New Saudi moves to woo foreign investment

Saudi Arabia is currently working to develop its trade and investment laws with the intent of wooing more foreign direct investments and settling disputes between foreign investors and their local partners. Saudi Arabian General Investment Authority (SAGIA), the country’s investment facilitator, spearheads the move by adding some points of explanation in the current law in addition to putting a set of new conditions. The Kingdom encourages successful investment projects as they can create more jobs for Saudis, said one SAGIA official.
The plan goes well with the Labor Ministry’s efforts to find more jobs for young Saudi men and women. The Kingdom has been making strenuous efforts to diversify its economy by encouraging investment projects in various sectors. It is worth mentioning Saudi Arabia received $16.4 billion in 2011. Fahd Al-Mashari, an economist, said many foreign investors aim to invest their money in Saudi Arabia because of the country’s strong and stable economy that has safely steered through global financial crises. “The steady growth of the economy and the incentives being offered by the government to foreign investors have strengthened Saudi Arabia’s chance to become a major hub for investment,” he pointed out.
The Saudi economy has responded quickly to the speedy global economic changes. “We are one of the 20 largest economies in the world, holding 19th position. We are also the largest economy in the Middle East and North Africa (MENA) region and the largest recipient of foreign direct investment.” Saudi Arabia is one of the highest growing economies in the world with a GDP growth rate of 6.8 percent in 2012. Saudi Arabia ranks 22nd out of 185 countries for the overall ‘Ease of Doing Business.’ There are many reasons for investing in the strategic sectors where Saudi Arabia has great comparative advantages.
Saudi Arabia is at the heart of MENA region’s 400 million-strong populations. It is the largest free market in the Middle East, having 25 percent of the total Arab gross domestic product. “Saudi Arabia’s good location makes it and easy access for the European, Asian and African markets,” said a SAGIA official. Moreover, Saudi market has a high purchasing power and is expanding continuously. The Kingdom is one of the fastest-growing countries worldwide, with per capita income forecast to rise from $25,000 in 2012 to $33,500 by 2020. “Saudi Arabia has low inflation rates and pursues to conclude mutual agreements with a number of countries for promoting and protecting investment as well as preventing double taxation,” the official said.
Speaking about incentives, the official said investment applications are processed within 30 days; foreign investors will benefit from incentives and guarantees offered to local and national investors; and are allowed to transfer capital and profit abroad. “Foreign investors are also eligible to apply for loans from the Saudi Industrial Development Fund and can benefit from corporative, collateral and massive agreements regarding taxation and investment with other countries. They are also allowed to transfer losses for future years in regard to taxes,” he said. © Arab News