As competition for global investment heats up across the Gulf region, it is easy to assume that bigger is always better.
But for Bahrain, the smallest of the GCC states, its strengths lie not in its size but in its strategic positioning, according to the head of the government agency tasked with bringing investment to the kingdom.
“The good thing about being a small country is that we have no ego, so we don’t try to compete with the big guys,” explains HE Noor bint Ali Alkhulaif, CEO of Bahrain’s Economic Development Board (EDB). Assets.
“We know where our advantages lie and where we can play better, and we attach great importance to that.”
Rather than trying to compete directly with its larger neighbors to close multi-billion dollar deals, the small island kingdom is developing a unique strategy focused on agility, advanced regulation, skilled talent and niche specializations to position itself as a complementary investment destination.
The Bahrain EDB is committed to five key sectors: Financial services, manufacturing, logistics, tourism and information and communications technology.
“In each sector, we identify sub-sectors where we see the greatest potential and regularly review them to refine our priorities according to changing market conditions,” says HE Noor, who also serves as Bahrain’s Minister for Sustainable Development.
Bahrain’s financial services industry overtook oil as the largest contributor to real GDP in the third quarter of 2025, accounting for 17.6% of GDP in 2025.
Within the sector, Bahrain’s EDB is now focused on expanding wealth and asset management and recruiting family offices, particularly from key financial centers in Europe and Asia, as well as markets where Bahrain has well-established bilateral relationships.
The board attended the Milken Institute’s annual conference in Los Angeles in May, where it courted several high-net-worth individuals.
“Dubai can be a saturated market at times and Bahrain offers a good alternative for many of these companies.”
Over the past year, Bahrain has accelerated reform of its trust laws, residency programs and regulatory environment after examining successful international wealth hubs such as Jersey, Guernsey, Switzerland and Singapore.
As a pioneer of the Gulf banking sector more than a century ago with the opening of Standard Chartered (then Eastern Bank) in 1920, the Kingdom remains one of the Gulf Cooperation Council’s most progressive financial regulators.
It was groundbreaking with that Launched the region’s first regulatory sandbox for fintech companies in June 2017and was an early adopter of open banking, crypto regulation and stablecoin legislation.
“We know that many global banks want or need to have their headquarters in either the UAE or Saudi Arabia,” says HE Noor.
“So what we tell them is that we have a really well-developed fintech sector, so if you want to set up your digital bank or offer some of these services, we have the right environment and we have regulations that you won’t find in the rest of the GCC.”
Amazon Web Services (AWS) have become an anchor of Bahrain’s digital transformation. The technology company operates two cloud innovation centers in Bahrain and is the only country outside the US to host more than one. Cloud Innovation Centers (CICs) are collaborative centers where institutions work with AWS experts to solve real-world problems.
In addition, the development of the local workforce will be supported through AI training and digital upskilling initiatives aligned with the Kingdom’s national priorities.
“We are having a lot of discussions with AWS and thinking about how we can expand their AI presence in the country and how we can also use this to serve the entire region,” says HE Noor.
“There is already strong organic growth in this sector. AWS has told us that among the services offered in the region, the greatest interest in AI and the largest AI applications are coming from Bahraini institutions.”
In 2018, Bahrain became the first country to introduce a “data embassy law”. This allows foreign institutions to store their data under the jurisdiction of their home country while being hosted in data centers in Bahrain.
This means, for example, that a US company’s data is only accessible to other parties through a US court order. It remains the only country to have such a law.
Meanwhile, in February last year, Bahraini technology group Beyon signed an agreement with Oracle to give him access oracle Cloud Infrastructure’s (OCI) dedicated region offering.
By leveraging Beyon’s on-premises data center infrastructure, its customers can access Oracle’s cloud services without data having to leave the country and maintaining data sovereignty.
“Technology is a key area of focus and the US as a whole is a strategic market for us,” said HE Noor, who acknowledged that events in the region in recent months have shifted the discussion from digital sovereignty to digital resilience.
Two Amazon Web Services (AWS) data centers opened in the UAE in early March directly hit by droneswhile another facility in Bahrain was damaged by a nearby drone strike.
The attacks knocked all three data centers offline and disrupted banking services, payment systems, delivery platforms and business software across the region. AWS shifted computing workloads to other regions and warned against it The recovery was expected to be “sustained.” because of the extent of the physical damage.
According to EDB, investor sentiment towards Bahrain remains relatively positive despite the Iran war.
“The investors we were already looking to work with or who were already in the pipeline continued their investments. We didn’t see any major disruption overall,” adds HE Noor.
However, she acknowledges that both tourism and manufacturing have had an impact.
“This mainly has to do with the logistics sector and that is the area we need to work on. So it is about rethinking which shipping routes manufacturing companies would use. We also need to recalibrate the tourism sector.”
A new gateway for US investors
Manufacturing was a cornerstone of Bahrain EDB’s strategy and attracted particular interest from U.S. investors.
Bahrain’s high-quality industrial infrastructure, such as the Bahrain International Investment Park and Bahrain Investment Wharf, is already home to chemical company Mondelēz BASFthe dairy multinational Arla and the consumer goods company Reckitt.
Upcoming industrial zones include the US Trade Zone (USTZ) and the Aluminum Downstream Cluster.
The USTZ will become a hub for manufacturing and logistics activities and provide benefits to U.S. companies including exemption from tariffs on imported raw materials, manufacturing, spare parts and construction equipment.
“Our old aluminum smelter and the aluminum downstream sector are big industries for us,” says HE Noor.
“But we are now also looking at advanced manufacturing and fast-moving consumer goods and trying to improve food security.
“We want to position ourselves as a service center for the region. There is a lot of development happening in Saudi Arabia and a lot of materials need to be manufactured and delivered to this market. So we are trying to encourage the companies that serve this market to get closer to the consumer.”
Free trade agreement between Great Britain and the Gulf Cooperation Council
The EDB also wants to capitalize on this A free trade agreement (FTA) was recently concluded between the UK and the Gulf Cooperation Council..
The long-delayed free trade agreement was signed in May after four years of negotiations and creates a framework that will boost bilateral trade. The Britain’s total trade with the Gulf Cooperation Council currently stands at 53 billion pounds ($71 billion) and could rise by 19.8%. annually based on the agreement.
“I think everyone couldn’t believe it when it actually happened,” said HE Noor, who sees opportunities for further collaboration in the aluminum sector, manufacturing in general, as well as energy, life sciences and healthcare.
“We have discussed Bahrain’s energy capacity as a potential advantage for UK businesses,” she adds.
“In the life sciences and healthcare sectors, we have started discussions with companies about partnerships that would enable UK companies to set up operations, run trials and tests, support start-ups and scale-ups and use technology to expand their footprint. So hopefully you will see a very clear plan emerging once it is officially signed, but the work starts now to ensure we are ready for this.”
Growing the cake
With the Gulf’s glitzy real estate ventures and multi-billion dollar gigaprojects often dominating the headlines, it’s easy to overlook how far Bahrain has already come on its path to diversification. Today, about 85% of the kingdom’s GDP comes from the non-oil economy.
As the EDB continues to advocate for Vision 2030, the Board has begun discussing what Vision 2050 would entail.
“One of the goals we need to strive for is to increase the value of the economy, rather than just saying, ‘Diversify, diversify, diversify,’” says HE Noor.
“We always compare ourselves to Singapore because we are about the same size in landmass as Singapore, but their GDP is 10 times larger than Bahrain’s, even though their population is only four times larger. So it’s about finding productivity improvements and higher value creation.”
While the EDB already has growth targets in mind, HE Noor declines to share them: “I don’t want to burst bubbles, but they are ambitious.”
In five years, success will be measured by sustained economic growth, steadily increasing GDP and a globally recognized national brand, according to Alkhulaif.
All too often, Alkhulaif argues, foreign investors view the Gulf Cooperation Council as a single, homogeneous market.
“We want people to immediately see what Bahrain offers investors,” she says.