Regional tensions have not hurt foreign investment in Kingdom, says Saudi deputy economy minister

MIAMI: Despite the geopolitical tensions in the Middle East, especially in recent months, the number of foreign companies investing in the Kingdom has been “increasing on a daily basis,” the Saudi deputy minister of economic affairs told the Future Investment Initiative Priority Summit in Miami on Thursday.

Saad Alshahrani said that geopolitical uncertainty is not new to the region and so “there is always a risk, but the good thing is when you have a mitigation plan or management for any risk, then you can go through it easily.”

He added that authorities have not noticed any decline in interest among investors about opportunities in Saudi Arabia and, in fact, demand for such opportunities is increasing, with growth in both foreign direct investment and local investment.

“In 2022, we grew by 30 percent compared to the previous year,” Alshahrani said. “Even in 2023 … we have about 15 to 20 percent growth in GFCF (gross fixed capital formation) investment, FDI is growing by 20 percent, so we have not noticed anything impacting the plan of investment in Saudi Arabia.”

Regarding the measures taken to protect investors’ money, he said the Kingdom has “excellent regulations” in place.

“The investment law that will be announced in a few months will (offer) an excellent idea of how investors can have peace of mind when they bring their money to Saudi Arabia,” Alshahrani said.

“Since 2016 … we have launched more than 650 reforms (in) regulations, in the interests of investors when they come to Saudi Arabia.”

Authorities in the country will “provide whatever it takes to attract investors to certain projects and certain sectors that we think will be the drivers for growth going forward until 2030 and beyond,” he added.

Regarding incentives, Alshahrani said foreign investors can take advantage of tax exemptions when it comes to value-added tax, corporate income tax, and customs.

“At the same time, we provide some attractive land programs to investors so they can come and provide us with their ideas,” he added.

“The priority is to bring big companies so they can invest in manufacturing, build the local content and export these products overseas. So we provide … three years of tax exemptions, we provide lands.”

The need to diversify the Saudi economy and reduce its reliance on oil revenues, one of the main aims of Vision 2030, has been a key driver of the focus on investments in the manufacturing industry and technology sector, Alshahrani said. The Kingdom is also committed to playing a leading role in the development of artificial intelligence, he added.

“Two years ago, there was an announcement of a semiconductors program, to localize it in Saudi Arabia and make sure that you start building infrastructure for it and export overseas,” he said.

“So, we had also signed some agreements and deals with China, for example, on semiconductor chips.”

Investment in AI as a way to improve sustainability and productivity is “the way to go forward,” Alshahrani said.

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