Saudi Arabia Ensures Business Continuity Amid COVID-19 Pandemic
Despite the COVID-19 pandemic slowing the pace a bit, foreign investment in Saudi Arabia saw significant growth in the first quarter of 2020 with almost 20 percent increase in the number of new international startups. This is the fastest growth rate in the Kingdom in the past 10 years. This is significant as it signals an increasing pace of investment.
During the first quarter of 2020 itself, 348 international companies were granted investor licenses. Indian and US companies, especially in emerging sectors such as education, tourism, finance, and the pilgrimage segments, displayed the highest propensity of setting up their businesses in the Kingdom. 41 Indian and 37 US companies were launched, followed by those from Lebanon, UK and Egypt.
About three quarters of the new foreign investment was in the form of full foreign ownership licenses, whereas about 27 percent was in the form of joint ventures with local investors. The emerging sector sealed 125 projects and was followed by investments in industrial manufacturing, information technology, transport and logistics, retailing and e-commerce.
A special report by Invest Saudi revealed these inspiring statistics. Invest Saudi is a communication platform that serves all government entities with regards to promoting the Kingdom as an investment destination with an aim to contribute to realizing the Vision 2030.
Saudi Arabia very well recognizes that investors are important to realize the transformational goals which the Kingdom has embarked on under the Saudi Vision 2030. A proactive Ministry of Investment has initiated a slew of measures to ensure business continuity.
In a survey by the ministry of 1823 investors, payment of salaries, covering other expenses and generating income were cited as major challenges during the COVID-19 pandemic. But a vast majority of them expressed their ability to continue business activities. They also acknowledged the proactive response from banks and the government to their requests to restructure or grant loans. Many of them are loan free.
The ministry has been working relentlessly to safeguard the stability and security of the Kingdom’s entire investment ecosystem. The COVID-19 Response Center has had a direct impact. The ministry is continuously interacting with investors to take stock of their current situation and to ascertain the type of support they need during this difficult time. On the other hand, it is coordinating with the government to ensure that relevant regulations and guidelines are in place to ensure that the companies continue to operate.
With an aim to help the Kingdom’s local and international businesses, the Saudi government has implemented stimulus packages and funding relief programs worth $45 billion for the private sector. It will surely help the stakeholders mitigate the impacts of COVID-19.
Relief measures for companies include tax exemptions, discounts/ postponements on utilities, energy and labor costs, provision of loans and income support. These efforts will surely go a long way in boosting investment and growth of the economy in the Kingdom.