Bahrain has emerged as the most cost-competitive location in the Gulf Cooperation Council (GCC) for operating a financial services firm with an integrated tech hub, according to a new report by Ernst & Young’s United States office.
The report, titled ‘Cost of Doing Business in the GCC – Financial Services Sector’, highlights Bahrain’s 48 percent cost advantage over its regional peers.
The study reflects the growing role of technology and innovation in shaping the GCC’s financial services landscape. It evaluated both direct and indirect annual operating expenses, including office rental, talent acquisition, licensing fees, taxation, and visa and residency costs across Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
Bahrain’s advantage
Bahrain outperformed its neighbors across multiple categories. According to the report, labor costs for financial services tech hubs in the kingdom are up to 24 percent lower than the GCC average. The cost of annual business and licensing fees in Bahrain is up to 85 percent cheaper, while office space rental offers up to 60 percent in savings.
Ali Al Mudaifa, chief of business development at the Bahrain Economic Development Board (Bahrain EDB), said: “In today’s digital economy, establishing robust tech hubs is essential for financial services firms to innovate, compete, and stay ahead. Bahrain is positioning itself as a regional leader in this space, offering a supportive environment that combines cost-efficiency, cutting-edge infrastructure, and a forward-looking regulatory framework.
“The country’s financial services sector not only provides cost advantages but also creates opportunities for sustainable growth and technological leadership in the GCC. Our goal is to empower global financial institutions to leverage Bahrain’s unique advantages and highly skilled talent to drive technological advancement across the region.”
The report also highlights Bahrain’s streamlined regulatory environment. The Central Bank of Bahrain (CBB) acts as the sole financial regulator, offering a unified and category-based licensing system that provides firms with greater operational flexibility. This has made the island nation an increasingly attractive base for global financial institutions seeking to expand in the region.
Fintech and innovation hub
Bahrain’s growing reputation as a fintech and innovation hub is supported by global rankings and major investments. According to the IMD World Competitiveness Ranking, Bahrain is ranked 4th globally for skilled labor and 6th for digital and technological expertise.
Several multinational firms have already established or expanded their tech operations in Bahrain. Citi’s Global Tech Hub has committed to employing 1,000 Bahraini coders, while J.P. Morgan’s Global Technology Center is set to create 200 high-skilled jobs in the kingdom.
The report notes that talent is one of the most significant cost drivers in financial services.
Attracting talent
In the EY case study of tech hubs, over half the workforce comprised highly skilled roles such as data analysts, software developers, and web developers, positions that Bahrain continues to attract with its talent pool and competitive cost structure.
Andrew Phillips, partner/principal and co-leader of Quantitative Economics & Statistics (QUEST) at Ernst & Young said: “Tech hubs are the heartbeat of modern financial services, enabling firms to develop innovative solutions, attract top talent, and expand their digital capabilities. Bahrain’s competitive costs provide an advantageous business climate for financial services innovation.
“Bahrain’s cost advantages relative to other GCC locations allow financial services tech hubs to direct their financial resources toward innovation rather than basic operating expenses.”
As Bahrain cements its position as a strategic gateway for financial services in the GCC, its blend of affordability, regulatory ease, and tech-savvy workforce is proving to be a key differentiator in the region’s evolving financial ecosystem.
