The Saudi Arabian General Investment Authority (Sagia) has announced a 130% increase in FDI licences granted for the first quarter of 2018, compared with the same period last year.
Saudi Arabia has made further regulatory reforms in order to encourage more FDI, aiming to increase this from $8bn to $18.6bn in the coming years as part of Vision 2030, the reform package that is opening up the nation’s markets and diversifying them away from oil dependency.
For example, the application process for foreign investors has simplified, with waiting times for licences decreasing by about 50 hours, while the validity of licences has increased from one to five years, according to a recent press release from the Saudi ministry of justice.
Any licensed enterprise is now permitted to be wholly owned by a foreign investor, and more sectors have been opened to foreign investors for 100% ownership, including communications, railways, air services and film distribution.
The increase in licences this year is matched by a year-on-year increase in greenfield FDI to the country in the first half of 2018, according to fDi Markets. This rise should come as a relief since, in 2017, the country received its lowest number of greenfield FDI projects in a decade.
Indeed, greenfield investment from western Europe and the US fell to $144m and $457m, respectively, the smallest amount ever received by Saudi Arabia since fDi Markets began monitoring announced investments in 2003. The UN Conference on Trade and Development revealed that in 2016, FDI dropped dramatically from $7.5bn to $1.4bn.