Cost of Doing

Business in
Bahrain
Financial Services

December 2013


Contents
1 Executive Summary 1
2 Licensing & Registration Costs 3
3 Renting Commercial Office Space 4
4 Occupancy costs 7
5 Manpower costs 8
6 Cost of Utilities 10
7 Communication Costs 11
8 Corporate Taxes 13
9 Renting Residences 14
10 Education Costs 15
11 Total Costs Summary 16
Appendix 17




1
1 Executive Summary
This report looks at the typical costs associated with operating a financial services firm in Bahrain,
Dubai, and Qatar. The report analyses the cost of licensing and registration, commercial rental rates,
manpower costs, communication and utility expenses, as well as corporate taxes across these
jurisdictions.
In addition to analyzing the costs of operating a financial services firm in these jurisdictions, the study
also presents an overview of the average cost of living, focusing on the cost of education and the cost
of renting residential properties. These cost heads have been categorized into three distinct
categories: cost of operations, cost of set-up, and living costs. Overall, the total cost of doing business
in Dubai and Qatar is almost twice that of Bahrain.
Rental rates of commercial properties in Bahrain remain considerably lower than Qatar and Dubai,
where office rents are almost three times the rates in Bahrain. Similarly, occupancy cost is lowest in
Bahrain when compared to Dubai and Qatar, where it is higher by 73% and 184% respectively.
Although communication and utility expense vary upon consumption, telecommunication companies
in Qatar charge the highest tariffs for local calls, while Dubai has the highest average cost for internet
services. With respect to the cost of utilities, both electricity and water tariffs for commercial
consumption are most affordable in Bahrain.
Residential rents in addition to the cost of schooling are the higher in Dubai and Qatar, making the
Bahrain the most affordable country to live in. On average, education in Bahrain is lower by an
estimated 90% and 100% than Dubai and Qatar. While the average rent for a 2 bedroom apartment in
Bahrain is lower than the rents for similar properties in Dubai and Qatar by 67% and 94%
respectively.
Bahrain also has the lowest manpower costs when compared with Dubai and Qatar, where UAE
nationals working in the finance sector earn approximately 30% more than expatriate employees,
while nationals in Qatar earn an average of 55% more than expatriates.
The following tables outline the overall costs of operating a business, in addition to the average living
costs across Bahrain, Qatar and Dubai:

Figure 1: Indicative Cost of Operations
1

Average Annual Cost of Operations (USD)
Cost Head Bahrain Qatar Dubai
Business Set Up
2
39,285 17,500 32,500
Commercial Rent 81,900 235,800 241,200
Manpower
3
120,600 164,380 148,520
Telephone Services
4
2,950 4,910 2,460
Internet Services
5
4,320 5,280 8,760
Utility (electricity & water) 260 280 650
Total Cost 249,315 428,150 434,090
Source: KPMG analysis



1
For an office size of 300sqm which is occupied by a total of 20 employees
2
Reflects the average annual cost of licensing (see Section 2 for more information)
3
Reflects the manpower costs of 6 local employees and 14 expatriate employees, and includes occupancy costs.
4
Charges for telephone services are rounded off to the nearest 10 and includes monthly rentals charges
5
Reflects the corporate rates for 8Mbps packages


2
Figure 2: Indicative Costs of Living
Average Annual Cost of Living (USD)
Cost Head Bahrain Qatar Dubai
Residential Units
6
20,100 39,360 43,080
Education 4,970 10,020 9,520
Total Cost 25,070 49,380 52,600
Source: KPMG analysis






6
The annual cost of residential units is calculated based on the average rental rate of 2 bedroom apartments and 3 bedroom
villas


3
2 Licensing & Registration Costs
Financial services institutions operating in banking and investment activities are regulated by the
Central Bank of Bahrain (CBB) in Bahrain, the Dubai Financial Services Authority (DFSA) in the Dubai
International Financial Centre (DIFC), and the Qatar Financial Centre Regulator Authority (QFCRA) in
Qatar Financial Centre (QFC). In particular, this study looks at financial institutions that are permitted
in dealing with investments (as principle)
7
and dealing with investments (as agent)
8
.
Licensing and registration costs are presented in the form of non-refundable application fees, in
addition to annual fees
9
depending on the type of license held, provided that the application is
successful.
Figure 3: Licensing and Registration Fees of Financial Services Institutions
Annual Fees & Application Fees (USD)
Regulator Category Application Fees Annual Fees
CBB
10

Dealing with Investments (as principle) 270 14,910 (min) 63,660 (max)
Dealing with Investments (as agent) 270 14,910 (min) 63,660 (max)
DFSA
Dealing with Investments (as principle) 40,000 40,000
Dealing with Investments (as agent) 25,000 25,000
QFC
Dealing with Investments (as principle) 25,000 25,000
Dealing with Investments (as agent) 10,000 10,000
Source: Central Bank of Bahrain Rulebook: A Guide to the CBBs Licensing Process, The DFSA Rulebook: Fees Module, Qatar Financial Centre Regulatory
Authority: A Guide to the Application Process




7
Dealing in investments as principle refers to the buying, selling, subscribing for or underwriting of financial instruments on own
account, including the underwriting of public offerings and private placement of third parties
8
Dealing in investments as agent refers to the buying, selling, subscribing for or underwriting of financial instruments on behalf
of a client
9
Annual fees payable to the CBB are variable, and are based on a percentage of the institutions adjusted operating cost base
(subject to a minimum and maximum amount). Furthermore, the DFSA charges an annual fee of 0.1% for each USD 1 million
in turnover
10
The application and annual fees charged by the CBB are rounded off to the nearest 10


4
3 Renting Commercial Office Space
Bahrain
Rental rates for commercial office space have fallen by an estimated 3% between 2012 and 2013.
This is largely due to the price-sensitivity of the current prime office market, which continues to
operate on adjusted rental rates or high vacancy rates.
The table below reflects the rentals for the Net Internal Area (NIA). Typically, an additional 15% of the
rent would be charged as maintenance charges for the common areas, such as staircases and
lobbies.
Figure 4: Prime commercial asking rental rates in Bahrain
Asking rental rates in Bahrain by office locations (USD per sqm per month)
Location 2011 2012 2013
Bahrain World Trade Center 24 24 24
Bahrain Financial Harbor 22 24 24
Seef Area
11
21 22 21
Diplomatic Area / Manama 24 24 22
Source: Primary Research, KPMG analysis
Both Bahrain World Trade Center and Bahrain Financial Harbor offer furnished and non-furnished
office space options. In addition to the base rent, the Bahrain World Trade Center charges ~USD 4
per sqm per month as service charge, while electricity and air-conditioning are charged as per
consumption. Furthermore, the Bahrain Financial Harbor applies a 15% service charge rate.
Figure 5: Typical prime commercial asking rents
Bahrain asking rents in 2013 (USD per month)
Location 50 sqm 100 sqm 200 sqm 300 sqm
Bahrain World Trade Center 1,200 2,400 4,800 7,200
Bahrain Financial Harbor 1,200 2,400 4,800 7,200
Seef Area
12
1,050 2,100 4,200 6,300
Diplomatic/Manama 1,100 2,200 4,400 6,600
Source: Primary Research, KPMG analysis




11
CBRE Bahrain Office & Residential MarketView Q2 2013
12
As above


5
Dubai
Rental rates for commercial properties in Dubai remain high when compared to Bahrain, and have
increased during 2013 as a result of a rising demand for commercial properties. However, rental rates
at the DIFC have remained steady between the years 2011 and 2013.
Figure 6: Prime commercial asking rental rates in Dubai
Asking rental rates in Dubai by major office locations (USD per sqm per month)
Location 2011 2012 2013
DIFC Gate Village 62 62 62
DIFC Gate Precinct 67 67 67
DIFC Gate Building 72 72 72
Source: Primary Research, KPMG analysis
While rental rates at the DIFC have remained constant, additional charges in the form of utilities,
service charges and community fees have increased by 15% from ~USD 14 per sqm per month in
2012 to ~USD 16 per sqm per month in 2013. Typical rents for occupying at the DIFC are as below:
Figure 7: Typical prime commercial asking rents
Dubai asking rents in 2013 (USD per month)
Location 50 sqm 100 sqm 200 sqm 300 sqm
DIFC Gate Village
3,100 6,200 12,400 18,600
DIFC Gate Precinct
3,350 6,700 13,400 20,100
DIFC Gate Building
3,600 7,200 14,400 21,600
Source: Primary Research, KPMG analysis




6
Qatar
Rental rates remained static across commercial properties in Qatar, with marginal increases in certain
areas only due to demand for prime offices. Qatar is still experiencing an oversupply in the
commercial office real estate market, and rents may face an adverse impact of 8-10% as new supply
arises.
13

Figure 8: Prime commercial asking rental rates in Qatar
Asking rental rates in Qatar by major office locations (USD per sqm per month)
Location 2011 2012 2013
Qatar Financial Center (QFC) 69 69 69
Diplomatic District / West Bay
14

(average)
54 54 55
Source: Primary Research, KPMG analysis
The rental rates in the QFC have remained stable, while average rates for commercial properties in
the Diplomatic District/West Bay area increased by a meager 2% from 2012.
Figure 9: Typical prime commercial asking rents
Dubai asking rents in 2013 (USD per month)
Location 50 sqm 100 sqm 200 sqm 300 sqm
Qatar Financial Center 3,800 7,600 15,200 22,800
Diplomatic District / West Bay
15

(average)
2,750 5,500 11,000 16,500
Source: Primary Research, KPMG analysis



13
Al-Asmakh Qatar Real Estate Report Q2 2013
14
As Above
15
As Above


7
4 Occupancy costs
Occupancy costs per employee workstation are arrived based on average workstation area per
employee and the prime rental rate for the location
16
.
As illustrated below, the occupancy cost per workstation in Bahrain continues to be significantly lower
than QFC in Qatar and the DIFC in Dubai. Dubai has the highest overall occupancy costs compared
to Bahrain and Qatar, largely due to the recent rise of the service charge rate applied across the three
office towers.
Figure 10: Average annual occupancy costs per workstation
17

Total occupancy costs (USD per workstation per annum)
Country 2011 2012 2013
Bahrain 4,780 4,780 4,780
QFC 13,662 13,662 13,662
DIFC Village Gate 13,680 13,680 14,040
DIFC Precinct Gate 14,580 14,580 14,940
DIFC Building Gate 15,480 15,480 15,840
Source: DTZ Occupier Perspective Global Occupancy Costs Offices 2013, KPMG analysis






16
DTZ Occupier Perspective Global Occupancy Costs Offices 2012 & 2011; average workstation area per employee adopted
as 15.0 sqm gross area (i.e. including staircase, lobbies and other common areas). Bahrains rate for utilities and service
charge of commercial properties is 15% of the rent per sqm, while the DIFCs utilities and maintenance charge is USD 16 per
sqm, and the QFCs rate for utilities and service charge is 10% of the rent per sqm.
17
Please refer to the Appendix for a detailed explanation of the calculations and methodology adopted


8
5 Manpower costs
When comparing the average salary earned by an expatriate working in the financial sector, Bahrain
continues to have the lowest manpower cost in comparison to Dubai and Qatar. The gross salary
earned by both local and expatriate employees in Bahrain remains generally the same, while
significant disparity exists between the average gross salary earned between locals and expatriates in
Dubai and Qatar. The salaries quoted below include the basic and House Rent Allowance (HRA)
components, but do not include the other expatriate benefits.
Figure 11: Average finance sector salaries (expatriate)
Average Annual Finance Sector Salary
18
(2013)
Country Local Currency USD
Bahrain BHD 21,330 56,570
Dubai AED 218,510 59,490
Qatar QAR 232,800 63,940
Source: KPMG analysis
Figure 12: Indicative local vs. expatriate salaries
Indicative Annual Expatriate Salary Vs. Local Salary in Finance Sector
19
(USD, 2013)
Country Expatriate Salary Citizen Salary
Bahrain 56,570 56,570
Dubai 59,490 77,340
Qatar 63,940 99,110
Source: KPMG analysis
The tables below outline the overall annual costs of hiring in Bahrain, Dubai and Qatar. Each table
provides past and future trends of the wages, occupancy costs
20
, housing rent allowance, and
additional benefits of expatriate employees working in the financial sector.
Figure 13: Overall costs of hiring in Bahrain (expatriate)
Average Annual Cost in the Financial Sector for Bahrain (USD)
Overall costs 2011 2012 2013 2014 (E) 2015 (E) 2016 (E)
Salary 33,410 35,240 37,070 39,110 41,260 43,530
Occupancy Cost 4,780 4,780 4,780 4,880 4,970 5,070
HRA component 19,030 19,220 19,500 19,890 20,290 20,690
Expatriate Benefits 10,620 10,730 10,890 11,110 11,330 11,560
Total Cost 67,840 69,970 72,240 74,990 77,850 80,850
Source: KPMG analysis



18
Including only basic and HRA components, other expatriate benefits and occupancy cost are not included
19
As above
20
Occupancy costs presented in the overall cost of hiring reflect the average cost of occupancy across each location and are
not specific to individual properties. (Source: DTZ Occupier Perspective: Global Occupancy Costs Offices 2013)


9

Figure 14: Overall costs of hiring in Dubai (expatriate)
Average Annual Cost in the Financial Sector for Dubai (USD)
Overall costs 2011 2012 2013 2014 (E) 2015 (E) 2016 (E)
Salary 32,760 34,570 36,260 38,250 40,360 42,580
Occupancy Cost 9,230 8,570 8,270 8,430 8,590 8,760
HRA component 22,660 22,890 23,230 23,670 24,170 24,650
Expatriate Benefits 13,660 13,800 14,010 14,290 14,580 14,870
Total Cost 78,310 79,830 81,770 84,640 87,700 90,860
Source: KPMG analysis
Figure 15: Overall costs of expatriate hiring in Qatar (expatriate)
Average Annual Cost in the Financial Sector for Qatar (USD)
Overall costs 2011 2012 2013 2014 (E) 2015 (E) 2016 (E)
Salary 36,400 38,410 40,520 42,750 45,100 47,580
Occupancy Cost 12,510 12,510 13,590 14,130 14,840 15,580
HRA component 22,850 23,080 23,420 23,890 24,370 24,850
Expatriate Benefits 15,180 15,330 15,560 15,870 16,190 16,510
Total Cost 86,940 89,330 93,090 96,640 100,500 104,520
Source: KPMG analysis
The following graph illustrates the trends in employment costs between 2011 and 2016. Based on
projected inflation and salary growth, the overall cost of doing business in Bahrain is expected to
remain substantially lower than that of Dubai and Qatar.



67,840
69,970
72,240
74,990
77,850
80,850
78,310
79,830
81,770
84,640
87,700
90,860
86,940
89,330
93,090
96,640
100,500
104,520
0
20,000
40,000
60,000
80,000
100,000
120,000
2011 2012 2013 2014 (E) 2015 (E) 2016 (E)
Bahrain Dubai Qatar


10
6 Cost of Utilities
Electricity and water tariffs for commercial consumption differ in accordance to the total number of
units utilized. When compared, Dubai charges the highest commercial tariffs for the utilization of both
electricity and water.
Figure 16: Electricity & Water Tariffs
Electricity & Water Tariffs for Commercial Consumption (USD)
Country Electricity Tariff per kWh Water Tariff per M
3

Bahrain 0.04 0.80
Dubai 0.10 2.10
Qatar 0.04 1.43
Source: www.mew.gov.bh, www.dewa.gov, www.qewc.gov
The charges quoted compare the commercial tariffs applied for utilizing more than 30,000 kilowatt-
hour (kWh) units of power, and less than 450 cubic meters (M
3
) of water. The table below outlines
indicative charges for electricity and water consumption for typical prime commercial office sizes
across Bahrain, Dubai, and Qatar.
Figure 17: Indicative Utility Charges
Electricity and Water Charges Scenarios (USD per month)
Location 50 sqm 100 sqm 200 sqm 300 sqm
Bahrain
Electricity 40 70 140 220
Water 10 20 30 40
Total 50 90 170 260
Dubai
Electricity 90 180 350 530
Water 20 40 80 120
Total 110 220 430 650
Qatar
Electricity 30 70 130 200
Water 10 30 50 80
Total 40 100 180 280
Source: KPMG analysis



11
7 Communication Costs
Telephone Services
The cost of telephone services has been calculated based on the corporate rates offered from leading
telecommunication providers in Bahrain, Dubai and Qatar. The table below compares the average call
rates applied for business telephone lines for both international calls and local calls:
Figure 18: Indicative Local vs. International Call Rates
Average Local vs. International Call Rates per Min (USD)
Country Local Call Rate International Call Rate
21

Bahrain 0.02 0.64
Dubai 0.01 0.61
Qatar 0.05 0.54
Source: www.batelco.com, www.menatelecom.com, www.du.ae, www.etisalat.ae, www.ooredoo.qa, KPMG analysis
Telephone charges are presented in the form of fixed rental fees and an estimate of call charges
(based on average employee utilization)
22
. The costs quoted below compare the average charges for
business telephone packages
23
.
Figure 19: Indicative Telephone Charges
Average Telephone Charges per Month (USD)
Country Rental Charges Call Charges
Bahrain 6 12
Dubai 25 9
Qatar 9 20
Source: www.batelco.com, www.menatelecom.com, www.du.ae, www.etisalat.ae, www.ooredoo.qa, KPMG analysis





21
International call rates are shown as the average of Peak Rates and Off-Peak Rates
22
Call charges are presented per employee with an estimated utilization of 300 minutes (local calls) and 10 minutes
(international calls) per month
23
Please note that the features and added benefits vary between the packages offered by each telecommunication company
across Bahrain, Dubai and Qatar, excluding connection fees (one-off)


12
Internet Services
Similar to calculating the cost of telephone services, the cost of internet services are based on
corporate rates offered by telecommunication companies across Bahrain, Dubai and Qatar. The costs
quoted below are for an 8Mbps Business package
24
, suitable for moderate internet utilization of a
commercial office of 25-50 employees, and exclude set-up fees and installation charges (one-off).
As outlined in the table below, Dubai has the highest cost for internet services when compared to
Bahrain and Qatar.
Figure 20: Average Cost for Internet Services
25

Rental Charges for Internet Services (USD per month)
Country Rental Charges
Bahrain
26
360
Dubai 730
Qatar 440
Source: www.batelco.com, www.menatelecom.com, www.du.ae, www.etisalat.ae, www.ooredoo.qa, KPMG analysis




24
Please note that the features and added benefits vary between the packages offered by each telecommunication company
across Bahrain, Dubai and Qatar
25
The average cost for internet services has been rounded off to the nearest 10
26
Reflects the monthly rental for a 1-year contract


13
8 Corporate Taxes
In Bahrain, there is no corporate tax for most companies, while speculation on the introduction of VAT
on transactions in the future is yet to be confirmed. Qatar, Dubai and Bahrain apply different quantum
of taxes on corporations operating in these locations, ranging from social security contributions,
training levies, and municipality taxes.
The following tables outline the corporate taxes applied in Bahrain, Qatar and Dubai.
Figure 21: Corporate Taxes in Bahrain
Overview of Corporate Tax
Category Description
Municipality Tax 10% on the rental of the commercial property
Social Security Contribution 12% of salaries for local employees, and 3% for expatriate employees
Training Levy
27
1% of the salaries for local employees, and 3% for expatriate employees
Source: Bahrain Ministry of Finance
Figure 22: Corporate Taxes in Dubai
Overview of Corporate Tax
Category Description
Municipality Tax 10% on the rental of the commercial property
Social Security Contribution 12.5% of salaries for local employees only
Corporate Tax Income is taxed at 20% only on branches of foreign banks
Source: United Arab Emirates Ministry of Finance
Figure 23: Corporate Taxes in Qatar
Overview of Corporate Tax
Category Description
Social Security Contribution 10% of salaries for local employees only
Corporate Tax
Income is taxed at 10% for QFC entities that are wholly owned by Qatari or
GCC nationals
Withholding Tax
7% on interest paid to non-residents
5% on royalties paid to non-residents
7% on technical service fees paid to non-residents
7% tax is applied on commissions, brokerage fees, directors fees, and fees
from other services performed in Qatar
Source: Qatar Ministry of Finance Public Revenues and Taxes Department, Qatar Financial Centre




27
Only applicable for companies with more than 50 employees that do not provide training to their employees


14
9 Renting Residences
Bahrain
A comparison of residential rents between Dubai, Qatar and Bahrain reveals substantially lower rents
for Bahrain. Residential rents in Bahrain continue to decrease compared to 2012, with the average
rent for 2 bedroom apartments and 3 bedroom villas decreasing by 5% and 10% respectively.
Although there is sufficient demand for residential units in Bahrain, it did not help drive up rents due to
the surge in residential supply as several major developments were brought to the market.
Figure 24: Average monthly rents in Bahrain
Average Monthly Rents in Bahrain (USD)
Residential unit sizes 2011 2012 2013
Average Rent for 2 BD Apartment 1,650 1,500 1,430
Average Rent for 3 BD Villa 2,250 2,130 1,920
Source: CBRE Middle East, KPMG analysis

Dubai
Dubais real estate market continued to grow throughout the year, and is not expected to slow down
as improving market conditions fuel residential demand. In Dubai, the year-on-year growth for
apartment and villa rents amounted to 20% and 14% respectively. To meet the rising demand, Dubai
is expected to see another 31,400 residential units and 6,500 villas to be added by 2014.
Figure 25: Average monthly rents in Dubai
Average Monthly Rents in Dubai (USD)
Residential unit sizes 2011 2012 2013
Average Rent for 2 BD Apartment 1,830 1,990 2,390
Average Rent for 3 BD Villa 3,487 4,200 4,790
Source: Asteco Dubai Report H1 2013, KPMG analysis

Qatar
The residential market in Qatar has witnessed higher occupancy levels, particularly in residential
apartments, which has placed an upward pressure on rental levels. Qatar is still experiencing a
demand-supply gap where units in prime areas are being pre-booked prior to the existing tenants
vacating. On average, rental rates grew by 7% between 2012 and 2013 throughout the residential
market, compared to a 2% increase between 2011 and 2012.
Figure 26: Average monthly rents in Qatar
Average Monthly Rents in Qatar (USD)
Residential unit sizes 2011 2012 2013
Average Rent for 2 BD Apartment 2,470 2,510 2,780
Average Rent for 3 BD Villa 3,570 3,640 3,780
Source: Asteco Qatar Report Q2 2013, KPMG analysis



15
10 Education Costs
An indicative analysis of the total cost of education across Bahrain, Dubai and Qatar is presented in
local currencies and USD in the table below. Overall, the annual cost of education in Bahrain is
substantially lower than in Dubai and Qatar, where education costs are higher by 92% and 102%
respectively.
28

Figure 27: Indicative Education Costs
Average Education Costs per Annum (2013)
Country Local Currency USD
Bahrain BHD 1,870 4,970
Dubai AED 34,970 9,520
Qatar QAR 36,480 10,020
Source: www.expatwoman.com, KPMG analysis
The cost of education in Bahrain is significantly lower than Dubai and Qatar across all three grade
levels. The cost of education for Pre-School levels, Primary levels, and Secondary levels in Bahrain,
Dubai and Qatar are compared in the table below:
Figure 28: Average Cost of Education
Annual Costs per Grade Level
29
(USD)
Country Pre-School Level Primary Level Secondary Level
Bahrain 4,030 4,740 6,130
Dubai 7,290 9,400 11,870
Qatar 7,430 10,450 12,180
Source: www.expatwoman.com, KPMG analysis







28
Average education costs have been rounded off to the nearest 10
29
The average education costs takes into account the fees of American, British, and Indian Curriculums for all three grade
levels.


16
11 Total Costs Summary
An indicative analysis of the total estimated employee related costs
30
in Bahrain, Dubai and Qatar is
presented in the following table:
Figure 29: Overall costs of hiring
Estimated average employment costs in USD per month per employee
Location
Occupancy
cost
31

Average
Wages
HRA Benefits
Expatriate
Benefits
32

Total
Bahrain
Local 400 5,630 - - 6,030
Expatriate 400 3,090 1,630 910 6,030
QFC
Local 1,100 8,260 - - 9,360
Expatriate 1,100 3,380 1,950 1,300 7,730
DIFC
Local 1,200 6,450 - - 7,650
Expatriate 1,200 3,020 1,940 1,170 7,330
Source: KPMG analysis
Although HRA benefits are lower in Bahrain in comparison to Qatar and Dubai, expatriate employees
continue to relocate to Bahrain due to its low living costs.
To better compare the costs of doing business in Bahrain, QFC and the DIFC, a scenario highlighting
the costs associated in operating an office with three local employees and seven expatriate
employees is presented in Figure 29. Overall, the cost of doing business in Bahrain remains lower
than DIFC and QFC.
Figure 30: Office mix scenario
Office mix scenario costs (USD per month)
Location
Occupancy
cost
Average
Wages
HRA Benefits
Expatriate
Benefits
Total
Bahrain
3 Locals 1,200 16,890 - -
7 Expatriates 2,800 21,630 11,410 6,370
Total 4,000 38,520 11,410 6,370 60,300
QFC
3 Locals 3,300 24,780 - -
7 Expatriates 7,700 23,660 13,650 9,100
Total 11,000 48,440 13,650 9,100 82,190
DIFC
3 Locals 3,600 19,350 - -
7 Expatriates 8,400 21,140 13,580 8,190
Total 12,000 40,490 13,580 8,190 74,260
Source: KPMG analysis




30
House Rent Allowance (HRA) for expatriate workforce is shown as a separate entry. However, for local workforce, absence
of a separate HRA would be compensated by other benefits, and is shown as a part of wages in the above table
31
Average occupancy costs per month, rounded off to nearest 100s
32
To include education, medical and annual flight fare for an expatriate family of four.


17
Appendix
1. Calculations for Cost per workstation
Methodology of calculation cost per workstation: -
15 sqm space utilization standard per worker in the Middle East.
Rental rate of the building (in sqm per month).
Utilities and maintenance charges per sqm (10% of rent for QFC, and USD 16 for DIFC)
Calculation for annual cost per workstation= 15.0 sqm x (Rent + Service Charge) x 12

For example:

Annual Occupancy Cost per Workstation for QFC in 2013 =

15.0 sqm x [USD 69.0 per sqm x (1+10%)] x 12
=13,662
2. Workforce benefits
The workforce compensations and benefits listed in the present study are only indicative in nature.
In practice, companies often adopt varied compensation and benefit structures both for citizen and
expatriate workforce.
Expatriate benefits calculated in the subject report assume educations benefit for two children, and
additional for medical insurance and once a year home travel for a family of four. This does not
include any end-of-service benefits.
Citizen benefits vary from country to country and can include marriage benefits, benefits upon birth
of children etc. These considerations have not been included in this study.





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