ATTRACTING GLOBAL INVESTMENT
The tourism sector has been the biggest beneficiary of the reforms in Saudi Arabia. Visa rules have been relaxed for leisure travellers. When it comes to entertainment strict regulations regarding live concerts have been relaxed, and cinemas have been granted licences over the last two years.
Being home to the two most holy places in Islam, Mecca and Madinah, Saudi attracts the highest number of pilgrims in the world. With its vision of doubling the list of heritage sites registered with UNESCO, Saudi is now exploring other tourism niches. The country aims to host 15 million Muslims from around the world for Umrah and Hajj, and it has invested into the expansion of facilities across Mecca and Madinah.
In February, the Saudi government elevated the Saudi Arabian General Investment Authority (SAGIA), by establishing the Saudi Arabian Ministry of Investment (MISA). SAGIA had been Saudi Arabia’s primary business licensing hub since 2000 and has been responsible for the kingdom’s investment promotion activity under the “Invest Saudi” brand, established in 2018. Until the creation of MISA, SAGIA reported to the Ministry of Commerce & Investment.
MISA will focus on regulating the business environment to ensure its attractiveness across risk, competitiveness, market opportunity, and the ease of doing business. The Ministry’s efforts are paying off. Q1 2020 represented the kingdom’s strongest period for inward investment since 2010, with significant increases quarter-to-quarter and from the same period last year. Nevertheless, monthto-month growth began to slow down in March, in line with the impact of COVID-19 on global investment trends.
In Q1 2020, 348 new foreign investment projects were licensed—a 20% increase over the previous quarter and a 19% year-on-year increase. Of these 328 projects, 73% were fully owned by foreigners and 23 were joint ventures between foreign and local companies. MISA’s “Emerging Sectors,” which include education, financial services, and housing, saw the highest number of new foreign investment projects, recording a 40% quarter-to-quarter increase, followed by the industrial, manufacturing and ICT sectors.