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Doing business in Saudi Arabia

31 Jan 2016
1729 times

Saudi Arabia – a nation on the move

Saudi Arabia has long been recognized as a powerhouse of the Middle East. Now’s it’s poised to become one of the world’s top 10 most competitive nations and with that, one of the most lucrative markets for strategic investment.

 

strategic planning of its rulers has helped to create today’s stable, robust economy. Now, Saudi is looking to the future with an ambitious program of accelerated growth and development that will position it firmly as a new global force.

To capitalize on these geographic advantages, Saudi has set itself three strategic targets:

  • to become the global capital of energy. Up and downstream petrochemicals, minerals, power and water are all vital to the Saudi and global economy.
  • to act as a transport and logistical hub between east and west. KSA’s roads, railways and air links create a potential consumer base of more than 250 million, all within 3 hours’ reach.
  • to transform its knowledge-based industries, ie healthcare, life science, education and IT. These industries are all crucial drivers of long-term, sustainable change.

 

The Hard Facts

Being one of the world’s Top 10 most competitive economies makes Saudi Arabia the perfect investment opportunity. But that’s not the only reason why: 

  • Saudi Arabia is ranked 4th in the world for “fiscal freedom” and it’s the 7th most rewarding tax system in the world
  • 7th freest labor market in the world according to the World Economic Forum
  • One of the world’s 25 largest economies (23rd ) and the largest economy in the MENA region
  • One of the world’s fastest growing countries: per capita income is forecasted to rise from $20,700 in 2007 to $33,500 by 2020
  • It’s the world’s fastest reforming business climate
  • It’s the largest free market in the MENA
  • Represents 25% of total Arab GDP
  • It has 25% of worlds oil reserves
  • 13th out of 181 countries for the overall ease of doing business globally. 7th in terms of ease of paying taxes
  • 1st for ease of registering property and it’s the largest recipient of Foreign Direct Investment in the Arab world.

 

Economic Cities

Already ranked the easiest place to do business in the MENA region, Saudi Arabia is undertaking aggressive reforms and investments to become one of the world’s Top 10 most competitive economies by 2010: the 10×10 mission

As the world’s fastest-reforming economy, Saudi Arabia has seen growing momentum and recognition for its economic transformation. In just four years, Saudi Arabia has risen from 67th to 13th position in the World Bank’s Ease of Doing Business Index and is currently number one in the Middle East. The Kingdom ranks 3rd and 7th in the world, respectively, for ease of registering property and paying taxes. 

 Of course, it is no surprise that Saudi Arabia offers the world’s most competitive energy prices to investment projects. As such, Saudi Arabia continues to be a natural choice for investors in all energy-intensive industries.

 But competitive advantage in today’s Saudi Arabia run much deeper than just energy. It’s about creating a world-class business environment that combines an ease of conducting business with low costs. It’s about unfettered access to regional markets and financial services. Above all, it’s about our country’s vision, and our shared commitment, to seeing your business thrive. 

 When you’re ready to invest in Saudi Arabia, SAGIA is the government’s investor-friendly face. As well as a progressive regulatory environment, generous financial incentives and one of the world’s most stable currencies, the Kingdom offers an excellent standard of living – thanks to our huge experience in hosting expatriate workers and professionals from around the world.

Saudi Arabia offers a dynamic and robust economy, perfect for serving the world’s most demanding markets.

 

Dynamism and growth.

The performance of Saudi Arabia and MENA’s economies have exceeded world growth.

 Meanwhile, Saudi’s non-oil sector has delivered accelerating growth rates as the economy diversifies.

 

Real GDP Growth for some Arab countries 

 

Encouraged by robust GDP growth and macroeconomic stability, consumer confidence is well above the regional average. Growing private credit and increased public expenditures on infrastructure and other projects provide a broad basis for robust opportunities across the Middle East,  but in Saudi Arabia these are translating into particularly strong and sustained growth in domestic demand KSA itself has never been more committed to supporting economic growth. Robust growth in government revenues is supporting double-digit increases in government expenditures on social, infrastructure, and other investment projects. Perhaps even more crucial in the long term, an increasingly deregulated and competitive economic environment is supporting an explosion of business formation as the private sector takes an increasingly prominent role in the economy.

 

Saudi Government Budget Allocation 2014 (Total 855 Billion Riyals, About $228 billion).

 

 

The variety of domestic and export-oriented investment opportunities in Saudi has attracted steadily increasing foreign direct investment as the economy has been progressively opened. Saudi Arabia’s rapid improvements have made the country an increasingly attractive destination for investment. The World Investment Report 2013 measured Saudi Arabia’s FDI inflows to be the 33rd largest in the world and the 3rd largest in the MENA region.  

 

Economic stability

Sound macroeconomic management and an inflection point in world energy markets have made the KSA’s economy stable, despite the global financial crisis. While much of the world economy has recently been affected by a global liquidity squeeze, Saudi Arabia’s twin surpluses in the government budget and current account have made KSA an attractive, high-liquidity environment for local and foreign ventures.

 

Market size

As the region’s largest economy and the world’s 19th largest exporter, the sheer size of the markets that Saudi-based projects serve is “a competitive advantage, allowing Saudi businesses to benefit from economies of scale.” With excellent access to Saudi and other MENA markets, as well as the advanced and emerging economies of nearby Europe and Asia, market exposure for Saudi-based projects is not only vast but also highly diversified.

 

Cluster development

Investors in Saudi Arabia enjoy increasingly well-developed business clusters and value chains that set the nation apart from its neighbors and from other emerging economies. The World Economic Forum ranks the Kingdom 22nd in the world for Local Supplier Quantity and 31st for both Value Chain Breadth and Production Process Sophistication. Well established, competitive and efficient, Saudi Arabia’s domestic industries—from energy and chemicals to transportation—provide industrial projects with exceptional opportunities for cost savings

 

Source: www.sagia.gov.sa

 

Doing Business in Saudi Arabia : Facts and Figures (Saudi Arabian General Investment Authority - SAGIA)

 

Doing Business in Saudi Arabia : Invest Saudi (Saudi Arabian General Investment Authority - SAGIA)

 

Ease of Doing Business Rank 2015

Source: World Bank

 

Foreign Trade and Foreign Investment

Saudi Arabia: Total exports and imports ($ billion)  

Source: IMF

 

Saudi Arabia: Foreign Direct Investment (FDI) 

Source: UNCTAD

 

For More Information (Saudi Arab Economic Profile)

 

Last modified on Sunday, 31 January 2016 14:24
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  • Viola
    Viola Tuesday, 29 November 2016 04:05 Comment Link

    When someone writes an paragraph he/she maintains the plan of a user in his/her mind that how a user can be aware of it.
    Thus that's why this piece of writing is outstdanding.
    Thanks!

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