RIYADH: Commerce and Investment Minister Majid Al-Qassabi welcomed the cabinet decision allowing 100 percent foreign ownership in the trading sector saying it is a good move toward making the Kingdom an investment powerhouse.

Commenting on the decision made by the Council of Ministers, Al-Qassabi said: "The second pillar of the Vision 2030 is to make our nation an investment powerhouse and this announcement allowing 100 percent foreign ownership in the trading sector will take us a step further toward achieving this."

Moreover, officials in Riyadh hope this step will generate new interest from multinational retailers and wholesalers to secure or expand a foothold in a market that is experiencing rapid growth.

Young and expanding Saudi population, which is growing at 2 percent annually, is fueling the sector.

Interestingly, these consumers also have a high degree of purchasing power compared to their regional peers. Between 2012 and 2017, compound annual growth for the retail sector is expected to be 6 percent, making the Kingdom a standout country for disposal of income in the region and developing countries globally.

Commenting on the retail and whole sector, Al-Qassabi said: “The retail and wholesale sector in the Kingdom has many solid fundamentals, creating a strong business case for investment. We have a young, growing and intelligent consumer base, we have a growing retail sector, fueled by high consumer spending and we have a strategic location that will allow investors to reach some of the world’s fastest growing and exciting markets.”

He added: “With these qualities, we realized we have a chance to enable investors to enhance their success through 100 percent ownership. I would invite companies to explore this option, and the rest of what the Kingdom has to offer.”

Notably, the Saudi Arabian General Investment Authority (SAGIA) is now accepting applications from companies for 100 percent ownership in the trading sector as the government has approved the issuance of licenses allowing foreign companies 100 percent ownership in this sector.

Significantly, the Cabinet decision comes shortly after the announcement of the National Transformation Program (NTP-2020) and Vision 2030, Kingdom's road-map to diversify its economy and address the challenges brought by low global energy prices.

Under the policy, investors will now have the flexibility to structure their company optimally to benefit from opportunities in the Saudi market. They may seek 100 percent ownership or operate through a joint venture.