Interview: Abdullatif Al Othman
What steps has SAGIA taken to make investing in Saudi Arabia easier for foreign companies?
ADBULLATIF AL OTHMAN: Much of what we have done in recent years has focused on making sure companies enjoy a seamless process when investing and operating in an investment environment that is continuously evolving alongside global business standards. From inception to operation, we want to make the investor’s life in the Kingdom as easy as possible.
Quite simply, it starts with being available to answer any questions that an investor might have. We are prepared and quite excited to speak to anyone that is seriously considering Saudi Arabia as an investment destination. Next, we have taken a number of measures to remove barriers and streamline the licensing process. At SAGIA, we have created a “one-stop shop” where an investor will find all government ministries relevant to their business under one roof. This saves a great deal of time, as investors do not have to go to all of the ministries individually. We also introduced a fast-track service that awards companies falling under certain categories investment licences in five days or less. Lastly, we believe that it is the variety of opportunities available in Saudi Arabia that is the country’s biggest draw, and which will prove the biggest attraction for prospective investors. To make it easier to find these opportunities, we have put them all into our Invest Saudi app.
In the long term, which sectors offer the best options for Saudi Arabia to diversify its exports?
AL OTHMAN: Non-oil exports have increased by 52% over the past decade, indicating some progress in the expansion of export-competitive industries. However, there is still more work to do.
Our focus is on the following: we want to deepen and capture added value in energy and downstream chemicals; we want to accelerate the development of emerging sectors like health care, transport and mining; we want to transform the service sector in retail, tourism, real estate, financial services and professional consulting; and we want to increase our competitiveness by cultivating a leading ICT sector through innovation and research.
At the moment, the Kingdom has programmes and initiatives that are seeking to bolster all of these areas. Further development and success in these sectors will give us the diversity in exports that we are looking for in the future.
What are the key factors that make Saudi Arabia an attractive destination for foreign investment?
AL OTHMAN: First, we have a stable economy that is continuing to grow, based on strong fundamentals. We have an “AA” credit outlook; our debt to GDP ratio is just 3%; we are a member of the G20 and the WTO; and we are the world’s third-fastest-growing economy, just behind India and China.
From this solid foundation, Saudi Arabia offers companies a platform from which they can reach markets in the rest of the Middle East, and indeed some of the fastest-growing markets further afield. Within a three-hour flight of Riyadh, 300m people can be reached. No matter where a company is located in Saudi Arabia, it will have access to a market that will enable it to substantially expand and deepen its client and consumer base. Lastly, we offer a favourable regulatory environment as well as the commitment of the government to its diversification strategy. We allow 100% foreign ownership in most sectors; there is no income, sales, value-added or property tax; we have a very competitive corporate tax rate; companies can enjoy the full repatriation of profits, capital and dividends; and companies have access to affordable energy and land.
The combination of the above factors – strong economic growth, ease of access to a large and growing market, and regulations conducive to a highly favourable business environment – make the Kingdom an ideal destination for foreign investment.
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