Foreign direct investments surge predicted amidst reforms
According to the Saudi Arabian General Investment Authority (SAGIA), foreign investment licence issuances have increased by 130 per cent during the first quarter of 2018. This increase is accompanied by economic reforms, which include a pledge to increase FDI from US$8 billion to US$18.6 billion. This surge has been attributed to the recently instituted reforms in the Kingdom, which include streamlining waiting times for licence issuances from 53 hours to less than four hours on average. In addition, 100 per cent ownership rights for foreign investors have been extended to numerous sectors including communication services, film distribution and air and space services. Recent digitisation of commercial courts has also aided this process through successfully cutting the average time taken to resolve cases from two months to a mere 72 hours on average. This has been accomplished through an online portal which has allowed the courts to provide in excess of 20 million judicial services and 46,000 sessions since October 2017 through digital and traditional means.
Reuters – 22 September 2018
State spending predicted to increase by 7% in the coming year
The Ministry of Finance forecasts an increase in spending to SR1.106 trillion (US$295 billion) in 2019. Similarly, revenues are expected to increase to SR978 billion, an 11 per cent increase from 2018. If correct, these figures would lead to a SR128 billion deficit or 4.1 per cent of GDP in 2019, a reduction compared to 5 per cent in 2018. Although the assumed oil prices used in the budget forecast were not disclosed, the recent four-year high spike in oil prices to US$82 a barrel may be the cause of the elevated revenue forecasts.
Reuters – 30 September 2018
Saudi Arabia invests SR500 billion in industrial and service projects
In an effort to promote diversification, Saudi Arabia has invested SR500 billion (US$133.3 billion) in services, industrial and logistics projects. Demand has particularly increased in industrial investments following concentrated efforts from the Saudi Industrial Property Authority (MODON). In accordance with the directives of King Salman and Crown Prince Mohammad bin Salman, MODON has established 35 industrial cities covering 196 million square metres in industrial land. Existing industrial cities contain over 3,300 productive factories employing a workforce that is 500,000 strong.
Reuters – 7 October 2018
Work permit issuance and renewal linked to housing rent contracts
The Ministry of Labor and Social Development and the Ministry of Housing announced that work permit issuances or renewals are now linked to the verification of housing contracts. This process, which began in September, is in accordance with the decision of the Council of Ministers issued in February 2017 rendering the issuance of work permits subject to the authentication of rent contracts on the Ejar network. Officially launched on 12 February 2018, the Ejar network now supports authorised real estate middlemen tasked with the authentication work required by the new regulations.
Ejar.com – 14 September 2018
Amendment to anti-corruption law drops statute of limitations
A 60-day statute of limitations for investigating graft allegations against former and current ministers has been removed from an anti-corruption law under a recent amendment. The amendment will render the National Anti-Corruption Commission capable of efficiently protecting public money and the state's interests as elucidated by Khalid bin Abdul Mohsen Al-Muhaisen, the commission's chairman. These reforms come after last November saw the detainment of numerous prominent businessmen, including Prince Alwaleed bin Talal, as part of a widespread effort to tackle corruption. A cause of considerable unrest for Saudi and international investors, the move led to the acquisition of US$100 billion in seizures and financial settlements with the detained businessmen.
Business Insider – 25 September 2018
The CMA Financial Technology Experimental Permit open for second batch of applications
With the FinTech boom in full swing throughout the global market, the Capital Markets Authority is seeking to promote the growth of the industry within the Kingdom with a second batch of applications for the FinTech ExPermit open from 15 October 2018. Applications will close on 15 December 2018, offering two months for companies to register to the permit. This announcement comes as a continuation of the first batch of applications, with the CMA accepting applications in February of this year, and the FinTech ExPermit being granted on 10 July 2018 to two applicants to create equity crowdfunding platforms.
Capital Markets Authority – 7 October 2018
Kingdom opens up four more areas for foreign investment
SAGIA's colloquially named "Negatives List" enumerates the activities in which a foreign company is prohibited from investing. These activities typically involve national resources, culture, or national security issues. On 23 October 2018, the Council of Ministers stated it will remove ground transportation, real estate brokerage, audio-visual services, and expatriate worker recruitment offices from the Negatives List, in order to allow investment in areas that had hitherto been closed to foreigners.
In relation to audio-visual services, this move comes on the heels of the decision to allow cinemas in the Kingdom and presents another opportunity for foreign investment in Saudi Arabia's burgeoning entertainment industry.
The Saudi Gazette – 23 October 2018
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