Saudi Arabia Beyond Oil Aramco Sourcing & Localization Symposium Paris, Tuesday, Octobre 25
The Saudi Arabian Economy 20th 5th 17th 29th Largest Highest Largest Largest Economy Growth Exporter Importer (G20) 2 * Source : IMF World Bank Data 2015
Saudi Arabia Today The heart of the Arab and Muslim world A bedrock of regional stability A Rich cultural heritage A central location between Europe, Asia and Africa A young large and growing demography, Rich in Energy Resources Global Leader in Petrochemicals Minerals including aluminum, phosphate, gold, copper, uranium and other raw materials. 3
Kingdom of Opportunities A Vision that changes Everything * KAFD King Abdullah Financial
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Pillars 6
Themes A Vibrant Society A Thriving Economy An Ambitious Nation 7
A Strong Investment Ecosystem Top 5 80 Remove all obstacles Empower private sector development Encourage Innovation & Competition Open up new investments From 36 20 Shift governments role to empower private sector Enable private sector to deliver traditionally government run services Improving our E-Government Survey Index ranking Improving our Government Effectiveness Index ranking 8
The Heart of the Muslim and Islamic World 30 million 8 million Umrah Visitors to the holy sites
A Vibrant Society 80 years 6% 10 Top 100 3% 74 26 Life Expectancy Disposable Income on Entertainment & Leisure OECD Social Capital Index 3 Saudi Cities Global Status 10
Empowering Localization Defense & Military 3 rd Biggest Military Spender 2% Currently only 2% of Spend in the Kingdom Vision 2030 Goals 50% Localize 50% of Military Spending 11
Connecting 3 Continents 25 10% of World Trade passes by the Red Sea Improving Governance and Easing Trade Movement 49 Logistics Performance Index Top Infrastructure 1st in the GCC 12
A Thriving Economy 5.7 % 45% to 65% 20% to 35% 3.8 % FDI s Contribution to GDP Private Sector Contribution to GDP SMEs Contribution to GDP 13
Seamless Business Experience Top 10 25 Ease of Issuing Instant Business Visas Global Competitive Index* Streamlined Government Procedures 14 * The Kingdom currently ranks as #29
Taxation and Duties G20 Corporate Tax Rates 2015 Current Future 2020 Saudi Arabia Mexico 20% 30% No VAT or Sales tax No personal income tax Low VAT or Sales tax (selected products only, maximum 5%) France 33% No land or property tax No land or property tax (0.5 % to 1% India Brazil 34% 34% Full repatriation of profits, Subject to 5% withholding tax Municipal fees on commercial) Argentina 35% Japan 36% USA 40% 15
Financial Support Up to 75% Up to 50% Project Cost Saudis salaries* Repayment Period Grace Period 15 Years 2 Years Period 2 Years 16 * Source : SIDF, HRDF * Certain Conditions Apply
Kingdom of Opportunities A Vision that changes Everything * KAFD King Abdullah Financial
Clear Goals, Clear Roles THE STRATEGIC PARTNERSHIPS PROGRAM The Privatization Program 1. Enhanced Cooperation Between Entities 2. Effective Planning 3. Dynamic Governance 1. Building Economic Ties 2. Connecting Cultural & Social Ties 3. Building Political 1. Empowering Private Sector 2. Differentiating the Economy 3. Knowledge Transfer 543 Initiatives 178 Strategic Initiatives 376 Key Performance Indicators Transparency 21
SAGIA - One Stop Shop Advisory Services Liaising Services Licensing Services Matching businesses to Investment opportunities Tailored Coordination with all government departments Instant Online Licenses
License and Requirements Manufacturing 1. SAR 1,000,000 Minimum Capital 2. No local partnership required, 100% Foreign Ownership, EPC 1. No Minimum Capital 2. Minimum 25% Saudi Percentage Sharing is required Service 1. No Minimum Capital 2. No local Partnership required,100% Foreign Ownership) Trading 1. With 25% minimum local partnership, SAR 27,000,000 million capital 2. No local partnership, is required 100% Foreign Ownership, with certain requirements (next slide) Technical and Scientific offices 1. No Minimum Capital 2. No local partnership, 100% Foreign Ownership, 3. Limited number of Employees (up to 50) 4. prohibited from performing any contracts or commercial activities or investments
100% Trading License General requirements: 1. Companies with A presence in at least three countries 2. 30 Million SAR paid in capital 3. Recruit Saudis, and develop and implement a plan to promote Saudi nationals to leadership positions in the first five years and to ensure its continuity. 4. Train 30% of Saudi nationals annually. Option 1: Investment of SAR 300 million over the first five-year period (inclusive of paid-in capital) Option 2: Investment of SAR 200 million over the first five-year period (inclusive of paid-in capital), and committing to at least one of the following during the first five years: a. Local Manufacturing: (of 30% of the company s products sold in the Kingdom) b. Research programs: (R&D intensity of at least 5% of total KSA Sales). c. Distribution and logistics hubs: (Establishment of a regional hub, in-house sales and aftercare services).
Creating Opportunities Unique Opportunities Identified Projects 21
Point of contact: Email: investorcare@sagia.gov.sa www.sagia.gov.sa/