Saudi Arabia issues record 478 licenses in first quarter

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It was 0.6 percent in September, up from 0.3 percent in August, the General Authority of Statistics said today.
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  • In none of the quarters since 2005 has such a number of licenses been issued, according to Saudi investment ministry.
  • Manufacturing sector accounted for the bulk (114) of new licenses issued followed by e-commerce and construction (78 each).

DUBAI: Saudi Arabia has issue more foreign investor licenses during Q1 2021 than during any quarter since it started keeping records in 2005.

The Ministry of Investment of Saudi Arabia (MISA) said on Tuesday that the kingdom’s investment recovery has accelerated.

The issuance of 478 new licenses breaks the previous record, set as recently as Q4 2020, and marks a 2.6% 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, indicating a continued rebound in FDI, the ministry said in a statement.

As the G20 nation seeks to diversify its economy, the latest figures also show that 114 new licenses issued in Q1 2021 were for the manufacturing sector.

Data from the Ministry of Industry and Mineral Resources show that $4.7bn worth of industrial investments were made in the first quarter of 2021, more than four times higher than the same quarter in 2020.

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

Following a 2018 reform in the Kingdom that allowed for a first time the 100 percent foreign ownership of companies, 59 percent 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 ongoing across the Saudi investment environment.

Reforms profiled include “Shareek”, part of a $7.2 trillion investment program designed to provide solid support for the Saudi economy via financial, monetary, and regulatory means, as well as through asset investment over the next 10 years. As well as the “Made in Saudi” program to strengthen the private sector’s resilience and contribution to GDP, and the Private Sector Participation Law to accelerate private sector participation in infrastructure projects and the privatization of public sector assets.

Khalid Al Falih, Minister of Investment of Saudi Arabia, said: “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.”

The report’s findings correspond with trends indicated by UNCTAD’s World Investment Report 2021, published in June, which noted that FDI in Saudi Arabia remained robust, with inflows increasing to $5.5 billion and investments concentrating in financial services, retail, e-commerce and ICT.

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