But for Bahrain, the smallest of the GCC states, its strengths come not from its size but from its strategic positioning, according to the head of the government agency tasked with bringing investment into the kingdom. 

“The good thing about being a small country is that we have no ego, so we’re not trying to compete with the big players,” H.E. Noor bint Ali Alkhulaif, the CEO of Bahrain’s Economic Development Board (EDB), tells Fortune.

“We know what our advantages are and where we can play better, and that’s what we double down on.”

Rather than attempting to compete head-on with its larger neighbors in signing multibillion-dollar deals, the small island kingdom is carving out a distinctive strategy centered on agility, advanced regulation, skilled talent, and niche specialisms to position itself as a complementary investment destination. 

The Bahrain EDB champions five key sectors: financial services, manufacturing, logistics, tourism, and information communications technology.

“Within each sector, we identify subsectors where we see the strongest potential, and revisit them regularly, refining our priorities in line with changing market conditions,” says H.E. Noor, who also serves as Bahrain’s Minister of Sustainable Development.

Bahrain’s financial services industry overtook oil as the largest contributor to real GDP in Q3 2025 and accounted for 17.6% of GDP in 2025. 

Within the sector, Bahrain’s EDB is now focused on expanding wealth and asset management and attracting family offices, particularly from key financial centres in Europe and Asia and markets where Bahrain maintains well-established bilateral relationships.

The Board attended the Milken Institute’s annual conference in Los Angeles in May where it courted various high-net-worth individuals. 

“Dubai can be a saturated market at times, and Bahrain offers a good alternative for many of those companies.” 

Over the past year, Bahrain has accelerated reforms to its trust laws, residency programs, and regulatory environment after studying successful international wealth hubs including Jersey, Guernsey, Switzerland, and Singapore.

Having pioneered the Gulf’s banking sector more than a century ago with the opening of Standard Chartered (then the Eastern Bank) in 1920, the kingdom remains one of the GCC’s most progressive financial regulators.

It led the way with the launch of the region’s first regulatory sandbox for fintech firms in June 2017, and has been an early adopter of open banking, crypto regulation, and stablecoin legislation.

“We know that for a lot of global banks, they would want or need to have their headquarters located either in the UAE or in Saudi,” H.E. Noor says.

“So our pitch to them is we’ve got a really well-developed fintech sector, so if you’re looking to start your digital bank or bring in some of those services, we’ve got the right environment, and we have regulations that you’re not going to find in the rest of the GCC.”

Amazon Web Services (AWS) has become an anchor of Bahrain’s digital transformation. The tech company operates two Cloud Innovation Centres in Bahrain and is the only country outside the U.S. to host more than one. Cloud Innovation Centers (CICs) are collaborative hubs where institutions work with AWS experts to solve real-world problems.

It’s also supported local workforce development through AI training and digital upskilling initiatives aligned with the kingdom’s national priorities.

“We’re having a lot of discussions with AWS, looking at how to grow their AI footprint in the country and how that can also be used to service the wider region,” says H.E. Noor.

“Already there is strong organic growth in that sector. AWS has told us that, among the services they offer in the region, the greatest interest in AI and the largest AI applications come from Bahraini institutions.” 

In 2018, Bahrain became the first country to implement a “Data Embassy” law that allows foreign institutions to store their data under the jurisdiction of their home countries while it is hosted by data centers in Bahrain. 

This means, for example, that a U.S. company’s data can only be accessed by other parties through a U.S. court order. It remains the only country to have such a law. 

Meanwhile, in February last year, Bahraini tech group Beyon signed an agreement with Oracle to provide it with access to Oracle Cloud Infrastructure’s (OCI) Dedicated Region offering.

By using Beyon’s local data center infrastructure, its customers will be able to access Oracle’s cloud services without any data leaving the country and maintaining data sovereignty.

“Technology is a big focus area, and the U.S. overall is a strategic market for us,” said H.E. Noor who acknowledged that events in the region over the last few months have shifted the conversation from digital sovereignty to digital resilience. 

In early March, two Amazon Web Services (AWS) data centers in the UAE were directly hit by drones, while another facility in Bahrain sustained damage from a nearby drone strike.

The attacks knocked all three data centers offline, disrupting banking services, payment systems, delivery platforms, and enterprise software across the region. AWS shifted computing workloads to other regions and warned that recovery was expected to be “prolonged” because of the extent of the physical damage.

The EDB says that despite the Iran war, investor sentiment towards Bahrain remains relatively buoyant. 

“The investors we had already lined up to work with or were already in the pipeline carried on with their investments. We’ve not seen much disruption overall,” adds H.E. Noor.

However, she acknowledges that both tourism and the manufacturing sector have seen an impact.

“That’s mostly to do with the logistics sector and that’s the area that we need to work on. So, it’s a case of rethinking which shipping routes manufacturing companies would use. We also need to recalibrate the tourism sector.” 

A new gateway for U.S. investors 

Manufacturing has served as a cornerstone of Bahrain EDB’s strategy, drawing particular interest from U.S. investors.

Bahrain’s high-quality industrial infrastructure, such as the Bahrain International Investment Park and the Bahrain Investment Wharf, is already home to Mondelēz, chemicals company BASF, dairy multinational Arla, and the consumer goods business Reckitt.

Upcoming Industrial Zones include the U.S. Trade Zone (USTZ) and the Aluminum Downstream Cluster. 

The USTZ will become a hub for manufacturing and logistics activities and will offer U.S. businesses advantages, including exemptions from customs duties for imported raw materials, manufacturing, spare parts and construction machinery.

“Our legacy aluminum smelter and the aluminum downstream sector are big industries for us,” says H.E. Noor. 

“But we’re now also looking at advanced manufacturing, fast-moving consumer goods, as well as trying to improve food security.

“We want to position ourselves as a service center to the region. A lot of development is happening in Saudi, and there’s a lot of materials that need to be produced and shipped to that market. So we try and encourage the companies serving that market to come closer to the consumer.”

U.K.-GCC FTA

The EDB is also looking to capitalize on the recently secured U.K.-GCC free trade agreement (FTA).

The long-delayed FTA was signed in May after four years of negotiations and establishes a framework that will boost bilateral trade. The UK’s total trade with the GCC is currently £53 billion ($71 billion) and could increase by 19.8% annually as a result of the agreement.

“I think everyone couldn’t quite believe it when it actually happened,” said H.E. Noor, who sees opportunities for additional cooperation across the aluminum sector, manufacturing more broadly, as well as the energy, life sciences, and healthcare sectors.

“We’ve discussed Bahrain’s energy capacity as a potential advantage for UK companies,” she adds.

“In life sciences and healthcare, we’ve begun discussions with companies on partnerships that would enable UK firms to establish operations, conduct trials and testing, support startups and scale-ups, and leverage technology to expand their presence. So, you will hopefully see a very clear plan starting to emerge once it is officially signed, but the work is starting now to make sure that we’re ready for it.”

Growing the pie

With the Gulf’s glitzy real estate ventures and multi-billion-dollar giga-projects often dominating the headlines, it is easy to overlook how far Bahrain has come in its own diversification journey. Today, approximately 85% of the kingdom’s GDP derives from the non-oil economy.  

While the EDB remains committed to Vision 2030, the Board has begun discussing what Vision 2050 would entail. 

“One of the targets that we need to aim for is to grow the value of the economy rather than just say ‘diversify, diversify, diversify’,” says H.E. Noor. 

“We always compare ourselves to Singapore because we’re roughly the same size as Singapore in landmass, but their GDP is 10 times larger than Bahrain’s, although their population is only four times bigger in size. So, it’s a question of finding productivity gains and increased value creation.” 

While the EDB already has growth targets in mind, H.E. Noor declines to share them: “I don’t want to burst any bubbles, but they’re ambitious.”

Five years from now, she says success would be measured by continued economic growth, steadily rising GDP and a globally recognized national brand.

Too often, she argues, overseas investors view the Gulf Cooperation Council as a single, homogeneous market.

“We want people to immediately recognize what Bahrain offers investors,” she says.