Investing in Saudi Arabia - Your Comprehensive Guide to Everything You Need.

Investing in Saudi Arabia - Your Comprehensive Guide to Everything You Need

 Investing in the Kingdom of Saudi Arabia has never been easier than it is now. The Saudi economy has shown great resilience in recent years. Amidst various global economic pressures, geopolitical instability, and crises such as the COVID-19 pandemic, Saudi Arabia emerged as the fastest-growing economy among the G20 countries in 2022. While most global economies experienced a slowdown in economic growth, Saudi Arabia saw consistent year-on-year GDP growth, supported by private sector activity.
 According to the General Authority for Statistics statistics, the net inflow of foreign investments into Saudi Arabia reached 105 billion SAR.
 The strong momentum of reform in Saudi Arabia continues under the ambitious Vision 2030 program, which supports the country's development and encourages investors worldwide to participate in various sectors. Investment opportunities in Saudi Arabia are increasing as a result of recent reforms that have reduced bureaucracy, simplified procedures, and accelerated the investment process.

 In this guide, we explore the benefits of investing in the Kingdom of Saudi Arabia, the key investment sectors, the legal requirements, and the main steps necessary for investing in the country.

What are the investment sectors in Saudi Arabia?

• Agriculture and Food Industries
• Energy
• Healthcare and Life Sciences
• Environmental Services
• Industry and Manufacturing
• Pharmaceuticals and Biotechnology
• Chemicals
• Real Estate
• Financial Services
• Transportation and Logistics
• Mining and Metals
• Tourism and Quality of Life
• Information and Communication Technology
• Human Capital and Innovation
• Aviation and Defense

You can find more details about each sector here.

What Type of Companies Grant You a Commercial Investment License in Saudi Arabia?

 All licenses are issued based on the principle of fair and equal treatment, allowing international investors to enjoy the same rights and obligations as local investors. Below are the types of companies through which you can obtain an investment license in Saudi Arabia:

• Professional Partnership Company
• Branch of a Foreign Company
• Joint Stock Company
• Limited Liability Company (LLC)
• Single Member Limited Liability Company

Advantages of Investing in the Kingdom of Saudi Arabia:

1. Unique Investment Opportunities:

 The investment environment in Saudi Arabia is rapidly evolving. Here is a glimpse of the amounts directed towards various sectors in the country:

• $1.3 trillion in untapped mining potential
• $100 billion in petrochemical investments planned by Aramco over the next decade
• $64 billion in investments in arts, tourism, and entertainment over the next decade
• $224 billion in healthcare spending over the next five years by both public and private sectors
• $150 billion in expected investments in transportation and logistics by 2030
• $1.8 billion in government-backed venture capital funding

2. Reform Initiatives within Vision 2030:

• Planned investments within Vision 2030 projects are estimated at $3 trillion
• It takes no more than 3 hours to approve an investment license
• The possibility to extend the investor license for more than 5 years
• It takes less than 24 hours to issue work visas, without a local invitation
• Full foreign ownership in investments is allowed at 100%

3. Strategic Geographic Location:

• Saudi Arabia has 10 seaports, forming the largest maritime network in the Middle East
• The country has 28 airports, transporting over 90 million passengers annually
• Saudi Arabia is the leading country in the Arab world in the maritime transport sector
• The Saudi railway network extends approximately 5,590 km, facilitating industrial transportation
• Saudi Arabia ranks first globally in road networks according to the World Economic Forum, with about 71,500 km of paved roads

4. Attractive Real Estate Solutions and Facility Prices:

 Saudi Arabia has over 35 industrial and economic cities where you can purchase property at competitive prices and benefit from the following favorable facility costs:

• Land rental costs $0.27 per square meter
• Energy consumption costs $0.049 per kilowatt-hour for the industrial sector
• Drinking water costs $1.1 - $2.2 per cubic meter, depending on the region and volume
• Treated water costs $0.5 - $1.4 per cubic meter, depending on the region and volume
• Natural gas costs $1.27 per British thermal unit
• Diesel barrels cost $15.26 per barrel
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5. Young and Competent Workforce:

  About 58% of the youth in the Saudi labor market are under the age of 35, and the education sector is one of the key areas of government spending in the Kingdom. Below are some figures highlighting the competence of the workforce in the country:

• The annual growth rate of the Saudi labor force is 6%
• The education sector in Saudi Arabia has a substantial budget, with the 2021 budget amounting to approximately $50 billion
• Saudi Arabia accounts for the largest share of government education spending in the Gulf Cooperation Council (GCC) countries at 80%
• In 2019 alone, around 82,483 international scholarships were awarded to Saudi students
• Saudi Arabia ranked 40th globally in the Global Talent Competitiveness Index in 2020
• Saudi Arabia ranked 9th globally in digital literacy in 2020

6. Strength of the Kingdom’s Economy:

• The projected growth rate of real GDP for 2021 is around 2.6%
• Saudi Arabia is one of the largest economies in the G20
• The share of foreign direct investment (FDI) from total GDP is about 34.50%
• Saudi Arabia ranks fifth among G20 countries in per capita GDP (purchasing power parity)
• FDI inflows to Saudi Arabia in 2020 amounted to approximately $5.4 billion
• The government’s budget for the fiscal year 2021 was about $264 billion
• Non-oil exports grew by approximately 52.10% in the second quarter of 2021
• The Kingdom's total reserve assets amounted to about $454.8 billion in August 2021.

Types of Licenses You Can Obtain for Business Establishment in Saudi Arabia:

• Agricultural License
• Audiovisual Media License
• Commercial License
• Consulting License for Engineering Offices
• Consulting License for Technical and Economic Liaison Offices
• Entrepreneurial License
• Scientific and Technical Office License
• License for Recruitment Agencies and Domestic Labor Services
• Industrial License
• Mining License
• License for Printing and Publishing Activities
• Professional License in Partnership with a Saudi Investor
• Real Estate License
• Service License
• Transportation License

How to Obtain an Investment License in Saudi Arabia:

 To issue an investment license in the Kingdom of Saudi Arabia, you need to provide the following two documents:

• A copy of the commercial registration of the establishment in its home country, authenticated by the Saudi embassy.
• The financial statements for the last fiscal year of the foreign company were prepared by a globally recognized legal office and authenticated by the Saudi embassy.

 Visit the Investor Services Portal to obtain your investment license.
 Please note that additional documents may be required depending on the activity and type of license as follows:

License for Public Buses or Metro Trains Within Cities:

• 3 additional documents
• Licensing Authority: Ministry of Transport

Audiovisual Media License:

• 1 additional document
• Licensing Authority: General Commission for Audiovisual Media

License for Printing and Publishing Activities:

• 1 additional document
• Licensing Authority: Ministry of Foreign Affairs

Entrepreneurial License:

• 2 additional documents
• Licensing Authority: Ministry of Investment