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Saudi Arabia identifies over $400bn worth of foreign investment Featured

29 Nov 2015
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Saudi Arabia identifies over $400bn worth of foreign investment

Saudi Arabia has identified over $400 billion worth of opportunities for foreign investors, as the Kingdom forges ahead with plans foreconomic transformation.

 

With the halving of oil prices since June last year, the Saudi government is seeking to create a new generation economy by better developing its non-oil sectors and attractingnew foreign investment.

Historically, the oil-rich Gulf Arab state has relied on exports of crude oil and refined petroleum products to support its economy. But as the oil price shows no signs to recover any time soon, with some indications pointing to it never reaching the $100 mark again, not at least in the short-term, Saudi Arabia is becoming ever more cognisant of the need to expand its means of income.

Areas of particular focus will be end-user industries such as automotive parts, electronics, consumer goods, paints and coatings, detergents, personal care products, additives, oil field and mining formulations and chemicals all of which are projected to see high level of growth over the coming years.

Also projected to grow rapidly are the renewable energy, housing, health, education, and transport & logistics sector, followed by telecommunications, internet and information security, and human capital.

Speaking at an industry event in Dubai, the chairman of the Saudi Arabia General Investment Authority (SAGIA), Abdulatif Al-Othman, noted that the Saudi government was looking to implement a new 30-year business model based on conversion and manufacturing industries instead of crude-oil exports as it has been in the past. The Kingdom will also be looking to leverage its huge capital spending to create new sectors, he added.

According to Al-Othman, Saudi Arabia spends about 1 billion Saudi Riyals on capital projects, 70 to 80% of which is used for importation of products and services. But the oil rich gulf Arab state is looking to reverse this trend by developing its industries further downstream and move towards a more diversified, service-based economy.

As one of the fastest growing, most competitive economies in the Middle East, home to over 31 million people with significant purchasing power, the Kingdom holds great potential for doing business in the region and beyond.

In an attempt to encourage more foreign investment, SAGIA has streamlined procedures for setting up new businesses, easing its foreign investment laws, and introducing a number of incentives.

“We have simplified and consolidated our licensing requirements most of our transactions are done online we have an investment care email that responds to the needs of investors and we have been averaging a service time of five working days or less,” said Al-Othman.

“We have started engaging with our strategic investors to see how we can help them grow their businesses in Saudi Arabia. We have changed our investment law to allow our strategic investors after their first year an extension of their license for 15 years before they have to renew it,” he added.

Under a new regulation, wholesalers and retailers are now entitled to 100% ownership of their business, when previously they could only own up to 75%.

As well as having some of the most predictable and competitive corporate tax across several industries, a newly introduced corporate law allows for full repatriation of capital, profit and dividends, meaning that investors can carry forward losses indefinitely, giving them agility to reinvest and expand their business.

Al-Othman commented: “Nowhere else in the region will you find the location, the growth, the market size and a nation committed to your success, all in one place. The combination makes the Kingdom an ideal destination for foreign investment. My message for you is: 'Don’t wait — it’s coming, we are serious about it. Be the first to take advantage’.”

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Last modified on Wednesday, 10 February 2016 00:19
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