When it comes to outsourcing, businesses are always on the lookout for locations that offer the perfect blend of skilled labor, cost efficiency, and a business-friendly environment. Enter Bahrain, a small but mighty player in the MENA region that’s quickly becoming a hotspot for Business Process Outsourcing (BPO) and IT Outsourcing. With its strategic location, highly educated workforce, and competitive operating costs, Bahrain is not just another outsourcing destination- it’s a game-changer.
But don’t just take our word for it. The numbers speak for themselves. The BPO market in Bahrain is projected to grow by 4.21% from 2025 to 2029, reaching a market volume of US$52.63 million. Meanwhile the IT outsourcing market is expected to grow even faster, by 8.38%, with an expected market volume of US$87.71 million by 2029.
A Cost-Competitive Hub in the Heart of the MENA Region
Let’s start with the bottom line: cost. For businesses, outsourcing is often about reducing expenses without compromising on quality. And Bahrain delivers on both fronts. Operating costs in Bahrain are up to 40% lower than in neighboring hubs like the UAE, Qatar, and Kuwait. For example, office space in Bahrain costs just USD 10 per square meter, compared to USD 35 in the UAE and USD 53 in Qatar. That’s a significant saving, especially for companies looking to scale their operations.
But it’s not just about real estate. Employee costs in Bahrain are also consistently lower at all levels, thanks in part to support from Tamkeen, an organization that offers salary subsidies and fully-funded training to develop the private sector. This means you can access a skilled workforce without breaking the bank.
And let’s not forget the tax benefits. Bahrain has one of the most lenient corporate and personal tax regimes in the Gulf, allowing companies to enjoy 100% foreign ownership with full repatriation of capital, profits, and dividends. For businesses, this translates to more money staying in their pockets.
A Highly Skilled, Bilingual Workforce
Of course, cost savings alone aren’t enough. To succeed in outsourcing, you need a workforce that can deliver high-quality services. And here, Bahrain truly shines. The country boasts one of the most highly-skilled, bilingual workforces in the region, with over 90% of the ICT workforce fluent in English. This is a huge advantage when dealing with global clients.
But it’s not just about language skills. Bahrain’s workforce is also highly educated, with 89% of ICT employees holding a bachelor’s or master’s degree. What’s more, the workforce is young and experienced, with an average of seven years of ICT experience. This combination of youth and expertise makes Bahrain’s workforce agile, adaptable, and ready to tackle the challenges of modern outsourcing.
A Business-Friendly Environment with World-Class Infrastructure
Setting up an outsourcing operation in a new country can be daunting, but Bahrain makes it easy. The country’s liberal, well-regulated economy and business-friendly commercial environment have earned it a reputation as one of the most welcoming destinations for foreign investment. Established companies can take advantage of 100% foreign ownership, and the process of setting up a business is straightforward and efficient.
But it’s not just about ease of doing business. Bahrain also offers world-class infrastructure to support your outsourcing needs. The country is well connected internationally, with four undersea cables and satellite links ensuring reliable connectivity. This is crucial for businesses that rely on seamless communication with clients and partners around the world.
Bahrain’s ICT sector is also well-developed, ranking 51st in the world for network readiness. The country has a powerful ecosystem of ICT service providers, technology developers, and channel partners, all supported by technical backup from Tamkeen. Whether you need state-of-the-art office space in locations like Bahrain Financial Harbour or the World Trade Center, or access to cutting-edge technology, Bahrain has you covered.
A Strategic Location with Easy Access to the GCC and Beyond
Location matters, and Bahrain’s strategic position at the heart of the Gulf puts it within easy reach of the GCC. With less than an hour’s flight to neighboring GCC countries and a world-class international airport, Bahrain is perfectly positioned for businesses looking to tap into the region’s growing opportunities.
But it’s not just about proximity. Bahrain also offers a straightforward visa-on-arrival system for nationals of 69 countries, making it easy for businesses to welcome clients, partners, and employees from around the world. Whether you’re pursuing new opportunities or ensuring your team can travel swiftly in and out of the country, Bahrain’s location and accessibility are major advantages.
A Growing Workforce Ready to Meet Demand
The demand for outsourcing services is on the rise, and Bahrain’s workforce is ready to meet it. Over the last decade, the workforce in Bahrain has exploded, rising from nearly 700,000 to over 1 million individuals. And with the population expected to surpass 2 million before 2030, the labor force is set to grow even further.
Bahraini employees currently represent 35% of the total workforce, with higher percentages in the government (85.4%) and semi-government sectors (67.7%). In the private sector, the percentage is lower at 25.4%, but this is where the opportunity lies. With foreign workers holding 631,763 active permits by the end of Q2 2024- a 3.8% increase from the previous year- Bahrain’s labor market is dynamic and diverse.
What’s more, the labor force participation rate of expatriates in Bahrain is a staggering 87.8%, compared to 47.8% for citizens. This high participation rate ensures that businesses have access to a large pool of talent, ready to meet the demands of the outsourcing industry.
Before We Go: Why Bahrain is the Outsourcing Destination of Choice
In a world where businesses are constantly looking for ways to optimise costs and improve efficiency, Bahrain stands out as a prime destination for outsourcing. With its cost-competitive environment, highly skilled workforce, business-friendly policies, and strategic location, Bahrain offers everything a company needs to thrive in the BPO and IT outsourcing sectors.
But beyond the numbers and the infrastructure, there’s something else that makes Bahrain special: its people. Known for their warmth, hospitality, and openness, Bahrainis create a welcoming environment for businesses and expats alike. It’s no wonder that HSBC’s 2015 Expat Explorer ranked Bahrain fourth out of 39 destinations for overall expat satisfaction, ahead of countries like Germany, Canada, and Australia.
So, if you’re looking to offshore your BPO operations or expand your IT outsourcing capabilities, Bahrain should be at the top of your list. The opportunities are vast- and the time to act is now.
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