KSA draws US$18.3bn in FDI

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Biggest market: Saudi Arabia has widened investor’s reach in different sectors with the new SEC ruling.

Saudi Arabia has reported unprecedented levels of foreign direct investment (FDI) in 2006, the Saudi Arabian General Investments Authority (SAGIA) has revealed.

"The Kingdom has continued to attract foreign investments from countries such as the United States, Japan and the European Union," Awad Al Awad, undersecretary of the SAGIA governor said in an official statement. He highlighted that non-US investments from countries like Japan and Europe increased from 38% in 2000 to 47% in 2006.

"The volume of foreign investments in 2006 is estimated at US$18.29bn, a 51% growth compared to 2005 while the volume of the domestic investments amounted to about US$33.33bn in the same year, registering a growth rate of 9% against the previous year," Al Awad said.

Sagia has been evaluating the investment environment in Saudi at regular intervals. It has also been undertaking necessary studies and research for the advancement of these investments in collaboration with local and global research entities including the World Bank, according to Al Awad.

"Taking into account the fact that the Kingdom has the largest and most important economy in the region, it will not be a surprise if foreign investments flow into the country," Al Awad said, emphasising that the biggest share of foreign investments was poured into energy and energy-related industries in 2006.

He explained that the Ministry of Commerce and Industry's resolution to cut back the establishment cost of new companies will confidently add to the increase in the number of investment companies in the Kingdom and will also result in doubling local investment deals, particularly small and medium projects as well as technology-based industries.

Expatriates in Saudi Arabia will now have the opportunity to invest in sectors such as insurance services, wholesale and retail trade, air and train transport, and communication services in the Gulf state. This came as a result of a recent landmark decision by the Supreme Economic Council (SEC).

"The SEC has revised the negative list of economic sectors for investments allowing foreigners to invest in new areas," said Abdul Rahman Al Tuwaijeri, secretary general of the council. He explained that the SEC has created new sectors in the economy aimed at foreign investment to go hand in hand with HRH King Abdullah's plans to strengthen the economy, attract more FDI and boost private sector participation.

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