leading financial, cultural and aviation centre in the Middle East.
Bahrain International Airport (BIA) sits in 19th place in the Free Zones of the Future list, and is ranked the 5th best Airport Zone in the world. Offering cargo facilities, offices and retail space, the foreign trade zone has no customs duties. It is governed by Mumtalakat, the government vehicle for Bahrain’s non-oil and gas investments, established in June 2006 by royal decree.
While BIA is not a free zone, infrastructure plans are in their final stages, including a possible free zone. Currently, as with most airports, BIA has a bonded cargo terminal, which allows importers to delay the payment of duty until products leave the facility.
Facilities
- Cargo facilities at BIA are located in a 19,000 sq. metres terminal providing export cargo sales, trans-shipment facilities, breakbulk cargo handling, dangerous goods provisions, customs clearance. Benefits
- Bonded cargo terminal Industries • Cargo facilities
- Retail
- Advertising space
- Offices
