Riyadh, 1 May 2019 – As a result of an accelerated effort by the Saudi Arabian General Investment Authority to promote a competitive business environment, 267 new foreign investors were issued licenses in Q1 2019, permitting them to operate in the country. This number represents more than 4 new companies setting up in the country every day and marks a 70 percent increase when compared to Q1 2018.
Commenting on the reforms, Eng. Ibrahim Al Omar, Governor of the Saudi Arabian General Investment Authority (SAGIA), said: “Guided by Saudi Vision 2030, our country is undergoing a remarkable economic transformation. The continued prosperity of the Kingdom depends on sparking innovation, attracting foreign investors and empowering the private sector. The positive growth numbers that we have seen in the first quarter of 2019 represents a significant milestone on the road to 2030.”
Leading growth sectors include education and healthcare, following the recent lifting of foreign ownership restrictions in these industries. During Q1 2019, nine new education-related companies were established, compared to just one in Q1 2018.
Q1 2019 also saw important milestones in the healthcare sector, such as Hassana Investment Company, the investment arm of the General Organization for Social Insurance, forming a joint venture with UAE-based NMC Healthcare to acquire and develop a pan-Saudi network of healthcare facilities with a capacity of up to 3,000 beds and total investments up to SAR6 billion over the next five years.
Other sectors that saw strong growth in Q1 2019 include the construction industry, which saw 39 new foreign investors receive business licenses, compared to only 22 in Q1 2018. The mining and quarrying industry saw 11 new foreign companies receive licenses, compared to only three in Q1 2018. There were also a record number of new foreign entrepreneur licenses issued in Q1 2019, with 45 new startups setting up in the Kingdom, compared to 13 in the same period last year.
Al Omar continued: “The goal of our reform program is to help realize the potential that Saudi Arabia holds for the benefit of Saudi Nationals. The investment opportunities that the Kingdom offers foreign companies also offers opportunities for the transfer of skills, expertise and best practice to national communities, while providing new private sector job prospects for young Saudi men and women. We consider foreign companies who look to Saudi Arabia as our growth partners – whether they seek a joint-venture with Saudi companies or choose to set up on their own. They are integral to the success of our journey toward 2030.”
The 267 new companies that received business licenses in Q1 2019 represent a diverse range of global markets. Both China and India are well-represented, following high-profile royal visits to these countries in February. In total, 30 companies from India received licenses in Q1 2019, compared to 14 in Q1 2018. 13 companies representing China also received licenses, compared to just seven during the same period last year.
There was also strong growth from long-standing and strategically important Saudi partners such as the United States and the United Kingdom. 24 companies representing the United States were established in Q1 2019, compared to 20 in Q1 2018. 24 companies from the United Kingdom were also established, compared to 14 during the same period last year.
Al Omar concluded: “We want to make it easier for foreign investors to do business in Saudi Arabia. We have taken global best practice models and combined them local knowledge and insights in order to eliminate unnecessary barriers to doing business, while making it easier for our new friends from abroad to understand our unique Saudi culture and customs and how they can better integrate and contribute.”
SAGIA has played an important role in attracting foreign companies to establish operations in the Kingdom. In recent months, SAGIA has launched high-profile campaigns at key global events such as the World Economic Forum in Davos to raise awareness of the valuable and diverse investment opportunities that Saudi Arabia offers. SAGIA has also facilitated a series of high-level investor forums in China and India to coincide with Saudi royal visits earlier this year.
SAGIA has also led the National Licensing Reform Program. Through the NLRP, the number of licensing requirements in Saudi Arabia has been reduced by more than half. The NLRP has already successfully eliminated or modified more than 60 percent of over 5,500 licenses selected for reform.
Saudi Arabia is undergoing a series of social and economic reforms that aim to realize the Kingdom’s economic potential under Vision 2030. The World Bank recently ranked Saudi Arabia as the 4th largest reformer within the G20 and noted improvement across four key pillars in its latest Doing Business report.