Saudi Arabia issues highest-ever number of foreign investor licences in a single quarter

The Ministry of Investment of Saudi Arabia (MISA) reported today that it issued 478 new licenses in Q1 2021, the most number in a single quarter since records began in 2005.

It reported a 36 per cent annual increase in new licenses issued compared to Q1 2020, and the latest figure also marks a 2.6 per cent quarterly increase.

The first quarter of 2021 also recorded the fourth consecutive increase in the number of new foreign investment projects since the peak of the pandemic in Q2 2020.

The manufacturing sector led the way in Q1 2021, with 114 new licenses issued. Data from the Ministry of Industry and Mineral Resources show that $4.7bn worth of industrial investments were made in Q1 2021, more than four times higher than the same quarter in 2020.

The retail and e-commerce (78 licences), construction (78 licences), professional and scientific (62 licences) and ICT (41 licences) sectors also accounted for a significant proportion of growth.

#SaudiArabia’s economic performance in Q1 of 2021 highlighted one important theme: economic diversification.

Download the full Investment Highlights – Spring 2021 report: https://t.co/rd9rRVfk5A pic.twitter.com/CAfz99fgVJ

— INVEST SAUDI (@InvestSaudi) August 10, 2021

Following a 2018 reform in the kingdom that allowed 100 per cent foreign ownership of companies, 59 per cent of new investment projects in Q1 2021 were full foreign ownership, with the remainder being joint ventures with local investors.

The figures were revealed in MISA’s Spring 2021 Investment Highlights report which outlines the developments and pro-business reforms. These reforms include Shareek, part of a $7.2 trillion investment program designed to support the Saudi economy via financial, monetary, and regulatory means, as well as through asset investment over the next 10 years. Another programme, Made in Saudi, aims to strengthen the private sector’s resilience and contribution to GDP, while the Private Sector Participation Law is intended to accelerate private sector participation in infrastructure projects and the privatisation of public sector assets.

“These latest figures show that, despite the ongoing impact of the Covid-19 pandemic on the global economy, foreign investors continue to have great confidence in Saudi Arabia’s historic transformation journey under the guidance of Vision 2030,” said Khalid Al Falih, Minister of Investment of Saudi Arabia.

According to UNCTAD’s World Investment Report 2021, FDI in Saudi Arabia increased to $5.5bn with investments concentrated in financial services, retail, e-commerce and ICT.

“Despite common global challenges, more and more investors are starting businesses in the Kingdom, FDI inflow into Saudi Arabia is at its highest level since 2016 when Vision 2030 was launched, and global interest in Saudi financial assets traded on our Tadawul stock exchange continues to grow,” added Al Falih.

Starting 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.

Read: Saudi to only award government contracts to firms that have an HQ in the kingdom