KSA Chemical industries, real estate and tourism

A world investment hub within the vision 2030:

KSA is considered as a world center for attracting investments, thanks to the large capacity of the markets and the giant projects that are being undertaken in the Kingdom, the easy and attractive investment systems that are set up to attract capitals, start up and manage businesses. The KSA vision 2030 that was announced in 2016 will allow moving to a new phase of unprecedented development in the next 15 years, and the Kingdom will thus be able to reach a progressive growth irrespective of oil prices by relying on non-oil income sources. KSA is expected to launch programs to concretize this vision, the most important of which being the restructuring of the public investment Fund and the giant Saudi oil company ARAMCO, in addition to the national transformation program, the international strategic partnership program and other programs covering various economic, social and cultural aspects. The vision includes major projects, in particular:

-     Privatization of minority shares at higher values, like offering 5% of ARAMCO to public subscription, and a minority share of Ryad’s airport and other.

-     Transferring public lands to the investment fund for their development.

-     Building the King Selman bridge linking KSA and Egypt so it would become the most important land crossing point in the world and will provide considerable opportunities for investment and construction.

-     Providing several opportunities for logistics, in airports, ports, industrial compounds or hubs that will be established.

-     Restructuring the housing sector as to contribute to increase the level of Saudis’ ownership.

-     Restructuring subsidies in order for middle income and lower middle income earners to benefit thereof.

-     Restructuring many military deals so as to link them to Saudi military industries benefiting from abundant minerals less than 5% of which only are being exploited, and establish a holding company for governmental military industries expected to be offered for subscription by the end of 2017.

-     Granting the “green card” for individuals wishing to have a long residency in KSA, knowing that it will start to be implemented within the next five years.

-     Developing tourism, enhancing the cultural services and the visibility of the history of civilizations in KSA. Highlighting archeological sites, establishing the largest Islamic museum in the world, developing the Hajj and Umrah projects, building the Mecca underground and carrying on the upgrading of the infrastructure through exploiting the lands surrounding the Sanctuary in Mecca.

Advantages:

KSA provides an attractive environment for foreign investments, like access for foreign investors to full ownership in most activities, non-existence of minimum capital requirements for limited liability companies, freedom in transferring and modifying the property shares while benefiting from funding and soft loans programs in both real estate and industrial sectors. With regards to placement, investors have free hand to select directors while they are encouraged to recruit Saudis given that half of their salaries is borne by the Human Resources Development Fund during the incorporation phase of the foreign investors’ projects. Attractive factors add up to these privileges in terms of low tariffs for energy, water and electricity, easily obtained permits and a flexible delivery of visas to investors.

The following table shows the progress KSA made in important investment sectors, as well as areas needing further development, in particular corporate laws, cross border trade and procedures for starting a business.

 

KSA’s ranking in the World Bank indicators for ease of doing business for 2017 among 190 countries

 

Source: World Bank Doing Business 2017

 

Investment projects by the top 10 sectors, 2012-2016, (US$m)

 

Source: Fdi markets

Major countries investing in KSA, 2012-2016

Ibid