A series of agreements are bringing the two regional hubs closer together.

Trade and investment opportunities are continuing to open up between Bahrain and Hong Kong.

The Bahrain Chamber of Commerce and Industry and the Hong Kong Trade Development Council (HKTDC) signed an MoU at September’s Belt and Road Summit in Hong Kong, paving the way for business missions, conferences and training programs as well as new formalised channels for information exchange and collaboration. 

“Information flow is important, but human connectivity is even more important,” said Mohamed Abduljabbar Alkoheji, Second Vice-Chairman of the Bahrain Chamber, in an interview with Hong Kong Means Business.

“It is very important that both sides understand each other,” Mr Alkoheji added, emphasising the value of exchange programs for businesses, entrepreneurs and students to foster deeper connections.

Mr Alkoheji spoke alongside other heavyweight business leaders from Belt and Road countries and regions at a Business Plenary session at the Summit, exploring new opportunities created by the Belt and Road Initiative and the role Hong Kong can play.

The MoU follows two major bilateral deals that Bahrain and Hong Kong signed in March: a comprehensive avoidance of double taxation agreement (CDTA) and an Investment Promotion and Protection Agreement (IPPA). 

These pacts help create financial safeguards to encourage more direct investment and joint venture deals between the two regional hubs. 

As part of the IPPA deal, the Hong Kong SAR Government’s Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD) fund – which provides financial assistance to local businesses expanding abroad – has extended its reach to include Bahrain.

The Bahrain Chamber also signed an MoU with the Hong Kong General Chamber of Commerce in April to help facilitate mutual growth.

Governments from Hong Kong and Bahrain have been engaging more closely  in recent years, Mr Alkoheji noted, in a bid to strengthen economic and trade ties.

“Both countries have agreed that we should be focusing more on business relations,” he said. “That's why we've been here. We came here three months ago, and we’re here today. That shows our commitment.”

Bahrain and Hong Kong share many similarities, Mr Alkoheji pointed out, as financial and logistics centres that can facilitate access to larger regional markets while serving as gateways connecting the East and West.

In May, Bahrain’s King Hamad bin Isa Al Khalifa and Chinese President Xi Jinping signed a comprehensive strategic partnership, pledging closer cooperation on a range of areas, including investment, transport, renewable energy and the digital economy.

Both Bahrain and Hong Kong are also positioning themselves as innovation centres as part of their development plans, especially as a fintech and start-up hub.

“In Bahrain, we are moving from red tape to the red carpet,” Mr Alkoheji said.

Tamkeen, a labour fund set up to support the growth of the private sector in Bahrain, has provided BD2 billion (US$5.3 billion) in direct and indirect support since it was set up in 2006, with a particular focus on SMEs.

The initiative is an integral part of the Bahrain Economic Vision 2030, a far-reaching program unveiled in 2008 to strengthen and diversify the Kingdom’s economy.

Bahrain’s GDP recorded 2.4% year-on-year growth in real terms during 2023, driven primarily by a 3.4% expansion in the non-oil sector, according to preliminary data released by the Information and eGovernment Authority, while the oil sector witnessed a 2.4% year-on-year decline, making the island nation one of the most diversified economies in the Gulf Cooperation Council trading bloc. 

The financial services sector maintained its position as the largest contributor to GDP in 2023, accounting for 17.8% of GDP.

The Bahrain Chamber, which has around 40,000 corporate members, is organised around 10 committees representing different commercial sectors, including technology, health, finance and logistics.

The MoUs that the Chamber has signed can make it easier to connect these sectors with their counterparts in Hong Kong.

“Structure is very important in any aspect of business,” Mr Alkoheji said. “Our communication needs to be very clear in terms of what it is required to do business in Hong Kong. The MoUs that we have signed corroborate the need to focus more on our relationship.”

Original article published in https://hkmb.hktdc.com