DAVOS: Bahrain is the only country so far that has implemented a data-sovereignty law, as it lays the groundwork for startups in tech-driven market sectors, Sheikh Salman bin Khalifa Al-Khalifa, the country’s minister of finance and national economy, said at the World Economic Forum in Davos on Thursday.
The government has developed regulations and infrastructure for technologies, and invested in people and higher education to create a fertile environment for entrepreneurs and foreign capital, he added.
In 2018, Bahrain became the first country to implement a “Data Embassy” law that allows foreign institutions to store their data under the jurisdiction of their home countries while it is hosted by data centers in Bahrain.
This means, for example, that a German company’s data hosted in Bahrain is subject to German law and can only be accessed by other parties through a German court order, the minister explained.
“Bahrain has led the world in regulation,” he said. “We are, and continue to be, the only country in the world with a data sovereignty law … This is groundbreaking stuff. You need to have laws and regulations that are ahead, and a regulatory environment where it’s easy to do business.”
Also in 2018, Bahrain introduced a Bankruptcy Law that effectively decriminalized the failure of a business. Previously, entrepreneurs were held personally liable for a company’s failure and could face jail time.
“We had to work a lot with the Ministry of Industry and Commerce to decriminalize failure, because it used to be the case that if you had a failed company, you would end up having criminal action against you,” Al-Khalifa said.
“The Bankruptcy Law was a very important step in fostering a culture of entrepreneurship.”
The minister was speaking at the annual meeting of the World Economic Forum in Switzerland during a panel discussion on the ways in which governments can support entrepreneurship, improve soft skills and reduce bureaucracy.
He said Bahrain had also invested in infrastructure designed to support AI-driven industries and connect the country to the “global data highway,” more formally known as “South East Asia-Middle East-Western Europe 6” (SeaMeWe-6) which will run from Singapore, through the Middle East and Europe to Marseille in France via fiber-optic cable. It is set to start operating early this year.
In terms of investment in the workforce, Al-Khailfa said that Bahrain’s strategy has focused in recent years on the graduation of job creators alongside job seekers. The government has also organized startup weekends and monthly “pitching” competitions through which entrepreneurs can access funding for their ventures.
Authorities in the country have made entrepreneurial development a core component of economic planning, he said, with strong support at the highest levels of the government.
Last week, Bahrain’s crown prince, Salman bin Hamad Al-Khalifa, met representatives of 100 businesses, 15 of which were established in the past five years and each of which employed a significant portion of the national workforce in 2025.
“It is important that when you are graduating college students, you are really ensuring that entrepreneurship is there early, and that they’re graduating with an idea of starting a business early. Whether that business fails or succeeds matters less,” Al-Khailfa said.
“We are building a culture of entrepreneurship at a time when people are sharing ideas on a global level. An idea that’s good in Japan is good in South America and is good in Bahrain.”
