South Korea and Bahrain today signed an Agreement for the Avoidance of Double Taxation (DTA) to promote economic co-operation and joint investment between the two countries. The agreement details the taxing rights of each country and provides for the elimination of double taxation on income which may occur as a result of cross-border economic activities between the two countries.
The agreement was one of a number signed during a three-day state visit by a senior Bahrain delegation led by His Royal Highness Prince Salman Bin Hamad Al-Khalifa, the Crown Prince of Bahrain and Chairman of the Economic Development Board (EDB), including representatives from the EDB, Bahrain Chamber of Commerce & Industry (BCCI), eGovernment Authority (eGA) and the private sector. The delegation was visiting the South Korean capital as part of a roadshow to strengthen bilateral relationships between the business communities and to highlight opportunities for investment in the Kingdom.
In addition to the DTA, a number of commercial, economic and cultural cooperation agreements were made between the two counties, including:
- A Memorandum of Understanding (MoU) between the Bahrain Chamber of Commerce & Industry and the Korean Chamber of Commerce & Industry to promote mutually advantageous commercial and industrial interests. The scope of cooperation, which comes into force with immediate effect, includes the regular exchange of market information, business opportunities and economic delegations for promoting trade, investment and commercial exchange.
- The launch of The Bahrain Korean Friendship Society, established with the aims of strengthening friendly relations and understanding between the people of Bahrain and Korea, and encouraging cooperative relationships in economic, cultural, sports, tourism and scientific fields.
- A partnership between Korean firm, LG CNS and the eGovernment Authority of Bahrain, to implement Bahrain’s Business Licensing Integrated System (BLIS), a turn-key integrated solution for electronic application and renewal of Commercial Registrations and related licences – to further simplify the process to establish a business in the Kingdom. This follows a lengthy tender process which saw LG CNS emerge as the winner due to their significant experience in the implementation of projects similar to BLIS. BLIS has been designed to optimise the investment climate in Bahrain by using technology to make Bahrain more competitive in attracting foreign investments.
Commenting on the MoU signed with the KCCI, Dr Esam Fakhro, Chairman of the BCCI said: “We are very pleased to have entered into this strategic agreement with the Korean Chamber of Commerce & Industry. I have no doubt that the sharing of information, contacts and information will serve to bolster and strengthen a trading relationship that has tripled since 2007 to over USD 800 million – benefiting both individual members of our respective organisations and our wider economies. At a time when the East’s contribution to the global economy is on the increase, we are delighted to have such a strong partner in Korea.”
Mr Sohn, Kyung-shik, Chairman of the Board, KCCI, said: “This partnership marks an exciting development for the Republic of Korea, not least as the GCC is its second largest trading partner after China. The economies of the GCC are continuing to diversify, with Bahrain at the forefront, offering exciting new opportunities for foreign investors and new products for export to foreign markets. Today’s agreements will lay the foundations for successful collaborations in sectors such as financial services, manufacturing, ICT, food processing, logistics, transportation, and many others.”
Kamal bin Ahmed, Minister of Transportation and Acting Chief Executive of the EDB said: “The countries of the GCCl alone represent a market of around one trillion US dollars that is set to double within a decade. With its strategic location as the gateway to the Gulf, Bahrain is an ideal location from which businesses from South Korea can access this market and its opportunities.”
Bahrain and South Korea have a close diplomatic relationship and strong economic and trade connections. According to the Korean International Trade Association, total trade between Korea and GCC is estimated to have reached USD 113.8 billion in 2011, with the GCC emerging as Korea’s second largest trading partner after China. South Korea is currently the fifth largest trading partner of the GCC accounting for eight per cent of the entire region’s trade. South Korean companies with operations in Bahrain include: Hyundai Engineering and Construction, Hyundai Heavy Industries, Samsung Engineering, Woori Bank, Dm Puretech Co, Woongjin Development, Myong Sung Engineering and Korea Exchange Bank.