The Ministry of Investment of Saudi Arabia (MISA) has reported 348 new international companies were granted licenses to operate in the Saudi market in the first quarter (Q1) of 2020 in its latest Investment Highlights report.
This marks a 19 percent increase compared to the same period in 2019, and a 20 percent quarter-on-quarter increase from the final three months of 2019. Month-to-month growth began to slow in March as global markets reacted to the impact of the Covid-19 pandemic.
In this special edition of the quarterly report, the ministry also charts Saudi Arabia’s national response to the Coronavirus pandemic, alongside the Kingdom’s global response as the holder of the G20 presidency. The report places focus on the measures introduced across the government to support the business community and how Saudi Arabia’s local and international investors are playing a leading role in navigating the pandemic’s economic and societal challenges.
Khalid Al Falih, Minister of Investment of Saudi Arabia (MISA), said: “The first quarter of 2020 was Saudi Arabia’s strongest period for investor interest in ten years. However, the economic effects of Covid-19 began to be felt worldwide towards the end of this period, and this becomes evident when we compare the rate of new investment on a month-by-month basis. January and February saw strong momentum, but growth began to slow in March.
“As we look toward a post-Covid-19 future, this is a reassuring show of confidence from the world’s investors in the Kingdom’s long-term prospects as an attractive investment destination.”
Major sources of new foreign investment at the beginning of 2020 continued to represent a diverse range of global markets and sectors. As in 2019, growth came from long-standing strategic partners such as the US and UK, with 37 US companies and 32 UK companies awarded licenses in Q1 2020. Quarter-to-quarter sector growth was also seen across a selection of emerging industries, such as ICT, retail and e-commerce, and tourism, culture, and entertainment.
“Investors are the most important enablers of Saudi Arabia’s ongoing transformation through Vision 2030, and in recognition of this MISA has been tasked with safeguarding the stability and security of the Kingdom’s full investment ecosystem,” Al Falih continued.
“This is the central aim of our Covid-19 business continuity initiatives. By acting swiftly, MISA has been able to have a direct impact through our Covid-19 Response Center (MCRC). We have spoken to investors about how and where they need support and taken their queries directly to our government partners, ensuring that the regulations needed for companies across vital sectors to continue to operate are put in place.”
Saudi government entities have implemented numerous stimulus packages and funding relief programs for the private sector worth $45 billion, aimed at helping the Kingdom’s local and international businesses, and citizens and residents, to mitigate both the immediate and long-term impacts of Covid-19.
Tailored support is accessible to companies and individuals across a variety of industries and scales, from SMEs through to multinationals. Measures range from tax exemptions and discounts or postponements on utilities, energy and labor costs to a wide selection of loans and income support.
Several deals signed since the beginning of the pandemic indicate that the global business community remains positive about the long-term potential and resilience of Saudi Arabia as an investment destination. New agreements include a joint-venture partnership between a Saudi company and South Korean petrochemicals firm and the announcement of a new shipping line connecting Saudi Arabia to East Africa.
The Minister concluded: “Saudi Arabia remains open for business. Investing in the global investor community, as they have invested in us, is at the forefront of how MISA is adapting our policies and regulations to support business continuity for local and international businesses as part of a unified national response to the pandemic.
“The Kingdom continues to develop investment opportunities in partnership with our local business ecosystem – with over 100 launched this week alone under our National Investment Promotion arm, Invest Saudi. We are confident that businesses will keep coming to the Kingdom as investor activity gains momentum and adapts to the post-Covid-19 era.”
TradeArabia News Service