Exploring Bahrain's Trading Scene: My Personal Journey

Bahrain is considered one of the most open economies in the Middle East and North Africa (MENA) region. The country has several free trade agreements in place and boasts excellent infrastructure and strong financial institutions, making it an attractive prospect for traders and investors. Bahrain is one of only two Gulf Cooperation Council (GCC) member countries to have a Free Trade Agreement (FTA) with the United States. The country also permits 100% foreign ownership of businesses or branch offices, without the need for a local partner, and has no tax on corporate or personal income, wealth, capital gains, or inheritance. As such, it has attracted many leading trading companies across a range of sectors, including construction, consumer electronics, and business services.

Forex trading in Bahrain

Bahrain is a high-income economy and an attractive destination for international forex brokers due to its residents' above-average first-time deposits. The country has a free-market economy without restrictions on capital flows and foreign exchange, making it a welcoming environment for investors.

The Central Bank of Bahrain (CBB) regulates the financial sector, but this does not extend to online forex trading using derivatives. While Bahrain has domestic banks offering online forex trading, international brokers capture most of the retail trading volume.

Forex Trading Regulations in Bahrain:

The CBB regulates the domestic market and physical forex trading conducted by licensed banks and market participants. However, online forex trading using derivatives is not regulated by the CBB. There are no restrictions for Bahrain residents to open offshore accounts, and global forex brokers are increasingly interested in the above-average deposits from forex traders in Bahrain.

Starting Forex Trading in Bahrain:

• Education: Forex trading is a highly skilled profession that requires a strong understanding of the market, strategies, and risk management.
• Choose a trusted broker: Select a reputable broker with a clean operational record, negative balance protection, and multiple regulatory licenses.
• Develop a trading strategy: Successful forex trading requires an effective strategy, appropriate risk management, and realistic expectations.
• Practice with a live account: While demo accounts can be useful, they don't fully reflect the psychological aspects of trading. Consider starting with a small live account to gain real-world experience.
• Follow market trends: Stay informed about economic, monetary, and political events that can impact price action and create trading opportunities.

Risks of Forex Trading in Bahrain:

Understanding the risks of forex trading is essential for traders to prepare and avoid potential pitfalls. Some key risks include:

• Unrealistic expectations: Marketing campaigns by some brokers and affiliates may promote unrealistic expectations about profits and capital requirements.
• Misuse of demo accounts: While demo accounts are useful, relying solely on them for education can lead to a lack of understanding of trading psychology.
• Scams and fraud: Beginner traders with limited knowledge of the forex market are particularly vulnerable to scams and fraudulent activities.
• Lack of quality trading software: This is especially important for algorithmic traders and scalpers, who require advanced tools and platforms.

Best Forex Brokers in Bahrain:

When choosing a forex broker in Bahrain, here are some key criteria to consider:

• Regulation and licensing: Ensure the broker is regulated by reputable financial authorities, such as the US Commodity Futures Trading Commission (CFTC) or the UK Financial Conduct Authority (FCA).
• Spreads and fees: Compare the spreads and trading fees charged by different brokers, as these can significantly impact your trading costs.
• Leverage: Leverage can amplify both gains and losses. Ensure the offered leverage aligns with your risk tolerance, and consider brokers that allow manual leverage adjustments.
• Trading platform: Look for a platform that suits your experience level and offers the necessary technical analysis tools. MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are popular choices.
• Deposit and withdrawal options: Ensure the broker supports convenient and secure payment methods for both funding and withdrawing from your account.

Some of the top forex brokers in Bahrain, based on factors such as fees, trading platforms, and regulatory compliance, include:

• Saxo: Offers a massive number of currency pairs and low withdrawal fees.
• Fusion Markets: Features low commissions, a wide range of currencies, and low withdrawal fees.
• Global Prime: Known for low forex fees, easy and fast account opening, and free deposits and withdrawals.
• IC Markets: Provides low FX commissions, tight spreads, and a wide range of currencies.
• Pepperstone: Offers low FX commissions, tight spreads, and excellent account opening services.
• Tickmill: Known for low FX commissions, a rich selection of currency pairs, and low withdrawal fees.
• VT Markets: Features low trading fees, fast account opening, and great customer support.

Trading companies in Bahrain

Bahrain is considered one of the most open economies in the Middle East and North Africa (MENA) region. Its numerous free trade agreements, excellent infrastructure, and strong financial institutions make it an attractive destination for traders and investors seeking access to regional and international markets. Bahrain's economy is so open that it permits 100% foreign ownership of a business or branch office in most sectors, without the need for a local partner.

Middle East Traders B.S.C. (c), also known as MET, is a family-owned business and one of the pioneering trading companies in the Middle East (GCC) region. It was established in 1951 by Sheikh Eshaq Bin Abdulrahman and his sons and co-founders Mohammed Bin Eshaq, Ebrahim Bin Eshaq, and Abdullatif Bin Eshaq. The company deals in porcelain and ceramic floor and wall tiles, construction solutions, storage solutions, sanitary ware fixtures, fittings and accessories, and vinyl flooring and wall coverings.

There are several other notable trading companies in Bahrain, including:

• Canar Trading Company: Provides information technology and office automation solutions, with brand partnerships including leading international IT brands.
• Almoayyed International Group: Established in 1979 with the aim of becoming one of the leading business conglomerates in Bahrain, with a focus on technological advancement in information technology.
• Eileen Trading: An export and import company specialising in tea, Arabic coffee, and dates.
• Al-Moayyed Trading & Contracting: Another member of the Almoayyed group of companies, established in 1979, with a focus on becoming a leading business conglomerate.
• Mohamed Ahmadi Company: A leading cleaning and maintenance company in Bahrain, established in 1975.

In addition to these, there are several other trading companies operating in Bahrain, such as Chateau Building Materials, Behzad Group, Yusuf Bin Ahmed Kanoo (YBA Kanoo), and Haji Ali Haji Co. (HAHCO). Bahrain's favourable economic policies and business environment make it an attractive destination for trading companies and investors alike.

Import and export regulations

Bahrain is considered one of the most open economies in the Middle East and North Africa (MENA) region, with several free trade agreements in place. The country permits 100% foreign ownership of businesses and branch offices, without the need for a local partner, and currently imposes no tax on corporate income, personal income, wealth, capital gains, withholding, or death/inheritance.

The Basic Customs Duty is a tariff imposed on goods transported across international borders. Bahrain applies a Common External Tariff (CET) of 5% on almost all imported goods, except for goods produced in the GCC region and countries with relevant international trade agreements, such as the United States. Certain goods, like paper and aluminium, are charged a 20% duty rate upon import. The country also prohibits the domestic production of alcohol and tobacco, and imposes high customs duties on the import of these products.

To import goods into Bahrain, importers or their local agents must complete a customs bill of entry, and it is recommended that they use a registered, licensed clearing agent. The importer must submit a customs declaration form, along with the following:

• Shipping agent delivery order
• Three copies of the original invoices from the exporter
• Two copies of the packing list with detailed weights, packaging, and goods classification
• Original certificate of origin
• Copy of the insurance policy
• Original bill of lading
• Import permit/approval for restricted goods
• Bank advice/guarantee (if applicable)
• Statistical declaration if the final destination is within GCC countries

After submitting the customs declaration, the procedure for customs clearance involves:

• Paying duties and fees at the cashier desk
• Submitting documentation to the customs clearing officer
• Paying cargo handling fees and arranging cargo movement
• Customs risk assessment and inspection of goods

There are also prohibited and restricted goods to be aware of when trading with Bahrain. Prohibited goods include those banned by the Unified Customs Law or other laws, such as used tires, wireless communication devices, weapons, and books/audio/video. Restricted goods, which require permits or approval, include live animals, animal by-products, fertilizers, insecticides, food products, alcohol, and military weapons.

Trading platforms and tools

There are several trading platforms available to those in Bahrain. Here is a list of some of the top ones:

• Plus500: This platform is great for international trading and is one of the most transparent and reliable brokers in the industry. It offers clear fees, a low minimum deposit of $100, and bonuses for first-time deposits. Plus500 provides access to futures contracts for some of the biggest indices and offers educational content for beginners.
• EToro: eToro is a great platform for beginners and casual traders, with an interactive and social trading experience. It offers more than 5,500 stocks and ETFs, including big names like Apple and Tesla, and allows trading with as little as $10 using fractional shares. eToro also has a free demo account with $100,000 in virtual dollars for practising trading strategies.
• IG Markets: This platform is known for its seamless integration with MetaTrader 4, a popular third-party trading platform with advanced charting tools, automated trading capabilities, and custom indicators. IG Markets offers CFD trading in stocks, forex, commodities, indices, ETFs, and more. They also provide educational resources such as webinars, tutorials, and market analysis.
• AvaTrade: AvaTrade is a well-regulated and secure CFD broker that gives users access to a wide range of markets. It is regulated in multiple jurisdictions and employs advanced security measures to protect client funds and information. AvaTrade offers competitive spreads and access to social trading through its proprietary AvaSocial platform.
• Exness: This platform stands out for its tight spreads, making it a cost-effective choice for traders. It offers MetaTrader 4 and 5, a dedicated mobile app, and a free demo account. Exness provides access to trade major asset classes with zero commission and competitive spreads starting from 0.3 pips on standard accounts.
• Interactive Brokers: This is the best online trading platform for traders in Bahrain, offering a wide variety of markets across 135 markets in 33 countries, including stocks, ETFs, options, futures, forex, cryptocurrencies, and more. Interactive Brokers is regulated worldwide by top-tier authorities and has recently released a new intuitive and easy-to-use trading platform.
• Pepperstone: This platform is known for its fast execution speeds, low fees, great trading tools, and award-winning instructional content. Pepperstone offers a wide range of assets, including forex, CFDs, indices, cryptocurrencies, stocks, and commodities.
• Alpaca Trading: Alpaca is a California-based broker founded in 2015 that provides API access to US-listed stocks, fundamental data, and historical data. It is great for advanced traders and developers looking for a strong platform for algorithmic trading. Alpaca is a member of FINRA and SIPC, and securities in client accounts are protected up to $500,000.
• IQ Option: This platform is user-friendly and feature-rich, offering CFD trading with low spreads, a cutting-edge trading interface, free demo accounts, and prompt customer support. It adheres to strict regulatory and safety standards, making it one of the most secure option trading platforms.

In addition to these platforms, Bahrain also has its own stock exchange, the Bahrain Bourse (BHB), founded in 1987. Bahrain is considered one of the most open economies in the Middle East and North Africa (MENA) region, with several free trade agreements and excellent infrastructure. It permits 100% foreign ownership of businesses in most sectors and has no tax on corporate income, personal income, wealth, capital gains, or dividends.

Trading and the Bahraini economy

Bahrain is considered one of the most open economies in the Middle East and North Africa (MENA) region. It has several free trade agreements in place and excellent infrastructure, and its strong financial institutions make it an attractive prospect for traders and investors. Bahrain is one of only two Gulf Cooperation Council (GCC) member countries to have a Free Trade Agreement (FTA) with the United States. In addition, the United States and Bahrain signed the Comprehensive Security Integration and Prosperity Agreement in September 2023, which outlines a commitment to grow bilateral trade and investment and cooperate in areas like telecommunications and emerging technologies.

Bahrain permits 100 percent foreign ownership of a business or branch office in most sectors, without the need for a local partner. The country currently has no tax on corporate income, personal income, wealth, capital gains, withholding, or death/inheritance. There are also no restrictions on the repatriation of capital, profits, or dividends. This makes Bahrain a very attractive prospect for businesses and investors. The Heritage Foundation ranked Bahrain as the world's 68th freest economy in its 2023 Index of Economic Freedom, behind only Qatar and the UAE among GCC member states.

Bahrain's real gross domestic product (GDP) rose by 4.9 percent in 2022, and the non-oil sector recorded a positive real GDP growth rate of 6.2 percent. Many US businesses have done well in Bahrain and are leaders in major sectors such as oil and gas, finance, engineering, and information and communications technology (ICT).

There are many successful trading companies in Bahrain, including Falcon Trading Company WLL, which boasts a showroom of 14,000 sq. ft that displays several world-renowned brands. Kais Middle East International Trading Company is another leading supplier to the Marine, Oil field, and Petrochemical Industries, with 15 branch offices worldwide. Other notable trading companies in Bahrain include Canar Trading Company WLL, Gulf Trading & Export Agency, and Khayber Trading Company.

Frequently asked questions