More than $936m in funds were recently announced at the GEC 2022 to facilitate access for international companies to Saudi Arabia’s markets.
Saudi Arabia is emerging as a thriving international business hub as the recently announced new investment law by the KSA Ministry of Investment is estimated to increase international business by 50%, according to Sovereign Saudi Arabia.
The appeal of the law, that declares that both local and foreign investment will receive equal treatment, has been strengthened by Saudi Arabia’s recent award-winning presence at Expo 2020 Dubai which demonstrated the global value of the Kingdom’s vibrant economy. As the country looks to diversify from oil exportation, more than $936m in funds was recently announced at the Global Entrepreneurship Congress 2022 to facilitate the access of international companies into Saudi Arabian markets.
Before the new investment law was announced, official data from the World Bank projected the country’s GDP to reach $820bn by the end of 2022, in comparison to $700bn in 2020. However, this recent development, which will see foreign investors enjoy neutral treatment without any discrimination, could see KSA’s business activity spike significantly to shatter the World Bank’s projections.
Saudi’s new investment law is set to increase the attractiveness of doing business in the Kingdom as it removes any commercial advantage previously extended to Saudi companies. As a result, the law will grant foreign investors the freedom to manage, sell and dispose of their economic projects, as well as to own any necessary properties that will ensure smooth business operations. They will also be able to conclude commercial contracts with the full support of all competent authorities. Moreover, both local and foreign investors will be subject to the same sectoral approval requirements for licenses and registration, as well as for approvals or permits for certain economic activities or special economic zones.
Interest in new businesses entering the Kingdom has been catalysed by the country’s recent participation in the Expo 2020 Dubai, which highlighted the Saudi 2030 Vision and ambitious economic growth agenda. Serving as a window to the country’s youthful ambition, the Saudi Pavilion recorded nearly 5m visitors (which represented almost 25% of the total attendees of the six-month-long global event) and illustrated the country’s growing potential as a leading business hub.
Speaking about the law, Paul Arnold, Managing Director of Sovereign Saudi Arabia said: “The KSA Pavilion created a new awareness of Saudi Arabia’s business potential to more than 4.6m visitors and this new Investment Law only adds to the momentum to further reinforce KSA’s position as one of the most globally appealing places to conduct business. By legally enforcing the principle of competitive neutrality to public and private investors, this removes any previous commercial barriers-to-entry. Whether you’re looking to expand your company’s presence or launch your brand for the first time, if you have a contract in-hand, it has never been a better time to enter and invest in the Saudi market.”
With unemployment on the decline and a robust non-oil diversification steadily progressing, the Kingdom’s economy is expected to more than double in 2022. Furthermore, Saudi Arabia’s new investment law will level the playing field for foreign investors to bring about greater economic growth in the coming years as Saudi Vision 2030 is realised. As Saudi Arabia continues to rapidly restructure and adapt, it demonstrates that the optimism being witnessed is warranted.