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Saudi Arabia: Consumer Protection Standing Committee Holds First Meeting with Introduction of VAT

The Consumer Protection Standing Committee meeting in Riyadh on Thursday. Asharq Al-Awsat Arabic
The Consumer Protection Standing Committee meeting in Riyadh on Thursday. Asharq Al-Awsat Arabic
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Saudi Arabia: Consumer Protection Standing Committee Holds First Meeting with Introduction of VAT

The Consumer Protection Standing Committee meeting in Riyadh on Thursday. Asharq Al-Awsat Arabic
The Consumer Protection Standing Committee meeting in Riyadh on Thursday. Asharq Al-Awsat Arabic

As Saudi Arabia begins next Monday to apply the Value Added Tax (VAT), regulators in the trade and consumer protection sectors have prepared to counter any price manipulation or inflate of purchase bills under the pretext of VAT.

The kingdom is willing to apply the lowest value VAT, five percent, and General Authority of Zakat and Tax will be in charge of managing and applying VAT in the country, in cooperation with relevant parties.

In this regards, Consumers Protection Association (CPA) held on Thursday its first meeting, chaired by Commerce and Investment Minister and Chairman of Consumer Protection Standing Committee Majid al-Qasabi.

Qasabi stressed the importance of joining efforts to reinforce consumer protection, coordinating, and conducting preliminary field plans to maintain consumer rights.

The Consumer Protection Standing Committee includes: Ministry of Municipal and Rural Affairs, Ministry of Health, General Authority for Tourism and National Heritage, Ministry of Interior, Ministry of Commerce and Investment, Ministry of Education, Ministry of Transport, Minister of Energy, Industry and Natural Resources, Ministry of Finance, Ministry of Environment, Water and Agriculture, Ministry of Labor and Social Development, General Authority of Zakat and Tax, Electricity & Co-Generation Regulatory Authority, Consumers Protection Association, General Authority for Competition, General Authority for Statistics and Communications and Information Technology Commission.

General Authority of Zakat and Tax underscored that tax-registered establishments should abide by the VAT in their bills in order to increase levels of compliance with the tax. It warned that any un-registered establishment that issues a tax invoice will be fined a maximum of USD26.600.

The authority called on establishments to adopt a clear bill that determines the goods and services excluded from VAT.

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Business

Oman Launches $5B Investment Fund to Diversify Economy

A general view of Muscat, Oman. (AP)
A general view of Muscat, Oman. (AP)
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Oman Launches $5B Investment Fund to Diversify Economy

A general view of Muscat, Oman. (AP)
A general view of Muscat, Oman. (AP)

Oman plans to launch a $5 billion public investment fund to support plans to overhaul the economy in the Gulf Arab nation over the next two decades, state media reported Wednesday.

The Oman Future Fund will aim to increase economic activity and support the private sector as the country looks to reduce its reliance on oil.

State media said Sultan Haitham bin Tariq Al Said approved the new fund, which would launch with 2 million riyals, or around $5.2 billion. It would support the country's Vision 2040 plans to grow and diversify the economy.

The Oman Investment Authority was established in 2020 and incorporated an earlier fund dating back to 1980.

Business

Saudi Retail Market Expected to Reach $176 billion in 2026

A man walks in a shop in Jizan, southern Saudi Arabia (Asharq Al-Awsat)
A man walks in a shop in Jizan, southern Saudi Arabia (Asharq Al-Awsat)
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Saudi Retail Market Expected to Reach $176 billion in 2026

A man walks in a shop in Jizan, southern Saudi Arabia (Asharq Al-Awsat)
A man walks in a shop in Jizan, southern Saudi Arabia (Asharq Al-Awsat)

A newly released report predicted an increase in the size of the retail trade market in Saudi Arabia to reach SAR 661.1 billion ($176.5 billion) by 2026.

The report noted that the value of e-commerce in the country witnessed steady growth over the past years by 18.24 percent.

According to the report issued by the G World company, which is specialized in studies and sectors analysis, retail trade sales increased to SAR 16 billion ($4.2 billion) in 2017, while the value of sales in 2022 reached more than SAR 37 billion ($9.8 billion), as many merchants have turned to modern retail.

Per capita gross domestic product at current prices increased to SAR 29,000 ($7,700) during the second quarter of the previous year compared to SAR 20,000 ($5,300) in the same period in 2021, the report stated.

Purchases through e-commerce sites increased in the kingdom, the report underlined, noting that the total number of users reached 22 million, at an annual rate of 2.7 percent in 2022.

Meshaal Alshammari, Director of Marketing at Lean Node software development company, said: “The biggest challenge facing the modern retail sector is coordination between daily operations and data follow-up, for both the technical and traditional sides.”

He explained: “Every company must put in place the necessary and basic resources to cover the gaps and guarantee a healthy expansion.”

During a recent lecture organized by the Riyadh Chamber, Alshammari noted that some resources were yet to be exploited in the best possible ways, stressing that the current corporate structure was not ideal to reach sustainability.

“Entrepreneurs find it difficult to obtain capital and launch products quickly and efficiently,” he said, pointing to the presence of a large gap in the Saudi financial technology companies sector.

There are only 147 financial technology companies operating in Saudi Arabia, compared to 1,900 companies in Britain, he remarked.

Mohammad Abu Alsaud, general manager of Paytabs, told Asharq Al-Awsat that one of the means to help entrepreneurs was to resort to qualitative companies in the field of e-commerce.

He stressed that the biggest challenge facing emerging merchants is “their neglect of the feasibility study and its method of operation.”

Business

Saudi Real Estate Refinancing Co. Issues $933 Million in Sukuk

Saudi Arabia’s housing project is part of government’s plans to raise the rate of citizens’ real estate ownership. (Asharq Al-Awsat)
Saudi Arabia’s housing project is part of government’s plans to raise the rate of citizens’ real estate ownership. (Asharq Al-Awsat)
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Saudi Real Estate Refinancing Co. Issues $933 Million in Sukuk

Saudi Arabia’s housing project is part of government’s plans to raise the rate of citizens’ real estate ownership. (Asharq Al-Awsat)
Saudi Arabia’s housing project is part of government’s plans to raise the rate of citizens’ real estate ownership. (Asharq Al-Awsat)

The Saudi Real Estate Refinance Co. announced the issuance of SR3.5 billion ($933 million) in sukuk, within the local sukuk program that amounts to SR20 billion ($5.3 billion).

CEO Fabrice Susini said the real estate finance company would keep boosting market liquidity and assisting lenders and investors, which would stabilize the Saudi mortgage market.

“The positive response from investors to SRC’s latest sukuk issuance is a clear testament to the strength of the Kingdom’s housing market and economy,” he remarked.

Susini continued: “As SRC continues to refinance existing financings for financiers, we are proud to contribute to developing a robust secondary home financing market that supports the efficiency and stability of the primary housing market.”

Majed Al-Hogail, Saudi Minister of Municipal and Rural Affairs and Housing, said real estate financing in the country exceeded $194 billion until the end of the first quarter of 2023.

Earlier this month, SRC received an “A-” classification at the level of global credit and “ksaAAA” at the level of local credit with a stable outlook from the credit rating agency S&P Global.

The Public Investment Fund (PIF) established the SRC in 2017 to be a major pillar and catalyst for the growth and sustainability of residential real estate financing in the country.

SRC’s primary role is to provide banks and real estate finance companies with liquidity, enabling growth in the home financing sector to increase homeownership rates among Saudi citizens.

The SRC stated that it contributed to raising the percentage of citizens’ home ownership from 47 to 60 percent. Since its establishment in 2017, the company has witnessed strong growth in its business and partnerships in the real estate financing sector, as part of the various initiatives and programs within the objectives of Vision 2030.

Business

UAE Launches Global EV Market

An electric car displayed by Dubai Police during the Arabian Travel Market exhibition earlier in May (WAM)
An electric car displayed by Dubai Police during the Arabian Travel Market exhibition earlier in May (WAM)
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UAE Launches Global EV Market

An electric car displayed by Dubai Police during the Arabian Travel Market exhibition earlier in May (WAM)
An electric car displayed by Dubai Police during the Arabian Travel Market exhibition earlier in May (WAM)

The UAE launched the Global EV Market, a transformational project under the performance agreements signed by federal authorities, which enhances its competitiveness in a sector that is one of the future transformational projects.

Minister of Energy and Infrastructure, Suhail al-Mazrouei, said the new market comprises a comprehensive plan and an ambitious national program to integrate the energy and infrastructure sectors and align the work of federal and local government entities and private sector businesses.

- National roadmap

The minister explained that the Ministry of Energy and Infrastructure (MoEI) launched the UAE Roadmap for Electric Vehicles as a comprehensive action plan that involves developing guides and policies.

The roadmap offers government incentives and sets ambitious strategies to integrate the work of federal and local government entities and the private sector to promote the adoption of electric vehicles in the UAE.

MoEI also launched the National Platform for Electric Vehicles' Chargers, a mobile app to link users and a guide for installing electric vehicle charging stations to unify their specifications nationwide and align them with world-class standards.

"We seek to create a conducive environment for the growth of the EV market in the UAE through policy levers for investment and socio-economic and environmental incentive schemes. To support the shift to green mobility, we aim to increase the share of EVs to 50% of total vehicles on our roads by 2050."

- Agreements

The Ministry signed several cooperation agreements to support the Global EV Market transformational project, through which the partners would cooperate to create incentives for people to own EVs.

They also aim to facilitate investment in the UAE network of electric vehicle charging stations and install them across federal buildings and roads and MoEI's truck rest stops.

The private sector partners will play a key role in promoting EVs.

They will invest in establishing EV charging stations and operating them, and setting up EV service centers across the country to offer dedicated services to EV owners.

- 700 EV chargers

For his part, the Undersecretary for Infrastructure and Transport Affairs at MoEI, Hassan al-Mansouri, indicated that the project includes a national interactive platform that provides more than 700 EV chargers nationwide.

Furthermore, Undersecretary for Energy and Petroleum Affairs at MoEI, Sharif al-Olama, said the UAE has clear targets for the transport sector, including the green mobility program, which aims to increase the share of electric cars and electric buses and create a mix of options for trucks.

It aims to reduce energy consumption by 40 percent by 2050, per the objectives of the transport sector's National Demand Side Management Program.

According to unofficial data, the number of electric vehicles in the UAE has reached more than 5,100, and it aims to reach 42,000 EVs by 2030.

Business

Bahrain Inaugurates $1 Bn Power Station, Generating 1,500 MW

Bahraini Crown Prince Salman bin Hamad Al Khalifa during the inauguration of the station (Asharq Al-Awsat)
Bahraini Crown Prince Salman bin Hamad Al Khalifa during the inauguration of the station (Asharq Al-Awsat)
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Bahrain Inaugurates $1 Bn Power Station, Generating 1,500 MW

Bahraini Crown Prince Salman bin Hamad Al Khalifa during the inauguration of the station (Asharq Al-Awsat)
Bahraini Crown Prince Salman bin Hamad Al Khalifa during the inauguration of the station (Asharq Al-Awsat)

Bahrain's Crown Prince Salman bin Hamad Al Khalifa stressed the importance of development projects that provide quality services to Bahraini citizens and create world-class electricity and water infrastructure.

The Crown Prince emphasized Bahrain's commitment to enhancing energy efficiency and expanding electricity and water production capacity with programs and priorities that consolidate development.

Prince Salman bin Hamad inaugurated the al-Dur 2 Phase 2 Independent Water and Power Project (IWPP), an extension of al-Dur Phase 1.

He stressed the Kingdom's commitment to adopting innovative programs that are high quality, meet efficiency standards, and contribute to the Kingdom's wide-ranging development goals and future energy-saving ambitions.

Prince Salman bin Hamad emphasized the keenness to enhance energy efficiency and raise the electricity and water production capacity in parallel with the program that aims to strengthen development and move it towards more developed areas.

He highlighted the significant role and efforts to bolster the electricity and water sector and ensure its sustainability to meet growing demand and achieve its far-reaching aspirations.

According to the Crown Prince, Bahrain is keen to keep pace with new development projects for all endeavors to face climate change, according to the highest international standards to achieve sustainable development goals.

For his part, the Electricity and Water Authority (EWA) Chairman, Kamal bin Ahmed Mohammed, affirmed that the authority is keen to achieve all broad development goals set by King Hamad bin Isa and supported by the Crown Prince.

The Chairman reiterated the EWA's commitment to its partnership with the private sector, ensuring the continuation of energy programs and plans that contribute to energy sustainability.

He highlighted the importance of meeting the growing electricity and water consumption demand considering the Kingdom's industrial, commercial, and urban expansion.

The official also reiterated EWA's commitment to providing improved services for citizens, residents, and investors to achieve the comprehensive development goals under Bahrain Economic Vision 2030.

During the inauguration, the Minister of Electricity and Water Affairs, Yasser Humaidan, said that the project is a qualitative leap in electricity and water production in Bahrain.

Humaidan declared that the project meets the highest international quality standards and will help to reduce carbon emissions and combat climate change to achieve sustainable development.

Furthermore, the Chairman of the Board of Directors of ACWA Power, Mohammed Abunayyan, explained that the project had achieved high efficiency in the construction and implementation stages according to the approved schedule and succeeded in applying sustainable energy concepts.

Al-Dur 2 Phase 2 Independent Water and Power Project (IWPP) is the first production station in the Kingdom connected to the high-voltage electricity transmission network of 400 KV.

The station cost over $1 billion and was established in partnership with companies from Bahrain, the Kingdom of Saudi Arabia, and Japan.

The IWPP generates 1,500 MW of electricity and processes 50 million gallons of desalinated water daily. It increases the Kingdom's production capacity to 5,044 MW of electricity and 204 million gallons of desalinated water daily.

Business

Egypt Seeks Bilateral Partnerships with BRICS

The Egyptian Minister of Finance, Mohamed Maait, with International Cooperation Minister Rania al-Mashat during meetings at the New Development Bank in China (Asharq Al-Awsat)
The Egyptian Minister of Finance, Mohamed Maait, with International Cooperation Minister Rania al-Mashat during meetings at the New Development Bank in China (Asharq Al-Awsat)
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Egypt Seeks Bilateral Partnerships with BRICS

The Egyptian Minister of Finance, Mohamed Maait, with International Cooperation Minister Rania al-Mashat during meetings at the New Development Bank in China (Asharq Al-Awsat)
The Egyptian Minister of Finance, Mohamed Maait, with International Cooperation Minister Rania al-Mashat during meetings at the New Development Bank in China (Asharq Al-Awsat)

Egypt is committed to strengthening cooperation with the New Development Bank and establishing bilateral and multilateral partnerships with BRICS countries, says Finance Minister Mohamed Maait.

Maait, the Governor of Egypt at the New Development Bank, added that the collaboration aims to strengthen solidarity among nations in addressing the current global economic challenges, which have significantly impacted developing countries.

The Minister spoke at the New Development Bank's Board of Governors meeting at the Shanghai, China headquarters.

Maait emphasized the importance of international development partners adopting more suitable programs to enhance the capabilities of emerging economies without imposing excessive financial burdens.

The top official noted that collaborating will strengthen solidarity among nations in addressing the current global economic challenges.

The Bank's significant financing capabilities and advanced international expertise contribute to a portfolio that promotes green growth, supports Egypt's development path in various sectors, and is aligned with Egypt's Vision 2030, said the Minister.

Maait also highlighted Egypt's commitment to diversifying funding sources to meet development needs and alleviate burdens while improving the standard of living and public services.

He said that Egypt is looking for international partners' support, including the New Development Bank, to complete its development journey and enhance its capabilities for green recovery by stimulating investments in environmentally friendly projects and creating financial space for developing countries to invest in infrastructure.

For her part, Minister of International Cooperation Rania al-Mashat said that Egypt's accession to the membership of the Bank enhances its efforts to promote development and achieve integration with emerging economies and developing countries to mobilize the necessary resources to finance infrastructure projects and sustainable development.

Mashat pointed out that Egypt's membership reflects the steps implemented to enhance international cooperation, development financing, and the creation of constructive partnerships with international institutions and multilateral development banks.

New Development Bank (NDB) is a Shanghai-based multilateral development bank established by Brazil, Russia, India, China, and South Africa (BRICS).

Since its inception, the Development Bank has approved over 90 financing projects worth $32 billion in transportation, water supply, clean energy, digital and social infrastructure, and construction.

The Bank supports sustainable development and enhances regional cooperation and integration by investing mainly in infrastructure. It expanded its operations to include the health and social infrastructure, considering the negative economic impact of the COVID-19 pandemic on the global economy.

In 2012, BRICS countries agreed to establish the Bank with a capital of $100 billion during their fourth summit in New Delhi.

Business

Turkish Lira Trades Near Record Low Against Dollar

Pedestrians walk next to Karakoy ferry terminal as the sun sets behind Suleymaniye mosque, background, in Istanbul, Türkiye, Wednesday, Feb. 22, 2023. (AP)
Pedestrians walk next to Karakoy ferry terminal as the sun sets behind Suleymaniye mosque, background, in Istanbul, Türkiye, Wednesday, Feb. 22, 2023. (AP)
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Turkish Lira Trades Near Record Low Against Dollar

Pedestrians walk next to Karakoy ferry terminal as the sun sets behind Suleymaniye mosque, background, in Istanbul, Türkiye, Wednesday, Feb. 22, 2023. (AP)
Pedestrians walk next to Karakoy ferry terminal as the sun sets behind Suleymaniye mosque, background, in Istanbul, Türkiye, Wednesday, Feb. 22, 2023. (AP)

Türkiye’s lira tumbled on Wednesday to a fresh record low against the dollar as President Recep Tayyip Erdogan prepared to decide the shape of his new cabinet and the direction of economic policy after an election triumph. 

In its third successive day of losses, the lira weakened nearly 1.5% to a record of 20.75 against the US currency, taking its losses this year to nearly 10%. 

Investors have been concerned about the sustainability of Türkiye’s unorthodox economic policies as it followed a low-rate program championed by Erdogan. 

The focus is now on whom he will appoint to top economic policymaking roles and if there will be a course change towards economic orthodoxy. 

A meeting this week between Erdogan and Mehmet Simsek, a former economy chief respected by investors for his orthodox policy credentials, fueled speculation over a possible pivot to more conventional policies. 

"I don't know whether he will be the new finance minister or not, but any credible name is important to give a signal to the market that there will be change. Action speaks more than intention," said Cagri Kutman of KNG Securities. 

"If you have Mehmet Simsek or a similar person in charge that is a big move. But then the market will be curious about the first move of the economic team – will there be more orthodox policies or will they do something worse or will they do something to buy time and see how it goes?" 

First-quarter economic growth stayed buoyant despite the impact of southern earthquakes, high inflation and a cost of living crisis. 

Türkiye’s economy expanded 4.0% in the first quarter of the year, just above expectations, official data showed on Wednesday, despite the impact of February's earthquakes that killed more than 50,000 and left millions homeless. 

First-quarter gross domestic product (GDP) grew 0.3% from the previous quarter on a seasonally and calendar-adjusted basis, data from the Turkish Statistical Institute showed. 

A Reuters poll forecast the economy to have expanded 3.9% in the first quarter, with growth of 2.8% in 2023.

Business

PetroBangla Sign 15 Year Deal with QatarEnergy to Buy LNG

QatarEnergy offshore gas field (QatarEnergy website)
QatarEnergy offshore gas field (QatarEnergy website)
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PetroBangla Sign 15 Year Deal with QatarEnergy to Buy LNG

QatarEnergy offshore gas field (QatarEnergy website)
QatarEnergy offshore gas field (QatarEnergy website)

Bangladesh's state-owned gas company PetroBangla will sign a 15-year deal with QatarEnergy on Thursday to buy two million tons of liquefied natural gas (LNG) annually.

PetroBangla chairman Zanendra Nath Sarker said on Tuesday, "Under the new deal with Qatar, the LNG will be supplied from January 2026," according to Reuters.

Reuters reported on Tuesday that QatarEnergy would sign a long-term LNG supply deal with an Asian entity.

The agreement will be one of many to come in 2023 as state-owned QatarEnergy secures sales for its mega expansion of North Field, a source with direct knowledge of the new contract agreement, who did not wish to be identified, said.

Qatar is the world's top LNG exporter, and competition for LNG has ramped up since the start of the Ukraine war, with Europe, in particular, needing vast amounts to help replace Russian pipeline gas that used to make up almost 40 percent of the continent's imports.

But Asia has been far ahead in securing gas from Qatar's massive production expansion project.

The contract will be QatarEnergy's second to Asia since it started selling the gas expected to come onstream from the North Field expansion project.

The two-phase expansion plan will raise Qatar's liquefaction capacity to 126 million tons annually by 2027 from 77 million.

Qatar's first Asian deal with Sinopec, the longest to be signed at 27 years for the supply of four million tons a year, was followed by the state-owned Chinese company taking a five percent stake in the equivalent of one North Field East LNG train.

QatarEnergy's sales and purchase agreements to supply Germany with around two million tons of LNG annually through a partnership with ConocoPhillips cover at least 15 years.

The North Field expansion project will help guarantee long-term supplies of gas globally. North Field is part of the world's biggest gas field that Qatar shares with Iran, which calls its share South Pars.

QatarEnergy chief Saad al-Kaabi said last week there was significant demand for LNG and that by the end of the year, he expects to have signed supply deals for all the gas expected to come on stream from the North Field expansion.

Business

Saudi Arabia, Japan Sign Agreement for Transmission Systems in Neom

Saudi and Japanese delegations signing an agreement for transmission systems in Neom (Asharq Al-Awsat)
Saudi and Japanese delegations signing an agreement for transmission systems in Neom (Asharq Al-Awsat)
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Saudi Arabia, Japan Sign Agreement for Transmission Systems in Neom

Saudi and Japanese delegations signing an agreement for transmission systems in Neom (Asharq Al-Awsat)
Saudi and Japanese delegations signing an agreement for transmission systems in Neom (Asharq Al-Awsat)

The Saudi Electricity Company (SEC) signed an agreement with Japan's Hitachi Energy agreement and Saudi Services for Electromechanical Works (SSEM) to supply three high-voltage direct current (HVDC) transmission systems to ENOWA, the utility company for NEOM in Northwest Saudi Arabia.

The agreement will provide one of the world's first 3 GW, 525 kilovolts (kV) HVDC Light transmission systems connecting Oxagon, NEOM's regional development, with the larger Yanbu area more than 650 kilometers away in Western Saudi Arabia.

- Construction and installation

Under the auspices and supervision of the Saudi Ministry of Energy, ENOWA organized the signing ceremony of the agreement, under which Hitachi Energy's scope of supply includes design, engineering, procurement of HVDC technology, and commissioning of the HVDC Light converter stations.

According to the agreement, the SSEM will design and supply the AC equipment portion and perform the construction and installation.

The converter stations convert the power from AC to DC and then back to AC for integration into the receiving grid.

The converters will be sourced by and supplied to Saudi Electricity Company, which was contracted in 2022 by ENOWA to act as their EPCM to build this first HVDC system for NEOM.

- Energy storage

Hitachi Energy and ENOWA have signed an early works and capacity reservation agreement for two additional HVDC projects, each rated up to 3 GW.

Under this agreement, both companies commit to having the resources and capacity necessary to implement these two HVDC systems.

As part of a new scalable and modular regional network design targeted to seamlessly integrate future renewables and energy storage technologies in the NEOM Energy System, it is unique in size and complexity.

The cooperation will also explore opportunities to develop local competencies in the Kingdom, including ways to assemble the necessary HVDC Light components locally and sustainably.

The Managing Director of Hitachi Energy's Grid Integration business, Niklas Persson, said that the collaboration with ENOWA will power one of the most visionary development projects of all time.

Persson added that as the world progresses towards a more sustainable future, expertise, and HVDC technologies are true enablers of the electrification of the global energy system and the transition to renewables.

For his part, the Executive Director of Grid Technology & Projects, Energy of ENOWA, Thorsten Schwarz, indicated that by securing the first capacities for this vital part of the future network within just one year since the decision to use this technology was taken, "we show ENOWA's commitment to supporting Saudi Vision 2030 in collaboration with Saudi Electricity Company and Hitachi Energy."

- Sustainable economy

ENOWA seeks, by its commitment to renewable energy and efficient water management, to become a global reference for industry leaders and set a benchmark for sustainable economic circular systems worldwide.

ENOWA, NEOM's energy and water company, produces and delivers clean and sustainable energy for industrial and commercial applications.

The company benefits from NEOM's greenfield site and strategic location in northwestern Saudi Arabia, with abundant solar and wind resources.

ENOWA will act as a catalyst and incubator for developing new, sustainable energy and water businesses while creating a robust economic sector regionally.

ENOWA is the principal shareholder in the world's largest green hydrogen production plant set to be commissioned in 2026 and will enable NEOM to be a global green hydrogen hub.

The region is designed to be a blueprint for sustainable urban living with minimal environmental impact and enhanced livability.

Business

Saudi Arabia Grants Licenses for Establishment of 4 Economic Zones

Minister of Investment Eng. Khaled Al-Falih addresses the Saudi Special Economic Zones Investment Forum on Monday. (Asharq Al-Awsat)
Minister of Investment Eng. Khaled Al-Falih addresses the Saudi Special Economic Zones Investment Forum on Monday. (Asharq Al-Awsat)
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Saudi Arabia Grants Licenses for Establishment of 4 Economic Zones

Minister of Investment Eng. Khaled Al-Falih addresses the Saudi Special Economic Zones Investment Forum on Monday. (Asharq Al-Awsat)
Minister of Investment Eng. Khaled Al-Falih addresses the Saudi Special Economic Zones Investment Forum on Monday. (Asharq Al-Awsat)

The Saudi government is seeking to develop special economic zones based on modern and innovative designs, with the aim to attract foreign direct investments and shape the future of regional and global markets.

Ministers, officials, and local and international experts attended the launch of the Saudi Special Economic Zones Investment Forum on Monday, which saw the announcement of new investment deals exceeding 27 billion riyals ($7.2 billion).

Hosted by the Economic Cities and Special Zones Authority (ECZA), in partnership with the Saudi Program for Attracting Regional Headquarters of International Companies, the forum witnessed extensive sessions that highlighted Saudi Arabia’s position as a future investment destination and the importance of special economic zones in diversifying the country’s sources of income.

During the event, licenses for the establishment of four Special Economic Zones (SEZs) were awarded to the King Abdullah Economic City’ (KAEC) SEZ, Ras Al-Khair SEZ , Jazan SEZ, and Cloud Computing SEZ.

Eng. Khaled Al-Falih, Minister of Investment, said the Saudi government concluded in 2022 deals for the private sector worth 285 billion riyals ($76 billion) in various fields, including cars, information and communication technology, agriculture and space, as well as petrochemicals, mining and renewable energy.

He revealed that the investment sector in Saudi Arabia grew by 31 percent during 2022, to exceed one trillion riyals ($266.6 billion), for the first time in the history of the Kingdom.

The minister underlined that the social, economic and commercial indicators have proven the extent of investor confidence in the Saudi infrastructure. He added that the new special economic zones were designed based on a futuristic and innovative outlook, with a focus on attracting foreign direct investment and maximizing opportunities for major industries.

Minister of Finance Mohammed Al-Jadaan stated that the economic zones help achieve sustainable development and contribute to attracting investments and generating job opportunities.

He added that the economic cities would benefit from Saudi Arabia’s strategic location to establish new clusters of companies across the main growth sectors, which would contribute in shaping the future of regional and global markets.

According to Al-Jadaan, the special zones target specific investors in certain sectors to reduce competition between the primary economy and the special economic cities.

Bandar AlKhorayef, Minister of Industry and Mineral Resources, said the private economic zones in Saudi Arabia would greatly benefit the local economy, as they are an important component of economic diversification.

He stressed that the zones would serve re-export products and help create a large commercial movement in the next stage.

AlKhorayef revealed that the private economic zones focus on various industries related to ship manufacturing, mining and renewable energy industries, to promote investments that help expand services and create added value.

Meanwhile, Nabil Khoja, Secretary General of ECZA, told Asharq Al-Awsat that the volume of investments in the special economic zones in the coming period would top 116 billion riyals ($30.9 billion), given the efforts made to achieve the targets set to support the foundations of the Saudi economy.

Khoja predicted an influx of more investments in the coming phase, noting that each economic zone was characterized by qualitative industries and provided a package of incentives and enablers.

The forum discussed the opportunities offered by the special economic zones and the promising growth potential they provide to investors around the world.

Talks also touched on key topics that dealt with Saudi Arabia’s strengths, including the supportive and competitive regulatory environment, the strategic geographical location that boosts the country’s position as a vital center for supply chains and logistics services, and the advanced digital infrastructure capable of supporting ICT companies and the global cloud computing system.

The forum reviewed the latest developments in the Saudi program that focuses on attracting regional headquarters of international companies.

Some of the most important advantages offered by the special economic zones in Saudi Arabia include competitive tax rates and exemption from customs duties on imports, production inputs, machinery and raw materials.