Invest Saudi
Table of Contents Saudi Arabia at a Glance Saudi Arabia Economy Why Invest in Saudi? Key Incentives Available for Investors Strategic Sectors & Opportunities Investments We Value the Most Saudi Unique Offerings 2
Saudi Arabia at a Glance The largest Arab country in the Middle East Population of 27 million, size 2,000,000 Km 2 (1/4 the size US) Young population (35% under 15yrs, and 61% within working age) Largest fossil fuel deposits; 1/4 of the world s proven oil reserves & the 4 th largest gas reserve Responsible global player at the energy market Member of the G20 that plays an active role in addressing global issues Rich culture, diverse geography, and a target destination for over 1 billion religious visitors per year 3
Saudi Arabia Economy 18 th largest economy in the world, and the largest economy in the Middle East with a GDP of US$600 Billion (2011) 6.7% growth rate in 2012, 5.7% growth in 1 st half 2012, second highest economic growth in the world for the same period after China Growth driven mainly by strong energy sector, government expenditure & robust contribution from the private sector Largest recipient of FDI in the ME (US$141 billion over the past 5 years) Government public debt is only 4% of GDP (down from 100% in 1999) and has the 3 rd largest foreign exchange reserves in the world Government policy revolves around diversification towards high valueadded manufacturing and service activities $0.37 trillion allocated budget for the current 9 th Development Plan and over one-half is going to human resource development 4
Evident by IFC Ranking Saudi Arabia leads the region in FDI in-flows and had the 22nd largest amount globally in 2011 out of 216 countries Country Rank FDI Inflows (USD B) United States 1 $227 China 2 $124 Belgium 3 $89 Hong Kong, China 4 $83 Brazil 5 $66 Singapore 6 $64 United Kingdom 7 $54 Virgin Islands 8 $54 Russian Federation 9 $53 Australia 10 $41 France 11 $41 Canada 12 $41 Germany 13 $40 India 14 $31 Spain 15 $30 Italy 16 $29 Mexico 17 $20 Indonesia 18 $18 Luxembourg 19 $18 Chile 20 $17 Holland 21 $17 Saudi Arabia 22 $16 5 Source: World Investment Report 2012, UNCTAD
Why Invest In Saudi Arabia? Booming economy, more than tripled its GDP in the past 10 years Institutionalized economy fueled by massive government spending of US$718 billion and accumulated investments of US$141 billion provided by FDIs Increased role of private sector in Saudi Economy (30% of GDP) An impressive record of political and economic stability in the region Rewarding tax system, 20% corporate tax with ability to carry losses forward 6
Key Pro Business Reforms 1 Starting a Business The minimum capital requirement eliminated and company registration was sped up Simplify formalities for commercial registration and reducing registration fees by 80% Creation of a one-stop office at the Ministry of Commerce that merged registration procedures and simplified publication requirements Combining together representatives from the Department of Zakat and Income Tax and the General Organization of Social Insurance at the Unified Center to register new companies with their agencies 2 Creating a unified office for real estate services 4 Getting Credit Extended credit bureau s coverage to commercial entities Modernized Commercial Lien Act to prioritize creditors, create a central registry, allow other asset types to be used as collateral, and improve out of court settlement procedures Creating a unified collateral registry Dealing with Construction Permits Combining some of the procedures and having representatives from utilities companies at the unified office 3 Protections for minority shareholders were strengthened Protecting Investors
Key Incentives Available for Investors - No minimum capital requirement - Accelerated investment application, business registration and set-up process, with a guaranteed decision for foreign investment applications within thirty (30) days of submission to SAGIA - Equal benefits, incentives and guarantees for foreign investors and domestic companies - No personal income tax, no value-added tax, no sales tax, no land tax and no property tax - No restrictions on sponsoring foreign employees 8
Key Incentives Available for Investors - 100% foreign ownership permitted - of companies, plant, equipment, projects and property - Full repatriation of capital, profit and dividends allowed, subject to a 5% withholding tax - Low-cost land in KSA's 28 industrial cities and four economic cities - No export duties within the 17 countries of the Greater Arab Free Trade Area - Few restrictions on currency conversion, exchanges and transfers - Customs duties exemption on imported machinery, equipment, raw materials and spare parts if they are for industrial use 9
Key Incentives Available for Investors - Duty drawback, a customs refund for raw material imports that are processed and exported as finished goods - Preferential treatment for national products in Saudi government procurement - Export credit, financing, guarantees and insurance through the Saudi Export Program - Financial support for the training and employment of Saudis from the Human Resources Development Fund - Low-cost loans from the Saudi Industrial Development Fund and Public Investment Fund (up to 50% of project reaching US$133 million) 10
Strategic Sectors & Oppurtunties Energy & Petrochemical Manufacturing Transportation & Infrastructure Information Communication & Technology Health Care & Life Science Human Capital Development 11
Saudi Arabia 2012 Budget Total - US$bn + vs.ya Projects Total Expenditures 184 +19% Excl. $67bn for 500.000 housing units Priorities Education 45 +13% Health & Social Affairs 23 +26% Water, Agri, and related Infrastructure Transport & Logistics 9 +40% Municipality services 8 +19% +742 schools (on top of 2900 under construction) +40 colleges $5bn for 120.000 studentssabroad +17 new hospitals (on top of 130 under construction ) 15 +13% Industrial cities water supply and treatment Jeddah airport completion +4200km new roads (on of 28.000km under construction )
Projected capital expenditure across all sectors in the Kingdom of Saudi Arabia Mining Public Administration Real Estate Manufacturing Education, health and social services Others 1 USD bn 87 94 +5% p.a. 98 102 106 110 49 53 55 57 60 61 7 8 8 9 9 10 7 7 7 6 6 6 6 6 6 3 5 17 3 6 18 3 6 19 3 20 4 21 4 22 13 2011 2012 2013 2014 *1 Others include construction, agriculture, utilities, wholesale & retail trade, hotels, transport & communication, financial intermediation, private household services SOURCE: WIS Global Insight 2015 2016
Investments We Value the Most - Create Rewarding Jobs and Competitive Workforce - Help Diversify the Economy - Transfer Technology and Promote Innovation 14
Saudi Arabia Unique Offerings - 28 Industrial Zones - 3 Industrial Cities - 4 first of its kind Economic Cities
28 Industrial Cities Overseen by Saudi Industrial Property Authority
Fully Serviced & State-of-the-Art Infrastructure Luxury Hotels Residential Complexes Advance Communication
Model Factories Plug & Play concept
Success Stories
Success Stories
Why Invest in the Economic Cities? Innovative Public- Private Partnership Large Scale Best-in-Class Regulations World Class Infrastructure 60x24x7 Government Services National & Global Connectivity Open Gender Occupation Nationality Visas Attractive Life-Style 21
The Economic Cities King Abdullah Economic City Jazan Economic City Knowledge Economic City Prince Abdulaziz Bin Mousaed Economic City Land Area: 168 km² Land Area: 102 km² Land Area: 4.8 km² Land Area: 156 km² Population: 2 million Population: 300,000 Population: 150,000 Population: 300,000 Pharmaceuticals FMCG Light industries Building Materials Education Healthcare Logistics Petrochemicals Heavy steel Food Processing & Packaging Construction material Tires manufacturing Tourism Knowledge Based Ind. Healthcare Hospitality Tourism Education ICT Logistics Agribusiness Medium and Light Industries Building Materials 22
Key Investors in the Economic Cities 23
24 Who We Are?
SAGIA Overview The Saudi Arabian General Investment Authority (SAGIA) was created by the Saudi Government on April 10, 2000 as part of measures geared towards formalizing the process of economic liberalization Our mission To promote, attract and retain quality local and foreign investment in untapped sectors by developing the optimal business environment Investment Affair Investment Development & Promotion Investment Services 25
Key Functions Investment Affairs: - Enhanced business environment (regulations, human capital, services) - Compelling foreign investment laws and licensing processes - Robust research and data centers pertinent to investments Investment Development & Attraction: - Integrated investment strategy aligned with KSA s economic aspirations - Improved relevant economic indicators through value-adding investments Investment Services: - Superior services to domestic and foreign investors through e-services - Comprehensive support and services to local high-end SMEs 26
Thank You 27