Saudi Arabia

Investing

FDI in figures

According to the World Investment Report-2007, FDI stocks as percentage of GDP 9.3% in 2000 to 10.7% in 2005 and further to 14.9% in 2006. The Saudi Arabia government has been investing massively in physical and social infrastructure in the recent past as a bid to attract investment. Somewhat s table inflation and exchange rate as well as extensive privatization programs are some of the features which are drawing investors to the country. The efficient performance of the banking sector is driving the growth of non-oil private sector in the Kingdom.

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	1,942	12,097	18,293
FDI inward stock (millions USD)	n.c.	n.c.	51,828.0
Performance Index*, world ranking	127	92	63
Potential Index**, world ranking	29	28	n.c.
Number of Greenfield investments	37	57	97
FDI inwards (in % of GFCF)	4.5	24.0	32.1
FDI stock (in % of GDP)	n.c.	n.c.	14.9

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose Saudi Arabia

Strong points

After becoming a member of WTO in 2005, the foreign investment climate in the Kingdom has substantially improved. Some of the strong points of the country from investors prospective are economic stability, the largest market in the Gulf (with a population of over 27 million), sound infrastructure, a well-regulated banking system and relatively high per capita income.

Weak points

Some of the week points are: inadequate legal framework to resolve commercial disputes, lack of transparency in the enforcement of intellectual property rights, government requirement that companies

Should hire Saudi nationals, slow payment of some government contracts, a restrictive visa policy for all workers, a very conservative cultural environment, and enforced segregation of the sexes in most business and social settings.

Government measures to motivate or restrict FDI

According to the revised foreign direct investment law (revised in 2000) foreigners are now allowed to invest in all sectors of the economy, except for specific activities contained in a “negative list” that are off limits to foreign investors. This list continues to shrink as Saudi Arabia attempts to liberalize trade.

Foreign investors are no longer required to take local partners in many sectors and may own real estate for company activities. They are allowed to transfer money from their enterprises outside of the country and can sponsor foreign employees.

In order to facilitate investment into the Kingdom, the Saudi Arabian General Investment Authority (SAGIA) has set up an Investors Service Centre (ISC). The ISC must decide to grant or refuse a license within 30 days of receiving an application and supporting documentation from the investor.

Bilateral investment conventions signed by Saudi Arabia

Saudi Bilateral Investment Agreements

Administrative procedures relative to foreign investment

Freedom of establishment: Not guaranteed
Acquisition of holdings: Possible
Obligation to declare: .
Competent organization for the declaration: Ministry of Finance, Saudi Arabia
Requests for specific authorizations: Saudi Arabia maintains a Negative List that tabulates sectors not open to foreign investment (visit SAGIA site). The sectors currently closed to foreign investment include three manufacturing categories and 13 service industries. The list includes real estate investment in Mecca and Medina, some sub-sectors in printing and publishing, audiovisual and media services, land transportation services excluding the inter-city transport by trains, and upstream petroleum. SAGIA periodically reviews the list.