INVESTMENTS

NUMBER OF ISSUED SAUDI INVESTMENT LICENSES RISE FOURFOLD

International and domestic investors continue to make a beeline to Saudi Arabia to set up businesses. The kingdom saw a 30.9% surge in new investment licenses, or 1,278 new permits in the fourth quarter of 2022, compared to the same period in 2021.

In total, the kingdom issued 16,000 new licenses during 2022, a 267.4% increase from the 4,000 licenses issued in 2021, latest data from the Ministry of Investment shows.

The sectors with the most issued licenses include construction, manufacturing, professional, scientific and technical services, wholesale and retail, ICT, and accommodation and food services, according to the Ministry of Investment (MISA).

The investment licenses issued for these activities constitute 78.5% of the total investment licenses issued in the fourth quarter of 2022. The licenses for construction activity grew by 3.6%, or 316 new licenses (23.5% of the total licenses in Q4 2022), compared to the same period in 2021.

Manufacturing was the next big sector, with 237 licenses in the fourth quarter alone, while professional, scientific and technical activities was the third most popular sector with 155 licenses during the period.

In a sign of Saudi Arabia emerging as a cultural hub, arts, entertainment and recreation saw the biggest growth in the fourth quarter with 19 licenses issued, a 280% jump over the same period the year before.

“Considering the legal status of the company, the licenses issued for limited liability companies (LLCs) amounted to 469 licenses in the fourth quarter,” the ministry stated, noting that the total number of LLCs in 2022 reached 11,000.

“The single-member limited liability company (SMLLC) recorded 626 licenses of total issued licenses, and a total of 4,000 licenses in 2022. The rest of licenses were distributed among other types of companies (1,000 of total issued licenses in 2022),” the ministry added.

Egypt was the largest originator of investment licenses issued during the period with 240 licenses, followed by Yemen with 187, India with 151, Syria with 123, and Pakistan with 100 licenses.

                  

MISA was also involved in building a robust legislative framework to create a competitive business environment and investment laws and procedures in the kingdom, which attracted domestic, regional and international investors.

A key effort was the launch of the Global Supply Chain Resilience Initiative last October to support and align supply chain objectives and key performance indicators of Saudi Vision 2030 programmes and national strategies.

“It aims to develop a unified strategy to attract strategic supply chains to Saudi Arabia and strengthen the kingdom's position as a major centre and vital link in global supply chains, in particular, in the dynamic and promising sectors of the Saudi economy, in which the kingdom has competitive and strategic advantages,” MISA said.

These include renewable energy sources, the automotive industry, chemicals, and medical devices.

An initiative focusing on the cost competitiveness of national building has been tasked with studying the current cost of establishing new factories, and proposing recommendations to boost the kingdom’s cost competitiveness.

Another key initiative undertaken by MISA is the programme to improve regulatory environment in the industrial sector, and a separate initiative to develop standards and processes for customs exemption for the industrial sector.

 

Mining was also a key focus for the kingdom, given its renewed importance in the global clean energy transition.

MISA has set its sights into increasing the attractiveness of investment in mining projects and value chain by easing logistics for the investor, in co-ordination with relevant authorities. In addition, it is also tasked with improving the local, regional and international connectivity of trade networks and transport by linking logistical mining platforms to the current railway and land bridgenetworks.

Another initiative pertaining to mining is to seek ways to boost investment in the sector in collaboration with various mining agencies and the Saudi Geological Survey

Meanwhile, another initiative looks at mining platform development, which aims to realise rapid achievement, raise the reliability of information, reduce time to provide all mining investment services, ensure ease of procedures, increase transparency, and protect investor rights.

“As the abundance of information and easy access to it will attract investors, they will also lead to a growth of investments in the mining sector,” MISA noted.

To create an efficient and accessible regulatory framework, MISA boosted its electronic services. E-services offered to investors through MISA surged 72.1% in the fourth quarter of 2022 to 30,000 services. The requests and queries recorded 8,000 requests, a growth of 110% compared to the same period of the previous year.