Interview: Ibrahim Al Omar
To what extent have recent bilateral agreements translated into specific investments?
IBRAHIM AL OMAR: In the first half of 2017 Saudi Arabia saw foreign investment inflows of SR3.25bn ($866.5m) compared to SR1.39bn ($370.6m) in same period of 2016. To sustain this welcomed increase, Vision 2030’s objectives have guided us in a surgical examination of our commercial relationships with other nations to uncover new cooperation opportunities. The memoranda of understanding (MoUs) we signed with major international partners, including China, Russia and the US, have been a result of this approach. The mutual interest expressed through MoUs has given us a framework through which all parties can fulfil their commercial goals. Within that framework, we are engaging in discussions and workshops to help our partners move rapidly through the investment cycle, shape the most optimal business model to participate in Vision 2030 and establish their businesses in Saudi Arabia.
Which World Bank “Doing Business” indicators are being prioritised to reach the Vision 2030 targets?
AL OMAR: SAGIA’s Tayseer initiative is helping drive significant reforms to the commercial and investment environment to enhance the ease of doing business across the country. We have identified 279 key reforms, of which 45% have already been completed. For instance, we reduced the amount of documents necessary for import and export procedures by 60%; we established commercial arbitration centres to allow companies to enter into alternative dispute resolution; and we passed a new companies law to provide greater protection for minority shareholders.
We are continuing to address both the areas of strength in the “Doing Business” report, and the sub-indicators in which we have room for improvement. In the trading across borders category, for example, we are moving to automate all import-export procedures and enable shipping containers to clear ports in 24 hours. In starting a business, the Meras programme will make the process of establishing a business simpler by integrating all the steps needed for this process into four days. For the resolving insolvency category, the government will soon pass its bankruptcy law. This will provide investors with more legal protection should they become insolvent. It will also establish a legal framework for insolvency, which will reduce the current ambiguity of the wording of the law. This will ultimately give companies more confidence when making investment decisions in Saudi Arabia.
How will Meras streamline licensing procedures?
AL OMAR: The Meras online portal will ultimately house all requirements for starting a business under one roof, enabling investors to complete all procedures in four steps in four days. This includes obtaining the SAGIA licence. Investors currently applying for licences can still do so through SAGIA, where we only require them to submit two documents electronically. All applicants will receive a decision within 48 hours of their submissions.
How is SAGIA increasing foreign investment?
AL OMAR: Foreign investors can own 100% of their business in most domestic sectors. SAGIA, however, regularly reviews Saudi Arabia’s regulations with government partners to explore and identify appropriate opportunities to increase the participation of foreign businesses in areas in which they have traditionally needed a domestic sponsor. This is intended to provide investors with more flexibility in deciding how their businesses will operate in the Kingdom. For example, if they are looking to establish a domestic retail business for the first time, some foreign investors may want a Saudi joint-venture partner whose commercial strengths will complement theirs. Other types of companies, however, may want to have full ownership of their business. Ultimately, we aim to provide greater choice by raising the investment ownership threshold.
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