One of the Top 20 destinations for foreign direct investment in the world, Saudi Arabia can do all this - and much more. The Kingdom of Saudi Arabia is transforming itself into one of the world’s Top 10 most competitive economies, and therefore, one of the most lucrative markets for strategic investment. It’s all about delivering competitive advantages—and hence, higher returns on investment—to your business.
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.
The Kingdom is investing massively to enhance its value proposition to foreign businesses, both with infrastructure and with reform. His Majesty King Abdullah bin AbdulAziz Al Saud, Custodian of the Two Holy Mosques, has directed the Saudi government to become one of the world’s Top 10 most competitive economies by 2010—the 10x10 mission.In pursuit of this goal, the organs of government have initiated a multi-faceted reform strategy that has made the Kingdom one of the easiest places in the world to do business. Meanwhile, Saudi Arabia is investing tens of billions of dollars into the launch of four Economic Cities: public-private partnerships that will create tomorrow’s most attractive investment platforms for foreign companies. These unprecedented developments combine world-class infrastructure, cutting-edge design principles, and special incentives and streamlined processes to create foreign investment-led hubs in knowledge-based industries and other crucial sectors.
As the world’s fastest-reforming economy, Saudi Arabia has seen growing momentum and recognition for its economic transformation. In just three years, Saudi Arabia has risen from 67th to 23rd 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. Firms in Saudi Arabia thrive in this pro-business environment. Saudi firms occupied the top three spots in Forbes assessment of 1,616 joint-stock companies in the Arab world in late 2006. The Kingdom’s financial institutions are the largest in the region, and compete comfortably with the world’s best. Saudi Arabia’s economy provides unparalleled security to investors. The Saudi Riyal is one of the most stable currencies in the world. Sound macroeconomic management has allowed the Kingdom to maintain a fixed exchange rate without any restrictions on foreign exchange and outgoing money transfers. Inflation rates in Saudi Arabia are very low and the Kingdom is signing bilateral agreements with an increasing number of countries to encourage investor protection and reduce tax burdens. Ample capital availability, low taxes, and stable prices have earned Saudi Arabia the world’s top ranking for the quality of its macroeconomic environment.In addition to the Kingdom’s strong economic climate for investment, one of the country’s strongest advantages and incentives for foreign investment, however, is its people.
The majority of Saudi Arabia population is young, with 57% of the country under 25 years of age. Recognizing this as the country’s greatest potential asset, the Government is investing billions of dollars in education in order to train the next generation’s highly skilled workforce. As the world’s 8th highest spender on education, Saudi Arabia will provide investors with more opportunities to select the highest quality labour for their projects.Saudi Arabia is also a long-time host to one of the world’s largest and most impressive pool of foreign talent. Its increasingly attractive investment incentives are matched by an extremely welcoming employment environment, including a 0% individual income tax.
What does this all mean for your business?
Higher productivity and profitability, and above all: boundless potential in the world’s fastest reforming business climate.Since the Kingdom joined the World Trade Organization in 2005, many sectors of the economy have opened to foreign investment and opportunities abound. We look forward to welcoming you to the Kingdom!
THE SAUDI ARABIAN GENERAL INVESTMENT AUTHORITY (SAGIA)
Vision:
SAGIA’s vision is to act as a gateway to investment in Saudi Arabia. We seek to attract sufficient investment to achieve sustainable rapid economic growth while capitalizing on the Kingdom’s competitive strengths as the global capital of energy, and as a major hub between East and West.
Mission:
Our mission is to position Saudi Arabia among the top ten most competitive nations by 2010 through the creation of a pro-business environment and a knowledge-based society while putting forth its best effort to make Saudi Arabia a favorable investment destination in the region and throughout world.
Six core roles maximize SAGIA's impact on Saudi economics and investor interests:
1) Investor Services:SAGIA will provide comprehensive licensing and support services to investors while establishing their businesses. In addition, SAGIA will become the investor’s Information Clearinghouse, serving as a central repository of information regarding business in the country including key economic news and indicator reports, competitiveness studies, general statistics and economic research, and the country’s laws & regulations.
2) Marketing & Promotion:SAGIA will identify opportunities that are linked to the country’s competitive advantages and match them to investors that fit a complimentary strategic, risk, and financial profile. While working in conjunction with sponsoring organizations, SAGIA will cooperate to effectively market any industries, organizations, or individual opportunities in a targeted manner to maximize impact.
3) Regional Development:SAGIA will cooperate with regional authorities to create region-specific investment promotion plans and strategies that leverage each region’s key strengths for that region’s developmental benefit. Specific measures include designing promotional tool kits & training programs.Regional development is important to achieve balanced economic development nationally and prevent emigration of human and other resources from lesser-developed areas of the country to urban centres. For example, developing Haqil on the northern coast of Aqaba in the Northwest of Saudi Arabia will make it a launch pad for exports to Jordan, Syria, Lebanon, and North Africa. Concentrating on Yanbu, Jeddah, Rabigh and Jizan would connect the Yemeni and African markets to Saudi. On the east coast, Dammam and Jubail would serve the GCC, North Middle East, the Indian sub-continent, and Asia. Using the country’s geography to establish an extensive distribution network would optimize the connections between the region’s market of 250 million people and the global economy.
4) Start-Up Stimulation:SAGIA will support the Centennial Fund, a national foundation dedicated to funding Saudi entrepreneurs. SAGIA’s support will encompass facilitation and screening of applications along with provision of full transactional support to selected applicants. The fund will provide financial and mentoring support. SAGIA strongly believes in promoting the entrepreneurial spirit. Integrating newly minted entrepreneurs into the business community will result in future socio-economic benefits. The companies they build will generate job opportunities, foster economic creativity, and serve as a positive example to a new generation.
5) Sectoral Focus:While providing services to investors in all sectors of the Saudi economy, SAGIA plans to focus on three sectors: Energy, Transportation, and Information & Communications Technology (ICT). SAGIA will target these sectors because they have not realized their full economic potential, they embody an overwhelming competitive advantage, they enable other industries to develop, and they have a multiplier effect on economic expansion.
i. Energy: SAGIA’s work in Energy will take its broadest international classification and include downstream industries such as petrochemicals, water & electricity, and energy-intensive industries such as minerals.
ii. Transportation: SAGIA will leverage Saudi Arabia’s geographical position as a hub between East and West by working with relevant authorities to develop the country as an efficient launch pad for goods & services. iii. Information and Communications Technology: SAGIA will develop opportunities in this sector because studies have shown it to be an important factor in increasing Productivity
6) Creating a Pro-Business Environment: SAGIA will cooperate with other government agencies and private sector organizations to improve the country’s business laws and policies according to international best practices so that a healthy investment environment develops and continues. The ever increasing globalized economy necessitates that Saudi Arabia’s business climate be attractive and competitive.
As a start, in August 2004, SAGIA (1) updated its list of policies and procedures that require revision, (2) compared the country’s practices to its benchmarked countries, and (3) is now cooperating with relevant government authorities on procedural improvements. From the six roles we chose, a clear vision and mission crystallized:Our vision is to achieve rapid economic growth in Saudi Arabia, capitalizing on the Kingdom’s competitive strengths as the global capital of energy, and as a major hub between East and West.
THE ECONOMIC CITIES
Overview: At a cost of more than $60 billion, the Kingdom has planned and begun constructing four metropolitan marvels—a project that promises to significantly alter the economic landscape of Saudi Arabia while providing a wealth of Greenfield opportunities to investors. SAGIA has launched four integrated Economic Cities, located in Rabigh (King Abdullah Economic City), Hail (Prince AbdulAziz bin Mousaed Economic City), Madinah (Knowledge Economic City) and Jazan (Jazan Economic City).
The objectives of the Economic Cities are to:·
Promote balanced regional development·
Achieve economic diversification·
Create jobs·
Upgrade competitiveness
SAGIA’s vision for the Economic Cities is to contribute more than US$150 billion in annual GDP, to create over a million jobs, and to become home to 4-5 million residents by 2020. Serving the wide-ranging needs of these large communities will require immense private-sector involvement. Fully utilizing their commercial and industrial potential will offer even greater opportunities for investment. Built on specially selected “Greenfield” sites and strategically located around the Kingdom to utilize regional strengths, these cities will feature modern building design and will make use of the most advanced digital backbone and world-class services and infrastructure. The Economic Cities are being developed based on smart design principles, with the most advanced infrastructure and ubiquitous connectivity. These built-in advantages, combined with attractive investment incentives and a supportive regulatory environment, will create significant competitive advantages to businesses operating assets in the Cities. In addition to the industrial dimension of the Cities, quality of life is a central design consideration. Education, healthcare and entertainment will be of the highest international standard, so that the quality of living and working in the Economic Cities will be truly world-class.The Economic Cities are best viewed, not as “free zones” or “industrial parks,” but rather as modern day metropolises planned to perfection and designed to accommodate your life, in both work and play. SAGIA is working with leading environmental institutions to ensure that the Economic Cities are developed with the environment in mind. SAGIA aims to position the Economic Cities as global environmental leaders by using Leadership in Energy and Environmental Design (LEED) to minimize negative environmental impacts and promote energy efficiency and sustainable development.The Economic Cities will offer those who live and work there an excellent, low-pollution environment with high-quality housing, modern amenities, excellent sports and recreational facilities and world-class specialist healthcare.International schools will offer global curricula for workers’ children from all over the world, while luxurious malls will offer shops and restaurants featuring the finest goods and food from around the globe. The Economic Cities will therefore offer unparalleled standards of living in the Kingdom and are designed to provide a welcome comfort zone for modern businesspeople and their families.
Informed by meticulous study of the world’s 60 most successful free economic zones, the Economic Cities concept was designed to improve upon existing models. Driven by innovation public-private partnerships, the Economic Cities are comprehensive, fully integrated developments designed with “living, work and play” in mind. They are not zones, but cities. The result will be a set of beautiful, liveable metropolitan centres that leverage the Kingdom’s strengths and maximize competitive advantages for businesses located here.
King Abdullah Economic City (KAEC) King Abdullah Economic City (KAEC) is the single largest private sector project in the region developed by Emaar, The Economic City. It is expected to usher in a new era of economic prosperity for Saudi Arabia and has the potential to create one million jobs and be home to two million residents.
Jazan Economic City (JEC) Located 725 km south of Jeddah and covering 100 million sq m Jazan Economic City is expected to attract more than SR100bn in investment and create some 500,000 new jobs. The city includes a seaport, an industrial zone, a commercial business district, residential areas, public amenities such as hospitals and schools, as well as other academic and vocational training institutions.
Prince AbdulAziz bin Mousaed Economic City (PABMEC) Prince AbdulAziz Bin Mousaed Economic City is set to become the largest transportation and logistics hub in the Middle East. Built on 156,000,000 sq m, PABMEC’S core Master Development Plan will incorporate a cluster-based development comprising of transportation, logistics and supply chain centres.
Knowledge Economic City (KEC) Knowledge Economic City will be developed on a 4.8 million m sq. land while the built up area will near 9 million m sq. attracting SR25bn worth of investments. The project will add 20,000 new jobs to the region.
For more information visit www.sagia.gov.sa
