Investment and Entrepreneurship Opportunities in Bahrain Manufacturing

This report analyzes the manufacturing sector of Bahrain, highlighting its growing nature and opportunities for domestic and foreign investors. It examines how entrepreneurs can attract investors, focusing on Bahrain's advantageous factors like 0% tax, lower costs, government grants, and 100% foreign ownership. The report includes a PESTEL analysis, covering political, economic, social, technological, legal, and environmental factors, and a SWOT analysis, identifying strengths, weaknesses, opportunities, and threats within the Bahraini context. Recommendations are made for businesses to adhere to local laws and leverage technology for promotion and efficiency. The study concludes that innovation and entrepreneurship are vital for Bahrain's growth, emphasizing the importance of PESTEL and SWOT analyses for informed investment decisions.

Innovation &
entrepreneurship

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
History about investment sector...................................................................................................1
Encouragement of investor for reason to invest:.........................................................................2
PESTEL analysis.........................................................................................................................3
SWOT analysis ...........................................................................................................................4
Recommendation for improvement ............................................................................................4
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Innovation is one of important component for business that allow them to introduce something
new in business or improve existing products and service of company. Innovation can be
implemented in business on different basis like technology, human resources, IT experts and
others things (Ambrose, 2020). It provide push to entrepreneurship as it allow entrepreneur to
get success in market. This project report includes analysation of manufacturing sector of
Bahrain that is a growing sector and provide opportunity for both domestic and foreign investors.
This project report includes analysation of how entrepreneur can motivate investor to invest in
manufacturing sector of Bahrain. It also includes analysation of SWOT and PESTEL in context
of specific sector of Bahrain. Moreover, it includes suggested change to business and marketing
company in order to make better choices.
MAIN BODY
History about investment sector
Manufacturing sector is one which belongs to 15-37 vision of ISIC. In this, values added can be
described as net outpoint of sector after addition if all output and subtraction of intermediate
input. It can be calculated by business without making deduction for purpose of depreciation of
fabricated assets as well as degradation of natural resources. It is a sector that adds values by
providing contribution to GDP. Values created by manufacturing sector in Bahrain during period
was 15.46% with 10.11% in the year 1985, with 19.05% with 1995. Latest values created by this
sector is 18.13 in the year 2020 (Manufacturing Business Opportunities, 2022). Manufacturing
sector is one of important sector in economy of Bahrain as its add values to manufacturing in
term of GDP.
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Manufacturing and operating sector of Bahrain is an important sector in economy that allow
them to avoid various logistical and financial challenges faced by companies. Bahrain is offering
lower operating cost to company, providing trained and qualified workforce, strategic location,
world class infrastructure and other things that make them ideal regional base.
Encouragement of investor for reason to invest:
There are various reason for which investor should make investment in manufacturing
sector of Bahrain. It is a growing sector that contribute to GDP of economy and also create
various opportunity for business (Cécora, 2019). FDI and direct investment investor will get
various advantage in business by investing in this sector. Some of reason for which business are
getting advantage of this sector are mentioned below:
0% tax: in manufacturing sector, government is charging 0% corporate income tax and
personal tax that provide benefits for both foreign direct investment and domestic investment. It
saves cost of company in order to carry out its business in Bahrain that create favourable
situation for business.
56% lower cost: Bahrain is a country that create favourable situation for business as it
reduce cost of manufacturing upto 56% (Bahrain: Share of manufacturing, 2022). It create
opportunity for business to offer its products at lower cost to customers and also allow them to
get cost advantage in market.
Government grants: Government of Bahrain is also providing opportunity for business
by offering them grants (Cunningham, et. al. 2019). It allow them for purpose of reducing cost
of companies that create opportunity for investor to increase return on investment.
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Low cost leases: FDI investor and direct investment investor also get advantage by
getting lower cost leases for industrial purpose. It is advantage for both foreign investor and
direct investor as there is not additional feels and services charge are charged by companies.
100% foreign ownership: Bahrain provide 100% foreign ownership to foreign
customers to manufacturing and distribution sector without putting restriction over them. It is a
opportunity for foreign investor to get full ownership of business in another country.
PESTEL analysis
It is an analysis that allow business to use identify factors that create impact over
business in manufacturing sectors. Explanation of these factors in context of Bahrain are
mentioned below:
Political factors: It is a factor that consist different rules and regulation made by government in
order to interfere in business and also stability in political environment of country. Government
of Bahrain provide various support to business in manufacturing sector (Kyvik, 2018). It is
offering various grants to business and also offering relaxation to business in order to attract
more foreign and domestic investors.
Economic Factor: It is a factor which is influenced with economic growth and stability in
economy of a country. Bahrain is offering exemption in custom duty to business that allow them
to saves cost of custom duty. There is also availability of low cost leases which also create good
impact over cost of company.
Social Factor: It is a factor that provide opportunity for business as there is lower cost of living
in in Bahrain that allow international companies to employ employees in Bahrain. There is
decrease in business activities in Bahrain due to Ramadan.
Technological factors: Bahrain is one of country that is growing in tern of information and
technology. It provide various opportunity for business to increase its operation and also to
improve efficiency of business. On basis of these advance technology, manufacturing sector is
decreasing its cost that provide opportunity for investor to invest in this sector.
Legal Factor: There are two type of laws existed in Bahrain including islamic law and common
law. It create probes for business in manufacturing sector as they needs to consider both of these
laws. Bahrain also introduce laws related to global standards that provide recognition to its
organisation at global level (Lounsbury, et. al. 2019). It allow business to implement anti
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discrimination laws and others that provide opportunity for business to improve satisfaction of
employees.
Environmental Factor: It is one of factor that is related to environment protection, pollution
control, weather condition of a country. There is increase in desertification in Bahrain and oil
spills that create damage for environment. It create impact over image of company which is
investing in that country as they are contributing for harm to environment.
SWOT analysis
It is one of analysis that allow business to identify factors like strength, weakness,
opportunity and threat for business. Explanation of this SWOT analysis on basis of which
Bahrain is mentioned below:
Strength Weakness
 Bahrain offering 100% foreign
ownership that allow them to attract
more customers in business.
 It is offering lower setup, operating
cost, lower cost of operating expenses,
construction, manpower cost and
others.
 Bahrain is an island and its economy is
depended on economy of Saudi as well
as Qatar.
 Market of Bahrain is competitive as
there are different marketing players.
Opportunity Threat
 Manufacturing sector of Bahrain is one
of growing sector due to lower cost of
production.
 It also get opportunity in new market as
well as technology that provide
excellent start up.
 There are religious clashes occur in this
country among Sunnis and Shiites that
create instability in that country.
 There is increasing competition in this
industry that results in reduction in
profit.
Recommendation for improvement
It is recommended to business to adopt all types of laws and legislation in business
including Islamic and common. It allow them to avoid interruption of government and other
regulatory authority in business in manufacturing sector. It is important as it allow business for
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purpose of avoiding interruption in business and also avoid conflicts among employees who
belong from different religion.
It is also suggested to business and marketing to consider technological factor in business
as there is advancement of technology in Bahrain that provide opportunity for business. It allow
them to digital method for purpose of promotion of products and service that will increase reach
of its products and also for reducing cost of company. It allow business to use technology for
improving efficiency and productivity of company. It allow them to get competitive advantage in
market and allow them to target large customer base.
CONCLUSION
From above mentioned project report, it can be concluded that innovation and
entrepreneurship is one of important components for growth of a country. There are different
reason on basis of which investor of Bahrain can invest in manufacturing sector of country like
lower cost of manufacture, government grants, low leases cost for space to carry out operation of
company. It is important for investors to identify factors that can affect investment before
investing in specific factors. For this, they needs to conduct PESTEL and SWOT analysis.
PESTEL analysis is one of analysis that identify factors like regulation of government, growth of
economy, demographic factors and cultural factors, laws and legislation, advancement of
technology and environmental regulation.
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REFERENCES
Books and Journals:
Ambrose, R.O., 2020. IEEE/IFR Innovation & Entrepreneurship Award. Evaluation, 2020,
pp.06-17.
Cécora, J., 2019. Cultivating grass-roots for regional development in a globalising economy:
innovation and entrepreneurship in organised markets. Routled
Cunningham, et. al. 2019. The impact of university focused technology transfer policies on
regional innovation and entrepreneurship. The Journal of Technology Transfer, 44(5),
pp.1451-1475.
Kyvik, O., 2018. The global mindset: A must for international innovation and entrepreneurship.
International Entrepreneurship and Management Journal, 14(2), pp.309-327
Lounsbury, et. al. 2019. Culture, innovation and entrepreneurship. Innovation, 21(1), pp.1-12.
Online:
Manufacturing Business Opportunities, 2022. [Online]. Available through:
<https://www.bahrainedb.com/business-opportunities/manufacturing>
Bahrain: Share of manufacturing, 2022. [Online]. Available through:
<https://www.theglobaleconomy.com/Bahrain/Share_of_manufacturing/>
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