As competition for global investment heats up across the Gulf,it’seasy to assume bigger is always better.
But for Bahrain, the smallest of the GCC states,its strengths come not from its size but from its strategic positioning, according to the head of the government agency tasked with bringing investment intothe kingdom.
“The good thing about being a small country is that we have no ego, so we’re not trying to compete with the big players,”H.E. Noor bint Ali Alkhulaif, the CEO of Bahrain’s Economic Development Board (EDB), tells Fortune.
“We know what our advantages are and where we can play better, and that’s what we double down on.”
Rather thanattemptingto compete head-on with its larger neighborsin signing multibillion-dollar deals, the small island kingdom is carving out a distinctive strategycenteredon agility,advancedregulation, skilled talent, and niche specialisms to position itself as a complementary investment destination.
TheBahrain EDB champions five key sectors: financial services, manufacturing,logistics, tourism, and information communications technology.
“Within each sector, we identify subsectors where we see the strongest potential, andrevisit them regularly, refining our priorities in line with changing market conditions,” says H.E. Noor, who also serves as Bahrain’s Minister of Sustainable Development.
Bahrain’s financial servicesindustryovertook oil as the largest contributor to real GDP in Q3 2025 and accounted for 17.6% of GDP in 2025.
Within the sector, Bahrain’s EDB isnowfocusedonexpandingwealth and asset management andattracting family offices,particularlyfrom key financial centres in Europe and Asia and markets where Bahrain maintains well-established bilateral relationships.
The Boardattended the Milken Institute’sannual conference in Los Angeles in May where it courted varioushigh-net-worth individuals.
“Dubai can be a saturated market at times, and Bahrain offers a good alternative for many of those companies.”
Over the past year, Bahrain has accelerated reforms to its trust laws, residency programs, and regulatory environment after studying successful international wealth hubs including Jersey, Guernsey,Switzerland,and Singapore.
Having pioneered the Gulf’s banking sector more than a century agowith the opening of Standard Chartered (then the Eastern Bank) in 1920,the kingdomremainsone of the GCC’s most progressive financial regulators.
It led the way with thelaunch of the region’s first regulatory sandbox for fintech firms in June 2017, and has been an early adopter of open banking, crypto regulation,and stablecoin legislation.
“We know that for a lot ofglobalbanks, they would want orneedto have their headquarterslocatedeither in the UAE or in Saudi,” H.E. Noor says.
“Soour pitch to them is we’ve got a really well-developed fintech sector,so if you’re looking to start your digital bank or bring in some of those services, we’ve got the right environment,and wehave regulations that you’re not going to find in the rest of the GCC.”
Amazon Web Services(AWS)has become an anchor of Bahrain’s digital transformation. The tech company operates two Cloud Innovation Centres in Bahrain and is the only country outside the U.S. to host more than one. Cloud Innovation Centers (CICs) are collaborative hubs where institutions work with AWS experts to solve real-world problems.
It’s also supported local workforce development through AI training and digital upskilling initiatives aligned with the kingdom’s national priorities.
“We’re having a lot of discussions withAWS, looking at how to growtheirAI footprint in the country and how that can also be used toservice the wider region,” says H.E. Noor.
“Already there is strong organic growth in that sector. AWShas told us that, among the services they offer in the region, the greatest interest in AI and the largest AI applicationscome from Bahraini institutions.”
In 2018, Bahrain became thefirstcountry to implement a “Data Embassy” lawthat allows foreign institutions to store their data under thejurisdictionof their home countries while it is hosted by datacentersin Bahrain.
This means, for example, that a U.S. company’s data can only be accessed by other parties through a U.S. court order.Itremainsthe only country to have such a law.
Meanwhile, in February last year, Bahraini tech group Beyonsigned an agreement with Oracletoprovide it with access to Oracle Cloud Infrastructure’s (OCI) Dedicated Region offering.
By usingBeyon’slocaldatacenterinfrastructure, its customers will be able toaccessOracle’scloud services without any data leaving the country andmaintainingdatasovereignty.
“Technology is a big focus area, and the U.S. overall is a strategic market for us,” said H.E. Noorwho acknowledged that eventsin the region over the last few monthshave shifted the conversation from digital sovereignty to digital resilience.
In early March, two Amazon Web Services (AWS) datacentersin the UAE weredirectly hit by drones, while another facility in Bahrain sustained damage from a nearby drone strike.
The attacks knocked all three datacentersoffline, disrupting banking services, payment systems, delivery platforms, and enterprise software across the region. AWS shifted computing workloads to other regions and warned thatrecovery was expected to be “prolonged”because of the extent of the physical damage.
The EDB says that despite the Iran war, investor sentiment towards Bahrainremainsrelatively buoyant.
“The investors we had already lined up to work with or were already in the pipeline carried on with their investments.We’venot seen much disruption overall,” adds H.E. Noor.
However, she acknowledges that both tourism and the manufacturing sector have seen an impact.
“That’s mostly to do with thelogisticssector andthat’sthe area that we need to work on. So,it’sa case of rethinking which shipping routes manufacturing companies would use. We also need to recalibrate the tourism sector.”
A new gateway for U.S. investors
Manufacturinghas served asacornerstone of BahrainEDB’sstrategy, drawing particular interest from U.S. investors.
Bahrain’s high-quality industrial infrastructure, such as the Bahrain International Investment Park and the Bahrain Investment Wharf, is already home to Mondelēz, chemicals company BASF, dairy multinational Arla, and the consumer goods business Reckitt.
Upcoming Industrial Zones include the U.S.Trade Zone (USTZ) and the Aluminum Downstream Cluster.
The USTZ will become a hub for manufacturing andlogisticsactivities and will offer U.S.businesses advantages,including exemptions from customsduties for imported raw materials, manufacturing, sparepartsand construction machinery.
“Our legacy aluminum smelter and the aluminum downstream sector are big industries for us,” says H.E. Noor.
“Butwe’renow also looking at advanced manufacturing, fast-moving consumer goods, as well as trying to improve food security.
“We want to position ourselves as a servicecenterto the region. A lot of development is happening in Saudi, andthere’sa lot of materials that needto be producedandshipped tothat market.Sowe try and encourage the companiesserving that market to come closer to the consumer.”
U.K.-GCCFTA
The EDB is also looking to capitalize on therecently secured U.K.-GCC free trade agreement (FTA).
The long-delayedFTAwas signed in May after four years of negotiations and establishes a framework that will boost bilateral trade. The UK’s total trade with the GCC is currently £53 billion ($71 billion) and could increase by 19.8% annually as a result of the agreement.
“I think everyone couldn’t quite believe it when it actually happened,” said H.E. Noor, who sees opportunities for additional cooperation across the aluminum sector, manufacturing more broadly, as well as the energy, life sciences, and healthcare sectors.
“We’vediscussed Bahrain’s energy capacity as a potential advantage for UK companies,” she adds.
“In life sciences and healthcare,we’vebegun discussions with companies on partnerships that would enable UK firms toestablishoperations, conduct trials and testing, support startups and scale-ups, and leverage technology to expand their presence.So,you will hopefully seea very clearplan starting toemergeonce it is officially signed, but the work is starting now to make sure thatwe’reready for it.”
Growing the pie
With the Gulf’s glitzy real estate ventures and multi-billion-dollar giga-projects often dominating the headlines, it is easy to overlook how far Bahrain has come in its own diversification journey. Today, approximately 85% of the kingdom’s GDP derives from the non-oil economy.
While the EDBremainscommitted to Vision 2030, the Board hasbegundiscussingwhat Vision 2050 would entail.
“One of the targets that we need to aim for is to grow the value of the economy rather than just say ‘diversify, diversify, diversify’,” says H.E. Noor.
“We always compare ourselves to Singapore becausewe’reroughly thesame size as Singapore in landmass, but their GDP is 10 times larger than Bahrain’s, although their population is only four times bigger in size. So,it’sa question of finding productivity gainsand increased value creation.”
While the EDB already has growth targets in mind, H.E. Noor declinesto share them: “I don’t want to burst any bubbles, but they’re ambitious.”
Five years from now, shesays success would be measured bycontinued economic growth,steadily risingGDPand a globally recognized national brand.
Too often, sheargues, overseas investors view the Gulf Cooperation Council as a single, homogeneous market.
“We want people to immediately recognize what Bahrain offers investors,” she says.
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