Saudi Arabia Investment
The year 2019 saw unprecedented growth in terms of international companies setting up operations and inflow of foreign investments into the Kingdom of Saudi Arabia. This remarkable success can be attributed largely to concerted efforts by the Saudi Arabian General Investment Authority (SAGIA) through Invest Saudi- the national investment promotion brand- to promote the Kingdom’s competitive and open business environment. 1,131 new international companies started operations in the Kingdom in 2019, up from 736 in 2018, marking a 54 percent increase. This made 2019 a record year for the rapidly-developing business landscape of Saudi Arabia.
Invest Saudi, in its newly-released Investment Highlights Winter 2020 Report, provided an overview of the Kingdom’s investment environment in 2019 highlighting the latest business figures, reforms, and the year’s most important deals and projects. The Report highlights 150 investor deals across high-priority ‘Saudi Vision 2030’ sectors that SAGIA signed in 2019. Out of the international companies setting up operations in Saudi Arabia in 2019, 69% were under full foreign ownership while 31% were joint ventures with local investors. In 2019, the leading growth sectors have been construction, manufacturing and ICT with 193 new construction, 190 manufacturing and 178 ICT companies being established during the year.
The prosperity of the Kingdom depends on promoting innovation, attracting foreign investment and facilitating the private sector. Recognizing this important aspect, the Saudi Vision 2030 has resulted in remarkable economic transformation in the country.
A wide range of economic and social reforms aimed at improving Saudi Arabia’s business climate and attracting new investments were undertaken throughout 2019. This has resulted in the Kingdom’s growing foreign investment scenario. Saudi Arabia was ranked among the world’s top improver and economic reformer by the World Bank, climbing up 30 places in the World Bank’s Doing Business 2020 Report.
Saudi Arabia considers foreign companies, which want to expand their businesses in the country, as growth partners. The investment opportunities offered by the Kingdom pave the way for transfer of knowledge, skills and expertise, and best practices to local communities across the Kingdom. Therefore, it creates a win-win situation.
Strong growth is fueled by Saudi Arabia’s long-standing and strategically-important partners such as the United States and United Kingdom, with 100 UK companies and 82 US companies setting up their operations in the country in 2019. India, Egypt, Jordan and China were among the other top partner countries.
Global best practice models have been adopted and they have been combined with local knowledge and insights in order to promote the ease of doing business, removing all procedural bottlenecks. This makes it easier for investors from abroad to understand the unique Saudi culture and customs and results in better integration.
A total of 1,131 new international companies set up operations in the country in 2019. This is a result of the sweeping reforms initiated by Saudi Arabia since 2015.
Many more sectors, including healthcare, education, retail, military industries and real estate are now open for 100 percent FDI. FDI inflows tracked by SAGIA increased by 10.2% to $3.5 billion for January to September, 2019.
The current upward trend in investments is expected to grow significantly in the times to come.