Free Trade Agreements

Duty-free access to neighboring GCC countries is possible from Bahrain. Exported products must have a minimum of 40% of local value added to qualify for duty-free status, yet recently the need to have a 51% local equity has been abolished across the GCC, and therefore 100% foreign owned companies can produce “Made in GCC” products which are exempted of import duties within the GCC if they meet the 40% added value requirement (the added value requirement is established after producing the annual financial reports of the company, therefore the first year would not be included in the duty exemption).

Bahrain is a member of the Gulf Cooperation Council (GCC) which consists of Kuwait, Qatar, Bahrain, United Arab Emirates, Oman, and Saudi Arabia. Membership confers special trade and investment privileges within those countries. The GCC is become a full-fledged customs union and a unified tariff of 5% on foreign imports is applied on all the GCC countries by the beginning of 2003. Bahrain is also a member of the Arab League. Recently, Arab League states have agreed to negotiate an Arab Free Trade Zone. Under the arrangement, countries should negotiate tariff reductions of 10 percent per year. Provision may be made for more expeditious tariff reductions on a reciprocal basis between Arab States.

Bahrain and the WTO