Saudi Arabia has reported record-high foreign investor licences in the fourth quarter of 2020 as the kingdom looks to attract more investment from abroad.
The Ministry of Investment of Saudi Arabia (MISA) said in comments published by Saudi Press Agency that it recorded 466 registered licences, the highest on record since data began in 2005.
The figure represented a 52 percent rise compared to the previous quarter and a 60 percent increase over the same period in 2019. December witnessed the highest number of licences awarded at 189.
The results indicate a continued rebound in foreign direct investment (FDI) that began in June as the kingdom moved to boost economic activity and relax some lockdown measures imposed during the start of the coronavirus pandemic.
Saudi Arabia’s annual results also suggest growth across its investment environment may be returning to pre-Covid levels with a total of 1,278 new foreign companies obtaining licences in 2020, a 13 percent increase relative to 2019 and a 73 percent increase from the number seen in 2018.
Industrial and manufacturing, logistics, retail, e-commerce and ICT were among leading industries that attracted FDI in Q4 2020, as non-oil sectors showed momentum.
The announcement came as MISA released its latest report, which highlighted reforms including the Labour Reform Initiative (LRI), which ensures increased protection and mobility for foreign employees and a new Chambers of Commerce regulation that allows foreign investors to become board members of Saudi Chambers.
Khalid Al Falih, Minister of Investment of Saudi Arabia, (pictured above) said: “These figures indicate that the Saudi economy is maintaining resilience despite current challenging market conditions. It presents strong evidence that we can continue forward with determination and optimism.
“Saudi Arabia is launching its National Investment Strategy this year. As the world reopens, we are reiterating our commitment to providing investors with opportunities and support they need to identify and take advantage of emerging opportunities.”
He added: “This quarter’s results indicate that the growth of non-oil sectors is gaining momentum and Vision 2030 policies, such as digitisation and infrastructure development, are having a positive, tangible impact. Investors remain confident in the long-term Saudi opportunity – demonstrated by the fact a diverse range of global markets, such as the US, UK, Egypt, and India and sectors are represented in these latest quarterly figures.”
The report also revealed that FDI inflows into Saudi Arabia reached almost $1.9 billion in Q4, with a growth of 80 percent compared to the same period in 2019, and indicated an increase of nearly 20 percent for the entire year of 2020 at $5.5 billion.
The report also said that real GDP recovery is gaining pace, with official data showing a 5.9 percent quarter-on-quarter growth in Q4.
The report’s findings correspond with trends indicated by recent UNCTAD data, which reported FDI into the Saudi economy would increase in 2020 despite a dramatic drop in global FDI.
In February, Saudi Arabia announced it is increasing pressure on international firms to shift their Middle East hubs to the kingdom.
Starting on January 1, 2024, the Saudi government and state-backed institutions will stop signing contracts with foreign companies that base their Middle East headquarters in any other country in the region.
The decision is the latest measure designed to encourage firms to beef up their presence in Saudi Arabia’s capital of Riyadh, supporting a broader plan to diversify the economy of the world’s largest crude exporter.
Follow us on
