JEDDAH, 10 September 2006 — Saudi Arabia has maintained its top ranking for doing business in the Middle East and North Africa (MENA) region. According to the World Bank’s International Finance Corporation’s (IFC’s) 2007 Ease of Doing Business Index, the Kingdom ranked 38th, keeping pace with its performance the previous year. This is despite substantially increased competition from both previously ranked countries and 20 new rivals.
Since joining the World Trade Organization (WTO), Saudi Arabia has taken a series of measures to improve the country’s investment climate, removing obstacles facing private investors, allowing foreign manpower recruitment and speeding up licensing procedures.
Following up on the recently published Arab Establishment of Investment Guarantee’s recognition of Saudi Arabia as the top importer of foreign direct investment (FDI) in the Arab world, the IFC ranking confirms the country’s standing as an attractive investment environment.
The report is an extensive comparison of 175 countries’ regulations that enhance or constrain a company’s ability to invest, increase productivity, and grow.
Singapore claimed first place after last year’s top-ranked New Zealand made business licensing more difficult. New Zealand slipped to second, followed by the United States, Canada and Hong Kong in fifth. Among other Asian nations, Japan ranked 11th, Thailand 18th, South Korea 23rd and Malaysia 25th. China ranked 93rd.
The Kingdom’s top performance among MENA countries (Kuwait ranks 46th, Oman 55th, UAE 77th, Jordan 78th, and Tunisia 80th) is driven by several key parameters:
• In “Registering Property”, Saudi Arabia ranks fourth overall. The report found that it takes only four days for a company to obtain a property title to expand operations.
• In “Paying Taxes,” Saudi Arabia ranks sixth, which makes the local tax regime one of the most competitive in the world. The total tax a company is required to pay on its gross profit is as low as 14.9 percent.
• Saudi Arabia also cut the number of days required to “Start a Business” to 39 from 64.
Reacting to the report, Saudi Arabian General Investment Authority (SAGIA) Governor Amr Al-Dabbagh said: “The strong performance demonstrates the positive impact created through government ministries working closely together. The Ministry of Commerce deserves special recognition for its work in decreasing the time to start a business.
“But to continue to improve in such a competitive field will require that we work ever more closely with other ministries. It is clear that Saudi Arabia will need to accelerate reforms in order to improve in the rankings in an environment that is quite dynamic.”
SAGIA aims to propel the Kingdom into the top 10 countries in the world in terms of competitiveness and attractiveness of investments by the year 2010. To get there, it is currently setting up a National Competitiveness Center (NCC), which is expected to further systematically address the issues related not only to regulatory processes, but also to the fundamental competitiveness of the economy. Through NCC, SAGIA will be monitoring 300 indicators measuring the Kingdom’s competitiveness.
The value of investment licenses issued during the second quarter of this year increased due to government efforts to improve the economic and investment climate in the Kingdom, stronger confidence in the Saudi economy, as well as the country joining the WTO.
