DAVOS: Bahrain remains the only country in the world to have implemented a data-sovereignty framework through a “Data Embassy” law, as it positions itself for growth in an AI-driven global economy, Sheikh Salman bin Khalifa Al-Khalifa, the minister of finance and national economy, said at the World Economic Forum in Davos on Thursday.
The government has built regulations and digital infrastructure while investing heavily in people and higher education to create an environment that attracts entrepreneurs and foreign capital, he said.
In 2018, Bahrain became the first nation to enact a Data Embassy law, allowing foreign institutions to host their data in Bahraini data centers while keeping it under the jurisdiction of their home countries.
Under this framework, for example, a German company’s data stored in Bahrain remains subject to German law and can only be accessed through a German court order.
“Bahrain has led the world in regulation,” Al-Khalifa said. “We are, and continue to be, the only country in the world with a data sovereignty law. This is groundbreaking stuff. You need laws and regulations that are ahead, and a regulatory environment where it’s easy to do business.”
That same year, Bahrain introduced a Bankruptcy Law that decriminalized business failure. Previously, entrepreneurs could face personal liability and even jail time if a company collapsed.
“We had to work a lot with the Ministry of Industry and Commerce to decriminalize failure,” he said. “The Bankruptcy Law was a very important step in fostering a culture of entrepreneurship.”
Al-Khalifa was speaking during a panel on how governments can support entrepreneurship, improve soft skills, and reduce bureaucracy.
He said Bahrain has also invested in infrastructure to support AI-driven industries and connect the kingdom to the “global data highway” through the SeaMeWe-6 submarine cable, linking Singapore to Marseille via the Middle East. The system is expected to begin operations early this year.
On workforce development, he noted that Bahrain’s strategy now emphasizes producing job creators alongside job seekers. The government organizes startup weekends and monthly pitching competitions to connect entrepreneurs with funding.
Entrepreneurship has become a core pillar of national economic planning, with strong backing from the highest levels of government. Last week, Crown Prince Salman bin Hamad Al-Khalifa met representatives of 100 businesses, 15 of which were founded within the past five years and now employ a significant share of the national workforce.
“It is important that when you are graduating college students, you are really ensuring that entrepreneurship is there early,” Al-Khalifa said. “Whether that business fails or succeeds matters less.”
“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.”
