Subsidised pay and skilled Bahraini workers: How Bahrain is encouraging firms to hire citizens - As-salāmu ʿalaykum
As-salāmu ʿalaykum - Bahrain may be the smallest country in the Gulf, but it's making big moves to attract investment alongside its neighbours. Noor bint Ali Alkhulaif, CEO of Bahrain’s Economic Development Board and Minister of Sustainable Development, speaks plainly about the strategy: businesses always look for “the best quality at the lowest cost,” and Bahrain aims to be competitive on that basis.
One major advantage is Bahrain’s tax setup: no local corporate tax apart from the global minimum of 15 per cent, no personal income tax, no repatriation taxes and no capital gains tax. Investors can also own 100 per cent of many businesses, which gives them flexibility.
But a key pillar is Bahrain’s local talent. Tamkeen, the national labour fund, runs a National Employment Programme that helps private firms hire Bahraini citizens by subsidising wages - covering between 30 and 70 per cent of salaries for three to five years. That support eases the heavy upfront cost of new hires and gives Bahrainis real job opportunities.
Tamkeen also helps pay for training and upskilling for Bahraini workers. The idea isn’t just to lower costs for employers, but to steer the workforce toward future needs. For example, if the economy needs more coders than lawyers, programmes will favour digitisation training and offer more incentives to hire tech talent.
Bahrain’s unemployment rate was 6.16 per cent in 2024, and the country is taking steps similar to localisation efforts across the Gulf to get more citizens into work. In 2023 Bahrain introduced a “golden licence” for strategic projects that create 500+ jobs or invest more than $50 million, to attract major job-creating investments.
The EDB reported $1.52 billion of direct investment from 75 projects in the first nine months of the year, expected to create over 4,300 jobs in three years. Last year FDI reached $1.8 billion, and the board says it has ambitious targets this year as well.
Despite regional tensions earlier in the year, investors have stayed confident in Bahrain’s security and stability, she said. The country’s relationship with partners such as the US is multi-dimensional - security, political and economic - and agreements like C‑Sipa aim to deepen cooperation on trade, technology and supply chains.
Bahrain is also expanding trade ties, negotiating new deals and focusing on five strategic sectors: financial services, manufacturing, logistics, tourism and technology, while supporting education and health care. With nine free trade agreements signed and more in discussion, the country hopes to capture part of the growing regional flows of investment and people.
In short - wa-llāhu aʿlam - Bahrain is using a mix of tax advantages, wage subsidies, training support and strategic incentives to make it easier for firms to hire Bahrainis and for investors to set up and grow here.
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