Bahrain: Overview

RENTAL YIELDS

Yields are high in Bahrain at 10%

Yields are estimated by local realtors at well over 10%, given the present shortage of properties for rent and strong demand.

The rental market is almost entirely foreign-driven, and has grown greatly since the massive increase in US army numbers, who live largely in Juffair. More recently the Saudi oil boom has meant a substantial increase in new residents, who drive across the straits rather than live in Saudi. The World Trade Centre is another attraction. Finally, the construction boom itself is fuelling rental demand.

TAXES AND COSTS

Last Updated: May 04, 2009

Complete tax freedom

There are no income taxes in Bahrain. There is no withholding tax, capital gains tax, gift or inheritance tax.

The system is the same for residents and non-residents.

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BUYING GUIDE

Last Updated: Nov 16, 2007

Transaction costs are very low in Bahrain

Roundtrip transaction costs, i.e., the total cost of buying and selling a property, in Bahrain are very low, at the most being around 5%.

The major variable is a possible 3% landscape maintenance charge, payable to the developer. Together with the real estate agent’s fee, that adds up to 4%, payable by the buyer. The buyer and seller share the real estate agent's fee of 1%.

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LANDLORD AND TENANT

Last Updated: Oct 05, 2006

Bahrain's pro-landlord rental market

Bahraini landlord and tenant market practices are PRO-LANDLORD.

Rents: Initial rents can be freely determined, as can rent increases. Three months' rent are paid in advance before a tenant can move in.

Tenant eviction: Landlords must serve a 60-day notice for termination of tenancy. In the absence of notice, tenancy agreements are automatically renewed on a monthly basis.

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ECONOMIC GROWTH

Last Updated: Oct 14, 2008

The freest and most diversified economy in the GCC region

The Kingdom of Bahrain, with a population of around one million and a land area of 717 sq. km., is the smallest of the GCC countries. The country has a strong economy with 6.2% projected GDP growth for 2008.

Bahrain is one of the founding members of the World Trade Organization. In 1971, it became a member of the United Nations and the Arab League. Then in 1981, Bahrain became one of the six founding members of the Gulf Cooperation Council (GCC). In September 2004, the U.S.-Bahrain Free Trade Agreement was signed.

In 1932, Bahrain became the first gulf state to discover its oil resources. Revenues from oil had brought improvements in the quality of education and health care in the kingdom.

However, the declining oil production and reserves had urged the Bahraini government to diversify the economy. The kingdom has transformed itself to become the Gulf’s financial and banking centre. The manufacturing, real estate, construction, services and information technology sectors have also benefited from the economic diversification plan.

Bahrain is the most democratic country in the region. In 2001, Bahrainis strongly backed proposals put by the emir - now the king - to turn the country into a constitutional monarchy with an elected parliament and an independent judiciary.

Elections were held in 2002 for the 40-member Council of Deputies, the first such poll in nearly 30 years. The new body includes a dozen Shia MPs. The country has been enjoying increasing freedom of expression even in the local context, and monitors report that the human rights situation has improved.

The kingdom has the freest economy in the Middle East and is the 19th freest economy in the world, according to 2008 Index of Economic Freedom by Heritage Foundation.