Saudi Arabia’s General Investment Authority has extended the licensing period available for foreign investors operating in the kingdom to five years – from its current one year – as part of its ongoing efforts to diversify its oil-dependent economy.
The Zawya news agency reported today that the investment authority also said that those wishing to extend the licensing period after the five-year period expires will be able to do so; and that foreign investors would also still have the option of holding a one-year licence only, if this were their preference.
“The new licensing regulations are aimed at drawing more foreign investment into the kingdom and raising the country’s economic competitiveness”, Zawya quotes the SAGIA statement as saying.
It also reports that SAGIA has undertaken a number of measures that have been intended to “ease investment processes” in Saudi, including launching a digital licensing facility where an investor would be able to receive a licence electronically, which it said is seen as potentially reducing the time required to obtain a business license to four hours, from two days.
“The kingdom has also introduced a broad set of reforms to its capital markets, to enhance its global investment appeal; the number of foreign investors in Saudi stock market has more than doubled over the past year alone”, the Zawya article adds, quoting the chairperson of the exchange, Sarah Al Suhaimi.
The Saudi Stock Exchange, known as the Tadawul, first opened to foreign investors in June, 2015.
Today’s Zawya report notes that as a result of its recent efforts to make its economy more welcoming to foreign investment, Saudi Arabia currently ranks second among the high-income, G20 countries in the area of reforms aimed at improving the climate for doing business, according to the World Bank’s Ease of Doing Business latest ranking.
As reported, Saudi Arabia has been in the throes of a major transformation known as “Vision 2030” for almost three years. It was begun in 2015 by crown prince Mohammed bin Salman, pictured left, who took over the Kingdom’s No. 3 job in April 2015, and who is now in full charge of running the economy.
Other changes that have been aimed at boosting the ease with which foreigners and foreign entities may invest in Saudi Arabia have included new legislation governing bankruptcies, franchising and mortgage pledges, and there are plans to implement a major reform of the legal system.
The downside for expatriates living in Saudi Arabia, however, is that many of the reforms have been aimed at ensuring that Saudi nationals replace foreign workers wherever possible, and that those non-Saudis who continue to remain in the country pay for the privilege, in the form of paying more for certain things, such as through the introduction of a value-added tax.
Last month, as reported, Saudi nationals and expatriates alike began the new year “with a jolt” as this was when a number of new structural economic reforms, including a major hike in fuel prices, the introduction of VAT and a new financial levy on expatriate workers came into force.