Cihan Yılmaz, General Manager KSA, MAPA Construction and Trade Company: Interview

Interview: Cihan Yılmaz

What should investors and local entrepreneurs take into account prior to investing in the Kingdom?

CIHAN YILMAZ: Saudi Arabia’s economy is among the 20 largest in the world, and the Kingdom is the only G20 member country in the GCC. The country offers an attractive market for investors and has a stable outlook for the long term. While there had long been barriers imposed on foreign investors, in 2016 the government started an ambitious series of socio-economic reforms, known as Vision 2030. The programme is aimed at diversifying the economy, creating private sector jobs for a growing population, and increasing the private sector’s contribution to the economy by encouraging local and international investment. Vision 2030 offers a number of attractive opportunities for foreign investors and entrepreneurs in several sectors, including health care, finance, housing, education, energy, mining, municipal services and entertainment.

In this context, the many opportunities for foreign investors and local entrepreneurs are available to those who have long-term investment plans. Prior to investment, however, it is important to conduct due diligence and to try to gain an understanding of the market and its socio-economic dynamics as much as possible. When making investments in most parts of the world, one needs to do proper research and be prepared to adapt to what may be an evolving environment, and this applies when investing in to Saudi Arabia.

Identifying local opportunities that align to one’s business model and portfolio is key for any international company looking to engage in commercial activities in the Kingdom. Foreign expertise is still needed to support the growing local workforce in some sectors, and this presents significant business opportunities for those willing to grasp them. The Kingdom has been taking the necessary steps to reinforce and diversify the capabilities of its economy, utilising its key strengths to enable a fully diversified future marketplace and to become one of the largest economies in the world.

How can investors respond to challenges arising from a transforming regulatory environment?

YILMAZ: In the context of Vision 2030, regulations are changing quickly, and one must be prepared for a rapidly evolving environment. Many regulatory changes are taking place at once. The challenge for the public sector is to monitor and keep track of the progress being made under Vision 2030. Several institutions like the National Centre for Performance Measurement have been created for this purpose and have already demonstrated positive results. For the private sector, the challenge lies in closely following the goals of Vision 2030 and the National Transformation Programme in order to be familiar with and prepared for present and future conditions. It is also important to closely monitor the new rules for the tax regime and the standardisation of Customs regulations, which can have implications for supply chain management. Risk evaluation for any project is the most important element for long-term investors, and it can sometimes be difficult to fully assess the risks affiliated with an investment; however, high risks often lead to higher returns.

In what ways has the lifestyle in Riyadh for corporate travellers and new residents evolved recently?

YILMAZ: Recently, the social scene in Riyadh and Saudi Arabia at large has become undeniably more attractive. The Saudi Seasons initiative took place in 2019 and 2020 and brought in a number of new activities, including concerts, circuses, live shows and international pop-up restaurants. For new arrivals to Riyadh, there are things to do every day of the week. There are golf clubs; desert and hiking tours; historical and heritage sites; museums and several stables for those who enjoy horseback riding. Many residents play tennis, and fitness centres are a popular option for people looking to stay fit. The dining scene is one of the best in the region. There is a range of options, and there are a number of renowned international brands, including Cipriani, OKKU and COYA.

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