Bahrain targets wealth managers as finance overtakes oil GDP
Bahrain is pitching itself as a niche alternative to Dubai for global wealth managers after financial services overtook oil as its largest GDP contributor, even as regional drone attacks test its digital resilience.
Financial services overtook oil as Bahrain’s largest contributor to real GDP in the third quarter of 2025, accounting for 17.6% of total economic output last year. The milestone underscores a long-term diversification push, with non-oil sectors now representing roughly 85% of the kingdom's GDP.
That growth faces a severe physical test following drone strikes in early March that hit two Amazon Web Services (AWS) data centers in the UAE and damaged a third facility in Bahrain. The attacks knocked all three offline, disrupting banking, payment systems, and enterprise software across the region. AWS warned that recovering from the physical damage would be "prolonged."
Despite the regional conflict, the Economic Development Board (EDB) reports that investors already in the pipeline are proceeding with capital deployments. “We’ve not seen much disruption overall,” said EDB CEO H.E. Noor bint Ali Alkhulaif, though she noted that logistics-dependent manufacturing and tourism require route recalibrations.
To capture incoming capital, Bahrain is avoiding direct competition with Saudi Arabia or the UAE over mega-projects. Instead, the EDB is targeting subsectors like wealth management and family offices, specifically courting prospects in Europe and Asia. “Dubai can be a saturated market at times, and Bahrain offers a good alternative for many of those companies,” Alkhulaif said.
The kingdom is backing this pitch with aggressive regulatory reforms modeled on jurisdictions like Singapore and Switzerland. It remains the only country globally with a "Data Embassy" law, enacted in 2018, which allows foreign companies to host data locally while keeping it under their home country's legal jurisdiction. Furthermore, AWS operates two Cloud Innovation Centres in Bahrain—the only location outside the U.S. with more than one—to capitalize on what the company says is the region's strongest demand for AI applications.
On the industrial front, Bahrain is positioning itself as a manufacturing and logistics service hub for Saudi Arabia's development boom. The upcoming U.S. Trade Zone will offer American businesses exemptions from customs duties on raw materials and machinery. Additionally, the EDB is preparing to leverage the newly signed U.K.-GCC free trade agreement, a deal covering £53 billion ($71 billion) in current trade that could boost bilateral volumes by 19.8% annually.
