Saudi Arabia discusses regulation change to allow expats right to invest
The Saudi Arabian Ministry of Trade and Investment is to assess a plan to amend regulations to allow expatriates to invest in the Kingdom via a new parallel market system, that will operate within specific regulations and standards, in addition to paying taxes.
Majed Al-Qassabi, minister of trade and investment said in an interview with local news outlet Arab News, during the launch of the region’s “growth-parallel market” initiative, that the ministry “intended to attract quality foreign investment to create new jobs and contribute to the transfer of knowledge to Saudi Arabia.”
Mohammed bin Abdullah Al-Kuwaiz, vice chairman of the Capital Market Authority, said that the parallel market will precede the main market to be available to various categories of foreign investors in the future.
“The Capital Market Authority is currently working with [the Saudi Stock Exchange] Tadawul to prepare all the legal and technical aspects. The declaration of the schedule is expected during the second quarter of this year,” Al-Kuwaiz said.
He added that Saudi Aramco, the state-owned oil company of Saudi Arabia’s launch on the Saudi Stock Exchange, depends on the inclusion of the market in emerging global markets indices, which requires regulatory and structural aspects.
Al-Kuwaiz said the launch of the growth-parallel market will provide funding through the financial market for a new class of companies and productive projects.
He added: “It is considered a channel to diversify investments and increase the pace of investment to establish new projects.”
Saudi Arabia, which last year embarked on what its government calls “Saudi Vision 2030”, in an effort to reduce the country’s dependence on oil by diversifying its economy and engaging more with the outside world, has been targeted by Dubai-based financial firm Globaleye.
Globaleye’s Saudi plans
As reported, Globaleye founder and chief executive Tim Searle exclusively told International Investment that the company is in the process of adding Saudi Arabia, along with the US and Australia to its growing number international outposts.
Saudi Arabia’s attractions for Globaleye, including lots of expatriates in urgent need of financial advice, is also due to its having been effectively closed to the financial advice industry for many years, according to Searle.
He said that Globaleye’s move into the jurisdiction is being facilitated by a joint venture it recently concluded with an as-yet-undisclosed insurance broker, which is already licensed by the Saudi Arabian Monetary Agency. As a result, plans are now under way to launch an operation there “imminently”, beginning in the Jeddah market.
“As markets go, Saudi dwarfs all the others in the GCC [Gulf Co-operation Council],” Searle says. “It represents a fantastic opportunity; it’s always been regarded as the Gulf’s ‘honeypot’, but we would never go in there if we weren’t set up correctly there, with the right partners and licence.
“But as we’ve got provisional approval to operate as the approved financial adviser [alongside the un-disclosed JV partner], this will allow us to go into Saudi Arabia at last, and start developing a business there.”
The full interview with Globaleye founder Tim Searle is in the March edition of International Investment. To read the magazine online or to subscribe for free, click here.