Saudi Arabia attracts $18.3b foreign investment in 2006

JEDDAH — There has been a remarkable increase in foreign direct investment (FDI) in Saudi Arabia, according to the Saudi Arabian General Investments Authority (Sagia).

By Habib Shaikh

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Published: Wed 8 Aug 2007, 8:44 AM

Last updated: Sat 4 Apr 2015, 9:20 PM

"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 Press statement issued in Riyadh recently, which was made available to Khaleej Times here.

Al Awad said that the investments from countries other than the US, Japan and EU have rose from 38 per cent in 2000 to 47 per cent in 2006.

"The volume of foreign investments in 2006 is estimated at $18.293 billion (SR68.6 billion), a 51 per cent growth compared to 2005 while the volume of the domestic investments amounted to about $33.333b (SR125b) in the same year registering a growth rate of 9 per cent against the previous year," Awad Al Awad, undersecretary of the Sagia governor said in Press statement made available to The Business Times here on Wednesday.

Al Awad said that Sagia has been periodically evaluating the investment environment in the kingdom and conducting the required studies and researches for the development of the investments in cooperation with the local and international research centres including the World Bank.

"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 stressing that the largest portion of foreign investments were directed to the energy and energy related industries last year..

Al Awad added that the decision of the Ministry of Commerce and Industry to reduce the establishment cost of new companies will positively contribute to the increase in the number of investment companies in the country, and will lead to doubling the local investments, notably the small and medium projects as well as in industries based on technology.

In a related development, foreigners will now be able to invest in such a sectors as insurance services, wholesale and retail trade, air and train transport, and communication services in Saudi Arabia following 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, which is chaired by Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz.

Al Tuwaijeri said that the SEC opened new economic sectors for foreign investment in line with King Abdullah's reforms aimed at strengthening the economy, attracting more foreign investment and enhancing private sector participation.

The negative list of investment was also revised to comply with Saudi Arabia's commitments under the regulations and conditions of the World Trade Organisation (WTO). The Kingdom became the 149th member of the WTO in December 2005.

The new negative list excludes distribution services, wholesale and retail trade including medical retail services and private pharmacies .

"Also commercial agencies, except franchise rights listed at 8929 by international industrial classifications are now open for foreign investment," Al Tuwaijeri said.

Other sectors open to foreign investment are: distribution of cinema films and videocassettes transportation of passengers inside cities by train, air transportation services and satellite transmission services.

The Kingdom continues to ban foreign investment in sectors such as oil exploration, drilling and production.

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