JEDDAH, 26 March 2007 — Saudi Arabia’s Supreme Economic Council yesterday issued a landmark decision allowing foreign investment in such vital sectors as insurance services, wholesale and retail trade, air and train transport, and communication services.
“The SEC has revised the list of economic sectors in which foreign investment will not be allowed, thus allowing foreigners to invest in new areas,” said Abdul Rahman Al-Tuwaijeri, secretary-general of the council, which is chaired by Custodian of the Two Holy Mosques King Abdullah.
Tuwaijeri said the SEC opened new economic sectors for foreign investment in line with King Abdullah’s reforms aimed at strengthening the economy, attracting more foreign investment and enhancing private sector participation.
The negative list of investment was also revised to comply with Saudi Arabia’s commitments under the regulations and conditions of the World Trade Organization. The Kingdom became the 149th member of the WTO in December 2005.
The new list excluded distribution services, wholesale and retail trade including medical retail services, private pharmacies internationally classified at 631+632+6111+6113+6121.
“Also commercial agencies, except franchise rights listed at 8929 by international industrial classifications are now open for foreign investment,” Tuwaijeri said.
Other sectors open to foreign investment are: distribution of cinema films and videocassettes that are internationally classified at 96113, transportation of passengers inside cities by train, air transportation services and satellite transmission services.
The Kingdom continues to ban foreign investment in sectors such as oil exploration, drilling and production. But the services related to the mining sector listed at 5115+883 in international industrial classification codes have been excluded.
Tuwaijeri said restrictions on real estate investment in Makkah and Madinah would continue without change. The same is the case for tourist orientation and guidance services related to Haj and Umrah.
Other sectors still out of bounds for foreign investors include recruitment and employment services including local recruitment offices, real estate brokerage; audiovisual and media services; land transport except transportation by train within cities; services rendered by midwives, nurses, physiotherapists and paramedics listed at 93191 by international classification codes; fisheries; and blood banks, poison centers and quarantines.
Saudi Arabian General Investment Authority recently announced its target to license investment projects worth more than SR300 billion this year.
It will also launch two more megacities in Tabuk and Eastern Province this year with an aim to ensure equal growth for all regions of the Kingdom. SAGIA licensed 1,389 joint and foreign projects in 2006 with a total value of SR253 billion.