JEDDAH, 15 August 2005 — Saudi Arabian General Investment Authority (SAGIA) is studying new proposals to attract foreign investment including exemption of investment projects from income tax for 15 years and from Saudization rules for five years, press reports said.
SAGIA Governor Amr Abdullah Al-Dabbagh said his organization was studying the proposals with a number of government departments, adding that they would be applied after approval on industrial, mineral, agricultural, fisheries, desalination, railway, road and sewage projects.
“We are also weighing prospects of including foreign companies operating in less industrialized regions among the beneficiaries of soft loans being provided by the Industrial Development Fund,” Al-Madinah Arabic daily quoted the SAGIA chief as saying.
The new proposals, which would be welcomed by foreign investors, comes at a time when the Kingdom is seeking funds for projects worth more than SR2.34 trillion ($624 billion) in vital sectors including petrochemicals, gas, railways, desalination and electricity.
During his recent meeting with French businessmen and executives, Al-Dabbagh himself offered investment opportunities exceeding $500 billion in areas like energy, transportation and knowledge-based industry sectors across the Kingdom.
SAGIA reported 4,596 percent increase in investments in licensed projects in the second quarter of this year compared to the same period last year. The total amount invested during the first half of 2005 reached SR65 billion, the organization said in a report.
Since SAGIA began operating in 2000, 50 percent of the licensed investments have been implemented, said Al-Dabbagh. He assured that SAGIA had founded the mechanisms to follow up on implementing the projects and for removing any obstacles they might face.
SAGIA, in cooperation with the World Bank, is currently conducting a complete evaluation of the investment environment in the Kingdom. The goal is to provide an appropriate scientific mechanism to measure and compare the progress made in investment climate.
The evaluation will include detailed reports describing the investment environment in some countries. The reports would be based on the results of field surveys conducted regularly for the purpose. Al-Dabbagh signed an agreement with Dr. Osama Tayeb, president of King Abdul Aziz University in Jeddah, for the university’s Research and Consulting Center to conduct the survey on a sample of 1,000 companies and institutions in the Kingdom.
In recent months, Saudi Arabia has taken a series of steps to strengthen its competitive edge compared with neighboring Arab and Gulf countries to woo foreign investors.
Last month, higher authorities approved the implementation of 17 agreements between SAGIA and relevant government departments to make Saudi Arabia more investment-friendly and remove obstacles facing investors.
Al-Dabbagh said the agreements would encourage the private sector to set up specialized universities and colleges in conjunction with renowned world universities and foster industrial projects by giving exemptions on customs tariffs, and granting facilities such as entry visas to foreign investors.
They also feature streamlining judicial procedures to resolve trade disputes, strengthening guarantees for investors, promoting women’s input in investment and speeding up the process of collecting imports from entry ports, the SAGIA chief said.