Saudi Arabia a welcoming and rewarding destination for FDI
This week, business and economic leaders from around the world will come together to explore innovative strategies in global investment and share their combined wisdom and experience at the Future Investment Initiative conference hosted in Riyadh.
Initiatives like this, bringing together experts from many fields, demonstrate how Saudi Arabia is becoming more and more pivotal as a key player in the global economy beyond oil. As the only G-20 member from the Middle East and North Africa region and, with an economy that surpassed $685 billion last year, Saudi Arabia represents a tremendous opportunity for investors from around the world.
With the implementation of Vision 2030, Saudi Arabia has set out on a momentous path toward a future of economic development and business leadership. The country’s leadership aims to transform the Kingdom through infrastructure building, technology research and advancement, and the restructuring of the economy to emphasize the role of private investment and move beyond dependence on oil. As part of this vision, foreign direct investment (FDI) plays an essential role, so many of the reforms that form a part of the vision implementation process are aimed at making the Kingdom a welcoming and rewarding economy. This is why we are introducing our national investment promotion brand, “Invest Saudi,” to join efforts between all public and private sector stakeholders in promoting Saudi Arabia as one of the leading destinations for FDI.
The goals are ambitious, but the Kingdom has made significant progress at an accelerated pace. In just one year, Saudi Arabia has successfully implemented nearly 40 percent of recommended economic reforms. These reforms include opening up a wide range of economic sectors to foreign investment, allowing 100 percent foreign ownership of business ventures, adopting faster and less complicated business registration procedures, and increasing disclosure requirements and rights for minority investors in businesses. In recognition of these efforts, the World Bank has ranked the Kingdom second among all G-20 countries in implementation of economic reforms.
Initiatives like FII 2018, bringing together experts from many fields, demonstrate how Saudi Arabia is becoming more and more pivotal as a key player in the global economy beyond oil.
The policy changes we have made since our vision was announced has delivered concrete results, with FDI increasing by more than 90 percent in the first half of this year compared to the same period a year ago, and the issuance of new licenses nearly doubling by the end of the third quarter. Total FDI in Saudi Arabia has surpassed $200 billion and is on track to grow exponentially. New companies, such as Baker Hughes, have recently come to Saudi Arabia and other existing investors, such as Becton Dickinson Medical Technologies, are increasing their investments in the Kingdom, opening new business lines to benefit from the new regulations and reforms.
The Saudi Arabian General Investment Authority (SAGIA) serves as a partner and collaborator for investors seeking to capitalize on the opportunities that Saudi Arabia presents. SAGIA strives to identify business opportunities in the Kingdom that are ideal for foreign investors; and it works to ensure that the process of obtaining a license and launching a business goes smoothly. We at SAGIA are privileged to play our part in reaching the goals of Vision 2030, and we firmly believe that our success will also be a success for the global economy.
“Open for business” is not just a marketing slogan we use. We have opened major sectors to foreign investors on a 100 percent ownership basis, including education, trading, retail and even military industries, allowing investors unprecedented opportunities to stake claims in rapidly growing industries and to reap the benefits from sectors outside the oil and gas industry.
We also made significant policy changes to ease investment requirements in new sectors such as tourism, entertainment and media. We are one of the global hot spots for greenfield projects such as Neom and, even with the current global economic climate, we are moving forward with building our giga projects. This progress has also been recognized in the recent Global Competitiveness Report by the World Economic Forum, in which we have advanced our ranking for the first time since 2012.
Saudi Arabia has been, still is and will continuously evolve as one of the most attractive places in the world to do business. The moment is now, as the profound changes taking place in the Kingdom offer investors the rare chance to become involved in a market that is reinventing itself with an ambitious vision and unprecedented speed of transformation.
- Ibrahim Al-Omar is the governor of the Saudi Arabian General Investment Authority (SAGIA). He brings over 15 years of private sector experience to SAGIA. He has served on the boards of numerous public and private sector organizations, and as the chairman for three major international telecom projects for various consortiums. He is an alumnus of Harvard’s Program for Leadership Development, and holds a bachelor’s degree in electronic engineering from the King Fahd University of Petroleum & Minerals (KFUPM).