ANALYSIS OF BAHRAIN’S TRADE: DATA, PRODUCTS & PROCEDURES, FOR MORE DETAILED INFORMATION OR A SPECIFIC MARKET INTELLIGENCE MATTER OR ANY OTHER MATTER PLEASE CONTACT US

1. MACROECONOMIC TRADE CONTEXT

Annual Trade Volume 2024:

Total Exports: US$18.5 billion (≈ BHD 7.0 billion) ↓ 8.84% from 2023
Total Imports: US$16.9 billion (≈ BHD 6.4 billion)
Trade Balance: US$+1.6 billion surplus (≈ BHD 600 million)
Merchandise Trade Balance: US$3.6 billion (2024)
Exports Per Capita: US$11,700 (36th globally)
Imports Per Capita: US$10,600 (49th globally)
Global Export Rank: 81st out of 226
Global Import Rank: 95th out of 226
GDP (Current US$): US$47.1 billion (98th globally)
GDP Per Capita: US$47,100 (47th globally)
Currency: Bahraini Dinar (BHD), pegged to USD at US$1 = BHD 0.376 (fixed)
Economic Complexity Index (Technology): -1.21 (81st out of 96, 2021)
Economic Complexity Index (Research): -0.65 (91st out of 137, 2024)

Key Trade Trends (2024):

Indicator	2024 Value	Change from 2023
Total Exports	US$18.5 billion	↓ 8.84%
Total Imports	US$16.9 billion	N/A
Trade Surplus	US$1.6 billion	↓ from US$4.5B (2023)
Merchandise Trade Balance	US$3.6 billion	N/A
Exports Per Capita	US$11,700	N/A

Geographic Distribution 2024:

EXPORT MARKETS (US$18.5B):

Rank	Country	Export Value (US$)	Share of Total
1	Saudi Arabia	3.37 billion	18.2%
2	United Arab Emirates	1.71 billion	9.2%
3	United States	1.19 billion	6.4%
4	South Africa	1.01 billion	5.5%
5	India	772 million	4.2%
6	Netherlands	547 million	3.0%
7	Egypt	349 million	1.9%
8	Algeria	348 million	1.9%
9	Qatar	341 million	1.8%
10	Italy	324 million	1.8%

*Sources: OEC , Trading Economics *

By Geographic Region:

GCC Countries: ~30% (Saudi Arabia + UAE + Qatar + Kuwait + Oman)
Asia: ~15% (India, South Korea, Japan, Singapore, Thailand)
Europe: ~10% (Netherlands, Italy, Spain, Greece, UK)
North America: ~6.4% (United States)

IMPORT ORIGINS (US$16.9B):

Rank	Country	Import Value (US$)	Share of Total
1	Saudi Arabia	2.5 billion	14.8%
2	China	2.27 billion	13.4%
3	Australia	1.38 billion	8.2%
4	United Arab Emirates	1.18 billion	7.0%
5	Brazil	1.13 billion	6.7%
6	India	~800 million (est.)	4.7%
7	United States	~600 million (est.)	3.6%
8	Japan	~500 million (est.)	3.0%

*Source: OEC *

Trade Balance by Major Partner:

Partner	Trade Balance
Saudi Arabia	Surplus (exports $3.37B vs. imports $2.5B)
United States	Surplus (exports $1.19B vs. imports $0.6B)
South Africa	Surplus (exports $1.01B)
UAE	Surplus (exports $1.71B vs. imports $1.18B)
China	Deficit (imports $2.27B vs. limited exports)
Australia	Deficit (imports $1.38B)
Brazil	Deficit (imports $1.13B)

2. DETAILED EXPORT PRODUCT ANALYSIS

A. REFINED PETROLEUM PRODUCTS (HS 27)

1. Refined Petroleum: US$5.49 billion (29.7% of total exports)

Share of total exports: Nearly 30%
Refining capacity: Bahrain Petroleum Company (BAPCO) – Sitra Refinery (267,000 bpd)
Products: Gasoline, diesel, jet fuel, naphtha, fuel oil
Strategic advantage: Access to Saudi crude via pipeline
Primary Destinations: GCC countries, Asia, Africa

B. ALUMINUM AND METAL PRODUCTS

1. Raw Aluminium: US$3.56 billion (19.2% of total exports)

World-class producer: Aluminium Bahrain (Alba) – one of world’s largest smelters
Production capacity: 1.6 million metric tons per annum
Line 6 expansion: Completed, making Alba world’s largest smelter site
Primary Destinations: GCC, Asia, Europe, United States

2. Aluminium Wire: US$642 million (3.5% of total exports)

World’s largest exporter of aluminium wire
Value-added products: Extrusions, rods, profiles
Primary Destinations: Regional and international markets

3. Iron Ore: US$1.68 billion (9.1% of total exports)

Re-exports and processing
Note: Bahrain does not mine iron ore domestically

C. MACHINERY AND ELECTRICAL EQUIPMENT

1. Gas Turbines: US$551 million (3.0% of total exports)

Industrial machinery exports
Re-exports and local assembly

2. Machinery, nuclear reactors, boilers: US$793 million (4.3% of exports)

HS 84: Industrial machinery, mechanical appliances
Primary Destinations: Regional markets

3. Electrical, electronic equipment: US$227 million (1.2% of exports)

D. OTHER MAJOR EXPORT CATEGORIES

HS Code	Product Category	Export Value (US$)	Notes
72	Iron and steel	501 million	Re-exports, processed products
04	Dairy products, eggs, honey	505 million	Growing food processing sector
87	Vehicles (non-railway)	478 million	Re-exports
73	Articles of iron or steel	473 million	Fabricated metal products
71	Pearls, precious stones, metals	378 million	Re-exports, jewellery
31	Fertilizers	268 million	From petrochemicals
39	Plastics	231 million	Petrochemical derivatives
74	Copper	222 million	Re-exports
70	Glass and glassware	129 million	Manufacturing sector
29	Organic chemicals	120 million	Petrochemicals

E. GLOBAL EXPORT LEADERSHIP

Bahrain is the world’s largest exporter of :

Aluminium Wire: US$642 million

3. DETAILED IMPORT PRODUCT ANALYSIS

A. INDUSTRIAL RAW MATERIALS

1. Iron Ore (HS 26): US$1.37 billion (8.1% of total imports)

Primary Sources: Australia, Brazil
Purpose: Processing and re-export (steel industry)

2. Aluminium Oxide (HS 28): US$1.3 billion (7.7% of total imports)

Primary Sources: Australia, Brazil
Purpose: Feedstock for Alba smelter
Strategic importance: Essential for aluminium production

B. MACHINERY AND ELECTRICAL EQUIPMENT

1. Machinery, nuclear reactors, boilers (HS 84): US$1.72 billion (10.2% of imports)

Industrial machinery: For manufacturing, oil and gas
Construction equipment
Power generation equipment
Primary Sources: China, USA, Germany, Japan

2. Electrical, electronic equipment (HS 85): US$1.18 billion (7.0% of imports)

Telecommunications equipment
Consumer electronics
Electronic components
Primary Sources: China, South Korea, Japan

C. TRANSPORTATION EQUIPMENT

1. Vehicles (HS 87): US$1.43 billion (8.5% of imports)

Cars: US$1.1 billion
Special Purpose Ships: US$717 million
Other Sea Vessels: US$583 million
Primary Sources: Japan, USA, Germany, South Korea

D. CHEMICAL AND ALLIED PRODUCTS

1. Inorganic chemicals, precious metal compounds (HS 28): US$1.59 billion (9.4% of imports)

Aluminium oxide dominant (counted separately above)

2. Pharmaceutical products (HS 30): US$464 million (2.7% of imports)

3. Plastics (HS 39): US$396 million (2.3% of imports)

4. Essential oils, perfumes, cosmetics (HS 33): US$187 million

E. PRECIOUS METALS AND STONES

1. Pearls, precious stones, metals, coins (HS 71): US$636 million (3.8% of imports)

Gold, jewellery
Primary Sources: Switzerland, UAE, India

F. FOOD AND AGRICULTURAL PRODUCTS

Category	Import Value	Key Sources
Dairy products, eggs, honey	US$388 million	New Zealand, EU, USA
Meat and edible meat offal	US$303 million	Brazil, Australia, India
Edible fruits and nuts	US$202 million	Egypt, Lebanon, South Africa
Edible vegetables	US$149 million	Regional suppliers
Cereal preparations	US$161 million	Various
Miscellaneous edible preparations	US$161 million	Various

G. OTHER MAJOR IMPORT CATEGORIES

Category	Import Value
Optical, medical apparatus (HS 90)	US$230 million
Furniture, lighting (HS 94)	US$215 million
Iron and steel (HS 72)	US$208 million
Articles of iron or steel (HS 73)	US$339 million
Mineral fuels, oils, distillation products (HS 27)	US$405 million
Articles of apparel (knit & not knit)	US$306 million combined

H. GLOBAL IMPORT LEADERSHIP

Bahrain is the world’s largest importer of :

Pitch Coke: US$201 million

4. TRADE PROCEDURES & REGULATIONS – DEEP DIVE

A. CUSTOMS LEGAL FRAMEWORK

1. Primary Authority:

Bahrain Customs Affairs (شؤون الجمارك)
Website: customs.gov.bh

2. Legal Framework:

GCC Common Customs Law: Bahrain applies the unified customs law of the Gulf Cooperation Council
GCC Common Customs Tariff: Unified tariff structure (5% on most imports)
National Customs Procedures: Bahrain-specific implementing regulations
VAT Law: Decree-Law No. 48 of 2017 (implemented 2019)

3. GCC Customs Union:

Members: Bahrain, Saudi Arabia, UAE, Qatar, Kuwait, Oman
Common External Tariff: 5% on most imports
GCC-wide customs declaration accepted
Revenue distribution mechanism among member states

4. International Memberships:

WTO Member: Since 1995
GAFTA (Greater Arab Free Trade Area): Member
GCC: Founding member
US-Bahrain FTA: Bilateral Free Trade Agreement (effective 2006)

5. 2024 Regulatory Updates:

Measure	Date	Description
Decision No. 22 of 2024	18 April 2024	Opens “authorized distribution” sector to 100% foreign-owned companies
Customs Efficiency Enhancements	Ongoing	Digital processing, risk management, advance rulings

B. 2024 FOREIGN INVESTMENT REFORM (Decision No. 22 of 2024)

Key Provision:

Wholly or partially foreign-owned companies may now be licensed as “authorized distributors”

Applicable Circumstances:

Existing Local Partnership:
- There is an active sole proprietorship or company with ≥51% Bahraini capital
- Practising “authorized distributor” activity for the same trademark in Bahrain
International Brand Owner:
- The company that owns the international brand distributes its products in Bahrain
Economic Importance:
- Company deemed of economic importance by Minister of Commerce criteria
- Requires Council of Ministers approval

Impact:

Significant liberalization of distribution sector
Attracts international brands to establish direct operations
Enhances Bahrain’s position as regional distribution hub

C. WTO TRADE FACILITATION AGREEMENT (TFA) COMPLIANCE

Ratification: 23 September 2016

Revised Kyoto Convention: Signed 23 April 2012

D. IMPORT PROCEDURES

1. Customs Website and Transparency

Bahrain Customs website (customs.gov.bh) provides :

Laws and regulations (published in Official Gazette)
Full description of all Customs procedures
Access to appeal procedure information
All forms and documents required for import/export

Advance rulings: Customs issues binding advance rulings on classification and valuation questions

Opportunity to comment: Public may comment on new regulations prior to implementation (Art 2.1.1 TFA)

2. Electronic Processing

Capabilities :

Customs accepts and processes data electronically in advance of arrival (Art 7.1 TFA)
Formalities for final clearance can be completed electronically post-release
Full-time (24/7) automated processing available at customs ports

3. Release Times

Shipment Category	Typical Release Time
Letters and Documents	Before noon
Low-value non-dutiable items (de minimis)	Before noon
Low-value dutiable items	Before noon
High-value dutiable items	Same day

De Minimis Threshold: 300 BHD (≈ US$800) for B2C shipments; B2B has no de minimis

4. Inspection and Risk Management

Risk-based selectivity: Customs applies risk management to select items for documentary/physical examination
No multiple inspections: Only Customs inspects; other agencies do not conduct separate examinations
Fully coordinated inspections when required
Operator’s facility clearance: For air shipments, inspection at operator’s facility (not transferred)

5. Documentation Requirements

Documents NOT Required :

No consular invoice or consular visa
No pre-shipment inspection certificate
No chamber of commerce certificate of origin (though may be required for preferences)

Electronic Documents:

Customs accepts electronic supporting documents
Customs accepts scanned copies of supporting documents

Express Carrier Privileges:

Express carriers may clear import shipments on behalf of consignee without licensed customs broker

E. TAXATION & DUTIES

1. Customs Duties

GCC Common External Tariff:

Standard Rate: 5% on most imports (CIF value)
Exemptions: Basic food items, medical supplies, books, printed materials
Higher Rates: Tobacco (100%), alcohol (100% + religious restrictions)

Preferential Rates:

GAFTA: 0% on qualifying Arab origin goods
US-Bahrain FTA: 0% on qualifying US origin goods

2. Value Added Tax (VAT)

Standard Rate: 5% (introduced 1 January 2019)

VAT on Imported Goods :

Goods imported into Bahrain are typically subject to 5% VAT
VAT due on same day as customs duty
Payable to Bahrain Customs Affairs before goods release
Value for VAT = customs value + customs duties + excise tax + transport/insurance/other charges to first Bahrain entry point

VAT Exemptions :

Basic food items
Precious metals sold for investment
Pearls and precious stones
Prescribed medicines and medical equipment
Goods for persons with special needs (with documentation)
Diplomatic and military exemptions
Returned goods
Personal belongings of citizens/residents moving to Bahrain

Zero-Rated Exports :

Exports of goods from Bahrain are subject to 0% VAT
Conditions:
- Goods shipped within 90 days of supply
- Goods not changed/used/sold before leaving
- Supplier retains proof of shipment
- Supporting documents obtained within 90 days

VAT Deferral for Registered Importers :

VAT-registered importers may defer payment to tax return
Conditions:
- Registered for VAT in Bahrain
- Maintain all import documents
- Comply with NBR requests
- Declare VAT due in tax return for period of import
- NBR authorization required

Recovery of Import VAT :

VAT-registered persons can claim import VAT as input tax
Goods must be used for taxable supplies
Recovery allowed if recovery rules satisfied
Customs documentation serves as proof

3. Customs Duty Exemptions

Qualifying Entities/Bodies :

Diplomatic missions (reciprocal basis)
Military (official use)
Returned goods (temporarily exported)
Personal belongings of citizens/residents moving to Bahrain
Passenger baggage and gifts (within limits)

F. SPECIAL TRADE REGIMES

1. Free Zones

Bahrain Logistics Zone (BLZ):

Adjacent to Khalifa Bin Salman Port
Logistics and light manufacturing
Duty-free imports
Simplified procedures

Bahrain International Investment Park (BIIP):

Industrial zone near causeway to Saudi Arabia
Manufacturing focus
Foreign ownership permitted

2. Temporary Admission

Goods may be temporarily admitted (up to 6 months)
For exhibitions, professional equipment, samples
Requires security (bank guarantee or cash deposit)
Goods must be re-exported

3. Bonded Warehousing

Storage without duty payment
For re-export or subsequent local release
Customs supervision required

4. Re-export Procedure

Goods imported and re-exported without processing
Simplified documentation
Time limits apply
Must demonstrate goods not consumed

G. COMPLIANCE & ENFORCEMENT

1. Post-Clearance Audit

Time limit: Customs may demand additional duties within 5 years
Regular risk-based audits conducted

2. Appeals Process

Two-level appeal system :

Administrative level: Decisions may be appealed to higher administrative level
Court level: Appeal to independent court available (though specific process not detailed)

Time limits: Unknown for filing; unknown for ruling on appeals

3. Penalties for Violations

Violation	Penalty
Customs law violations	Fines specified in GCC Customs Law
False documentation	Administrative fines + possible criminal prosecution
Prohibited imports	Confiscation + fines + potential legal action
VAT non-compliance	Penalties under NBR regulations

4. Customs Valuation

Valuation method: Transaction value basis

Additional checks :

Customs may check online or request proof of payment
Valuation databases/reference prices used sometimes

Seizures :

Customs seizes and holds illicit items at their warehouse
Express carrier not required to store seized goods

5. TRADE AGREEMENTS NETWORK

A. MULTILATERAL AGREEMENTS:

Agreement	Status	Coverage
WTO	Member since 1995	Multilateral trade rules
GCC Customs Union	Member	Duty-free intra-GCC trade, common external tariff
GAFTA (Greater Arab Free Trade Area)	Member	Duty-free trade with Arab League members

B. BILATERAL FREE TRADE AGREEMENTS:

US-Bahrain Free Trade Agreement (effective 2006):

Bahrain’s most significant bilateral FTA
Immediate duty-free access for 100% of US industrial and consumer goods
Strong intellectual property protection
Services trade liberalization
Government procurement access

C. GCC COLLECTIVE AGREEMENTS

As GCC member, Bahrain participates in:

GCC-Singapore FTA: Signed
GCC-EFTA FTA: Signed (Switzerland, Norway, Iceland, Liechtenstein)
GCC-EU FTA: Negotiations (suspended)
GCC-China FTA: Negotiations ongoing
GCC-India CEPA: Negotiations ongoing
GCC-Pakistan FTA: Negotiations ongoing
GCC-Australia FTA: Negotiations ongoing
GCC-New Zealand FTA: Negotiations ongoing

D. BILATERAL INVESTMENT TREATIES

30+ BITs with major trading partners
Double Taxation Agreements: 40+ countries

6. MAJOR TRADE INFRASTRUCTURE

A. PORTS (managed by APM Terminals Bahrain and others):

1. Khalifa Bin Salman Port (KBSP)

Location: Hidd, Muharraq
Capacity: 1.1 million TEU
Operator: APM Terminals Bahrain
Connectivity: Adjacent to Bahrain Logistics Zone
Features: Semi-automated, deep-water (15 metres)

2. Mina Salman Port

Location: Near Manama city centre
Role: Cruise ships, traditional cargo
Future: Redevelopment planned

3. Sitra Port

Location: Sitra Island
Specialization: Industrial cargo (BAPCO refinery, Alba smelter)
Petroleum products, aluminium exports

B. AIRPORTS:

Bahrain International Airport (BAH):

Cargo Capacity: 1.0+ million tons annually
Cargo Terminal: Dedicated facilities
Airlines: Gulf Air cargo operations, DHL hub
Runway: 4,000 metres (accommodates largest freighters)
New Passenger Terminal: Opened 2021, cargo capacity expansion planned

C. FREE ZONES AND LOGISTICS ZONES

1. Bahrain Logistics Zone (BLZ)

Location: Adjacent to Khalifa Bin Salman Port
Area: 2.3 million sq metres
Activities: Warehousing, distribution, light assembly, re-export
Incentives: 100% foreign ownership, duty-free imports, tax benefits

2. Bahrain International Investment Park (BIIP)

Location: Near King Fahd Causeway (Saudi Arabia connection)
Area: 2.5 million sq metres
Activities: Manufacturing, logistics, food processing
Incentives: Foreign ownership, duty-free imports, streamlined licensing

3. Bahrain FinTech Bay

Financial technology hub
Trade finance innovation

D. INDUSTRIAL ZONES

Hidd Industrial Area: Aluminium smelter (Alba), industrial support
Sitra Industrial Area: Oil refinery (BAPCO), petrochemicals
Salman Industrial City: Light manufacturing, food processing

E. LAND BORDER CROSSINGS

1. King Fahd Causeway

Connection: Bahrain to Saudi Arabia (Khobar)
Length: 25 km
Traffic: Major land route for goods and passengers
Volume: 50,000+ vehicles daily (pre-COVID)
Customs facilities: Bahraini and Saudi customs at border

F. KEY INDUSTRIAL ASSETS

1. Alba (Aluminium Bahrain)

Location: Hidd Industrial Area
Capacity: 1.6 million metric tons per annum
World’s largest aluminium smelter (single site)
Line 6 expansion: US$3 billion project, completed 2019
Ownership: 69.4% Bahraini government, 20.6% Saudi SABIC, 10% public
Strategic importance: 19%+ of Bahrain’s total exports

2. BAPCO (Bahrain Petroleum Company)

Location: Sitra
Refining capacity: 267,000 barrels per day
Refinery modernization: US$5 billion+ program ongoing
Strategic importance: Refined petroleum (30%+ of exports)

3. Gulf Petrochemical Industries Company (GPIC)

Location: Sitra
Products: Methanol, urea, ammonia
Joint venture: Bahrain, Kuwait, Saudi Arabia

7. EMERGING TRENDS & FUTURE DEVELOPMENTS

A. 2024 Foreign Investment Liberalization

Decision No. 22 of 2024 (April) :

Opens authorized distribution sector to 100% foreign-owned companies
Eliminates previous local partner requirement
Attracts international brands to establish direct operations
Enhances Bahrain’s position as regional distribution hub

B. Aluminium Sector Expansion

Alba’s Global Leadership:

World’s largest smelter (single site)
1.6 million metric tons annual capacity
Raw aluminium exports: US$3.56 billion (19.2% of total exports)
Aluminium wire exports: US$642 million (world’s largest exporter)

Downstream Development:

Value-added products expansion
Automotive components, construction materials, packaging
Export diversification beyond primary metal

C. Refinery Modernization

BAPCO Modernization Program (BMP):

US$5+ billion investment
Increased efficiency, cleaner fuels
Export capacity enhancement
Refined petroleum exports: US$5.49 billion (29.7% of exports)

D. GCC Customs Union Enhancement

Common external tariff implementation
Coordinated risk management
Mutual recognition of Authorized Economic Operators
GCC-wide single window development

E. Digital Transformation

Customs Digitalization :

Full-time (24/7) automated processing
Electronic advance data submission
Risk-based selectivity
QR code verification (similar to other GCC countries)

E-Government Services:

Single window for trade documentation
Electronic customs declarations
Online VAT filing and payments

F. VAT Regulatory Framework

Deferral Scheme Expansion :

More registered importers eligible for VAT deferral
Improved cash flow for businesses
Simplified compliance

Zero-Rated Export Conditions :

Clear documentation requirements
90-day shipment window
Retention of proof of export

G. Trade Facilitation Implementation

WTO TFA Compliance :

Advance rulings available
Electronic processing capabilities
Risk management implementation
De minimis threshold (300 BHD for B2C)

H. US-Bahrain FTA Utilization

Tariff-free access to US market
Growing non-oil exports to US ($1.19 billion in 2024)
Attracting US investment in manufacturing and services

8. KEY CONTACTS & RESOURCES

A. GOVERNMENT AGENCIES:

Bahrain Customs Affairs
- Website: customs.gov.bh
- Email: info@customs.gov.bh
- Customs procedures, declarations, tariffs, advance rulings
Ministry of Industry and Commerce (MOIC)
- Website: moic.gov.bh
- Commercial registration, trade policy, investment licensing
- Foreign investment approvals, Decision No. 22/2024 implementation
National Bureau for Revenue (NBR)
- Website: nbr.gov.bh
- VAT administration, tax registration, returns, payments
- Import VAT deferral authorization
Bahrain Economic Development Board (EDB)
- Website: bahrainedb.com
- Investment attraction, business facilitation, sector development
Information & eGovernment Authority
- Website: iga.gov.bh
- E-government services, digital transformation
Central Bank of Bahrain (CBB)
- Website: cbb.gov.bh
- Financial services regulation, trade finance
Ministry of Oil and Environment
- Petroleum sector regulation, environmental permits
Ministry of Health
- Website: moh.gov.bh
- Pharmaceutical and medical device approvals
Ministry of Municipalities Affairs and Agriculture
- Food safety, agricultural imports

B. BUSINESS ORGANIZATIONS:

Bahrain Chamber of Commerce and Industry (BCCI)
- Website: bahrainchamber.bh
- Certificate of Origin, business registration, trade promotion
Bahrain Businessmen’s Association (BBA)
- Private sector advocacy
Bahrain Association of Banks
- Banking and financial services
American Chamber of Commerce in Bahrain (AmCham)
- US-Bahrain trade facilitation

C. TRADE PORTALS AND DIGITAL PLATFORMS:

Platform	Purpose	Website
Customs Website	Customs information, forms	customs.gov.bh
NBR Portal	VAT registration, returns	nbr.gov.bh
Sijilat	Commercial registration	sijilat.bh
Invest in Bahrain	Investment opportunities	investinbahrain.bh

D. PRACTICAL GUIDANCE FOR TRADERS:

For Exporters to Bahrain:

GCC Standards Compliance: Products must meet GCC standards or Bahraini standards
Arabic Labeling: Mandatory for all consumer products (food especially)
Halal Certification: Required for meat and poultry; must be from approved bodies
Ministry Approvals: Restricted goods require prior approvals
- Pharmaceuticals, medical devices → Ministry of Health
- Food products → Ministry of Municipalities
- Telecom equipment → TRA
VAT Compliance:
- 5% VAT due on most imports
- Can be deferred if importer is VAT-registered with NBR authorization
- Correct CR and VAT number essential for input tax recovery
Documentation:
- No consular invoices required
- Electronic documents accepted
- Express carriers can clear on behalf of consignee
De Minimis:
- 300 BHD threshold for B2C shipments
- No de minimis for B2B
Prohibited Items Check: Review prohibited list (weapons, drugs, etc.)
US-Bahrain FTA Benefits: US exporters may claim duty-free treatment

For Importers from Bahrain:

Certificate of Origin: Obtain from Bahrain Chamber of Commerce and Industry
Aluminium Purchases: Direct from Alba (world’s largest smelter)
Petrochemicals: GPIC for methanol, urea, ammonia
Refined Products: BAPCO for petroleum products
Quality Certificates: Available from manufacturers (internationally recognized)
US-Bahrain FTA: Bahraini exporters to US benefit from duty-free access

9. ECONOMIC IMPACT & STRATEGIC POSITION

A. Trade Balance Dynamics:

Year	Merchandise Trade Balance (US$ bn)
2021	4.9
2022	8.2 (peak)
2023	4.5
2024	3.6

2024 Performance:

Trade surplus: US$1.6 billion (merchandise balance US$3.6B)
Export decline: 8.84%
Export-Import Coverage Ratio: 109% (US$18.5B exports vs. US$16.9B imports)

B. Global Strategic Position:

Aluminium Superpower: World’s largest aluminium smelter (Alba), 19.2% of exports
Refining Hub: BAPCO’s Sitra Refinery, 29.7% of exports from refined petroleum
GCC Member: Integrated with Gulf Cooperation Council economies
US FTA Partner: Only GCC country (with Oman) with bilateral FTA with United States
Logistics Gateway: King Fahd Causeway to Saudi Arabia (largest export market)
Financial Hub: Islamic finance, banking services
Small but Open Economy: One of most trade-dependent in region

C. Competitiveness Indicators:

Indicator	Value	Global Rank
Economic Complexity (Technology)	-1.21	81st of 96
Economic Complexity (Research)	-0.65	91st of 137
Exports Per Capita	US$11,700	36th globally
Imports Per Capita	US$10,600	49th globally
GDP Per Capita	US$47,100	47th globally

D. Economic Diversification Challenges:

Export Concentration:

Top 3 exports: 58% of total (refined petroleum 29.7%, raw aluminium 19.2%, iron ore 9.1%)
Limited economic complexity: Technology complexity rank 81/96
Research complexity rank: 91/137

Positive Developments:

Aluminium downstream expansion (wire: world’s largest exporter)
Non-oil exports growing (dairy, glass, plastics, fertilizers)
Services sector expansion (financial, logistics, tourism)

E. Challenges:

Hydrocarbon Dependence: 30%+ of exports from refined petroleum; declining oil reserves
Small Domestic Market: 1.5 million population (approx.)
Limited Economic Complexity: Low technology complexity score (-1.21)
Fiscal Pressures: Government debt, subsidy rationalization
Regional Competition: GCC neighbors’ ambitious diversification plans
Climate Vulnerability: Water scarcity, extreme temperatures

F. Opportunities:

Alba Expansion: World’s largest smelter, downstream value-added products
Refinery Modernization: Cleaner fuels, export capacity
GCC Integration: Causeway to Saudi Arabia, customs union benefits
US FTA: Unique market access to United States
Foreign Investment Reforms (2024) : 100% foreign ownership in distribution
Logistics Hub: Strategic location, King Fahd Causeway
Financial Services: Islamic finance, fintech
Food Security: Agricultural investments, processing
Tourism: Cultural and heritage tourism development

SUMMARY OF BAHRAIN’S TRADE CHARACTERISTICS:

Dual Export Engine: Refined petroleum (29.7%) and raw aluminium (19.2%) dominate, together nearly 50% of exports
Global Niche Champion: World’s largest exporter of aluminium wire ($642M) and largest importer of pitch coke ($201M)
GCC Integration: Saudi Arabia (#1 partner) and UAE (#2) account for 27.4% of exports; Saudi also #1 import origin
Aluminium Superpower: Alba is world’s largest smelter (1.6M tons); aluminium-related products >20% of total exports
Refining Hub: BAPCO’s Sitra Refinery (267,000 bpd); refined petroleum exports $5.49B
US FTA Partner: Only GCC country with bilateral FTA with United States; US is #3 export destination ($1.19B)
2024 Regulatory Reform: Decision No. 22/2024 allows 100% foreign ownership in authorized distribution sector
Trade Surplus Normalizing: $1.6B surplus in 2024 (down from peak $8.2B in 2022)
WTO TFA Compliant: Advanced electronic processing, advance rulings, risk management, 300 BHD de minimis
VAT Framework: 5% standard rate; deferral for registered importers; zero-rated exports with 90-day shipment requirement

Bahrain represents a small but highly open Gulf economy with a unique dual specialization in aluminium and refined petroleum. With 49% of exports from these two sectors, Bahrain has built global leadership positions: Alba is the world’s largest aluminium smelter (1.6 million tons), and Bahrain is the world’s largest exporter of aluminium wire ($642M) .

The 2024 regulatory landscape saw significant liberalization: Decision No. 22/2024 opened the authorized distribution sector to 100% foreign-owned companies, eliminating previous local partner requirements . This reform enhances Bahrain’s position as a regional distribution hub and attracts international brands to establish direct operations.

Bahrain’s trade infrastructure is world-class, anchored by the King Fahd Causeway (connecting to Saudi Arabia), Khalifa Bin Salman Port (1.1M TEU capacity), and Bahrain International Airport. The US-Bahrain FTA provides unique market access to the United States ($1.19B exports), while GCC integration ensures deep regional ties.

Bahrain’s trade future depends on successful diversification beyond hydrocarbons and aluminium, attracting foreign investment through 2024 reforms , capturing downstream value in aluminium processing, and leveraging its strategic location and US FTA relationship. The country’s small size, open economy, and proactive reform agenda position it for continued, if measured, growth.