When you think of banking in the Middle East the Emirates and Dubai are generally the first to come to mind. However, away from the main stage, the kingdom of Bahrain holds much of the hidden potential which could bring the whole region to new levels of worldwide financial excellence.
Bahrain is a small island country near the western shores of the Persian Gulf. It is an archipelago of 33 islands, the largest being Bahrain Island, which is 34 miles long and 11 miles wide. Although oil was discovered in Bahrain in 1932, in recent years Bahrain has sought to diversify its economy to be less dependent on oil by investing in the banking sector and tourism. Bahrain is sometimes described as “Middle East lite” due to its combination of modern infrastructure with a Persian Gulf identity. While Islam is the main religion, Bahrainis are known for their tolerance towards the practice of other faiths.
Bahrain’s Economy – An Introduction
There are many reasons why the Bahrain economy has been attracting increasingly more foreign investors. First and foremost, the country has the region’s lowest taxes, and it still allows businessmen to travel effortlessly within the region, as it takes less than one hour by flight to reach Saudi Arabia, the Emirates and Qatar.
With 100% foreign ownership allowed, business in Bahrain is all about ease of access, and the overall economy has been benefiting from the country’s open market despite the recent global down-turn. Picking up from a short period of slow growth, the country’s GDP is expected to go up by an outstanding 6.2% this year and 3.4% next year.
Playing by Bahrain’s Rules
As the strong regional stability attracts many US businessmen to the region, it is still paramount to know what the local rules for banking are right
from the planning stage of your Bahrain-based business.
Banking in the Middle East has rules of its own, with the Islamic culture inevitably being the main backdrop. With Islamic banking chosen by many Islamic businessmen in the region, you may want to get accustomed with the rules of this Sharia-complying form of banking: if you decide to operate under Islamic rules the lending of money at interest is prohibited, and you may want to brush-up the concepts of risk-sharing and profit sharing.
For what concerns Bahrain specifically, the Islamic culture comes into play also for what concerns opening hours: banks are open between 7:30 AM and 2.30 P.M. with Friday and Saturday being the days of rest.
Available in the country are three main kinds of accounts: current accounts, coming with no monthly fee, credit cards with little or no interest, savings accounts, which pay more interest than current accounts but have limited access to funds, and fixed-deposit accounts for long-term saving.
In order to open a bank account in Bahrain, you’ll need a residence permit, a ‘letter of no objection’ from your employer stating the monthly salary and expected monthly deposits, your tenancy agreement and a copy of your passport.
It is possible to open an account before actually moving to the country, something which can be done online or over the phone through international banks operating in Bahrain.
It shouldn’t also be forgotten that local ATMs will charge you a service fee, and as elsewhere in the region, only American Express cards are accepted for withdrawals. As a means of payment, however, your American credit card operating on another system will be accepted, but it will be charged extra fees.
Last but not least, if you’re venturing outside the main urban areas always remember to have some cash on you as ATM services may not be available.
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