Doing business internationally: Saudi Arabia

Posted on August 2, 2011

Saudi Arabia’s investment policy is aiming to diversify industrial activities so as to reduce reliance on oil and gas, to encourage local and foreign investors into various industries, to increase employment for the local population and to protect the environment. Opportunities are therefore increasing for foreign investors considering doing business in Saudi Arabia. There are many opportunities for UK based investment in the Middle East indeed thisis a growing field and one that often requires expert legal supervision.

Many UK firms have Partnerships with ones in Saudia Arabia, one of which is Manchester based Chinnery and Co Solicitors. It’s founded Stephen Chinnery says ‘Investment in Middle Eastern business is a growing market and one that requires specialist local knowledege, that is why Chinnery and Co have many collegues in it’s Saudi Arabian Partenership to guide business opportunities and help reduce the red tape’

On 11 December 2005 Saudi Arabia joined the World Trade Organisation, a step that furthered the aims of liberalising the economy. A consequence of WTO membership has been the introduction of legislation that increases the level of intellectual property protection. Patents are protected for ten years, with five year extensions on request, and apply to product or product by process. Protection for trademarks is provided by the Ministry of Commerce.

Other measures include the liberalisation of the power and telecommunications sectors to achieve a competitive market under an independent regulator. The basic customs tariff has gone down to 5%.

The Foreign Investment Law permits 100% foreign ownership of projects and allows foreign investors ownership of property required for carrying out the project. The law allows foreign investors to invest in all sectors of the economy except for a limited number of sectors that are included in the negative list.

The Foreign Investment Regulations govern the activities of all foreign individual investors and entities that have foreign participation. A foreign capital investment licence is required to invest in a Saudi company. The body responsible for issuing the licence is the Saudi Arabian General Investment Authority (SAGIA). This body aims to create a favourable environment for business, developing investment opportunities in priority sectors in the Saudi Arabian economy and providing a one stop shop for inward investment into the country. The SAGIA is currently involved in constructing four new economic cities that are intended to maximise investment potential and deliver benefits to businesses investing in Saudi Arabia.

Saudi Arabia’s industrial sector is engaged in oil refining, petrochemicals, steel, manufacturing, small scale light industry and new technology. The Royal Commission for Jubail and Yanbu was set up to develop two industrial cities to develop the hydrocarbon based and energy intensive industries and help the diversification away from oil and gas.

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Saudi Arabia to increase investment in ports

Posted on August 2, 2011

Jeddah, the largest port on the Red Sea is about to receive some healthy competition from its little brother, Dammam, in the Gulf of Oman on the east side of the country. Saudi Arabia announced on the 23rd of June that it would be spending up to $613USD (2.3billion Riyals) on all the ports in the nation with capacity in Dammam being raised.

The Saudi transport minister Jabara Al-Seraisry is quoted thus on arabnews.com. “All ports are subject now to expansion. We are investing now SR2.3B (US$613M ) for projects in all the ports and we always continue increasing, particularly the industrial ports in Yanbu and Jubail. The next budget will be coming in five or six months and we will see more projects.”

Manchester based solicitors Chinnery and Co are a forward thinking law firm who have been aware of growing opportunities in Riyadh and throughout the Middle East for some time. It is with this in mind that they have formed links within local government to assist many business clients who wish to make their way in foregin investment opportunities. 

Saudi Arabia now has 9 ports with over 200 docks. The largest port in the country, Jeddah, is also the biggest on the Red Sea. After the Red Sea Gateway terminal in 2009,  Jeddah now boasts a capacity of 5 million TEU (twenty foot equivalent unit).

Thanks to the new port expansions, commerce and trade will open up even more across the country with Dammam on the east experiencing a lift in capacity. Currently Dammam is at 1.5 million TEU and that is expected to double to 3 million with the new expansion plans.

Saudi Arabia is trying to diversify its way away from an oil only economy and these expansions will definitely help move it in that direction. Despite the global economic slowdown JIP’s (Jeddah Islamic Port) will see a five percent increase this year.

Aside from the investments into the ports, Saudi Arabia is undergoing a massive $400 billion USD infrastructure overhaul and are also dishing out $130 billion USD on social and various other projects. That’s over a trillion USD being spent in the country over the next five years on expansion. They are serious about getting things done.

“The intention is for the government to provide the land and the private sector to construct the project,” said Al-Seraisry. This spells a massive boom in residential construction, jobs and a shift of people and money closer to these ports where the jobs and money will be coming.

Where will your investment money be made. Contact Pacific Tycoon and let us set you on the path to take advantage of the expansion in Saudi Arabia and the rest of the world through container ownership.

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Eight good resasons to invest in Saudi Arabia

Posted on August 2, 2011

Extensive Area and Diversity of Geographic Regions
 The Kingdom is distinguished for the variety of investment opportunity in relation
 to the diversity of its geography. The Kingdom is home to thirteen provinces, each
- having its own investment rules accommodating its economic recourses, develo
 mental plans, and needs. The extensive area of the Kingdom and the diversity of
- its opportunities is also another reason for investment, since this gives the inve
 tor a chance to select the province that suits the commercial plan, products, and
 services.

Strength of the Saudi Economy
- The Kingdom is the largest oil exporter in the world thanks to the continued
demand for oil. It is also home to the largest oil reserve in the world, in addition to
 reserves or other natural resources. International standards show the strength of
 the local economy, and the credibility of the economic reform policies carried out
 by the Saudi government. Investment in Saudi buisnesses is it an alltime high, indeed many Legal Proffesionals offer services to guide UK and European investment in such ventures.

 Religion
 The Kingdom is not just an oil exporter, a promising market to attract capitol and
- advanced technology, or just another developmental experiment in other fields, a
 tracting the attention of world leaders when they visit the Kingdom. Saudi is held
 at a very high regard among Islamic states, for being the home of both the holy
 mosques at Makkah and Medina. Geo-political considerations alone do not make
the Kingdom the first reference in the Islamic World, but because it also has many
scientific institutions of major influence on Islamic studies; such as the University
 of Imam Mohammed bin Saud in Riyadh, University of Um AlQura in Makkah, and
 the Islamic University in Medina. All of which house numerous Muslim students
 ,from all around the world. Hundreds graduate from these universitiesall specialized in Islamic studies, Arabic language, and Arabic literature. These students return to their countries and convey what they have learnt in these religious institutions in the Kingdom, to maintain the belief, purity of faith, evade myths and superstitions, face extremism, the worship of Allah alone in accordance to the teachings of the Prophet and the Holy Quran, and maintain the teachings by following the example of the Prophets followers.

Coastal Regions
 Coastal regions are those with a sea front such as Jeddah in the western region
- and Damman in the Eastern Province. Each enjoys coasts with entertainment facilities and aesthetic sculptures. Both are considered to be the most important
centers of national tourism attractions.

Purchasing Power
 The Kingdom, especially the capitol Riyadh, is currently witness to an expansion in
- the construction of shopping malls that aims to meet the needs of different qua
 ters from north to south. The increase in liquidity plays a major role in absorbing
 ,capitol through local investments, for a number of reasons. One reason being
 increased savings rates among citizens as a result of oil returns, in addition to the participation of a large number of citizens especially those ranging between the ages of 25-40 in the stock market which makes good profit as a result of increasing the number of companies listed in the market which ultimately lead to the increase of purchasing power of the consumer giving the investors indicators on the importance of having international shopping centeres that absorb this purchasing power as the Kingdom seeks to join the World Trade Organization.

Diversity of Population
 The Kingdom is also known for its diversity of population. It joins comfort and
luxury specific to the 21st century of the western world with the unique culture and 
hospitality known of the Arabian Peninsula.

Population Growth
 The population of the Kingdom is known for its high growth rate in comparison to
 other growth rates of the Arab world. It is also known for its capability to absorb
 ,both Saudis and non-Saudis, increase in education, a decrease in unemployment
 which prepares a suitable job market for good investment projects. The population
of the Kingdom in September 2004 reached about 22.7 million as opposed to 13
million in 1985, and 21 million in 1999. the population growth rate in the Kingdom is
3.24%, which is average compared to the growth rate of Kuwait 0.07%, the lowest
- of all Arab countries, and UAE’s 5.84%, the largest in the Arab World. The popul
 tion growth of the Kingdom rises above the overall average in the Arab World at a rate of 2.37.

Economic and Political Stability and Security
 Over the past 76 years, the Kingdom has been witness to a huge development
 ,phase, comprehensive renaissance in the economic, social, educational, cultural
- and medical fields. All of which have reflected positively on citizens and have co
- tributed to the reformation of awareness, raised the standard of living, social st
 atus, as well as reinforced the ability to cope and adapt to the global developments, advances and variables

 

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Dow to Invest in Water Technology in Saudi Arabia

Posted on August 2, 2011

“Dow has a 50-year history of innovation and market leadership in the water industry. Saudi Arabia and nearby emerging markets represent a tremendous opportunity for Dow. Our plan is to complement our commercial presence with a manufacturing footprint, thereby bringing us closer to regional customers and strengthening the global competitiveness of our water business,” said Jerome Peribere, Dow executive vice president and president and chief executive officer, Dow Advanced Materials.

The proposed facility would deliver local supply security of cutting-edge technologies for water desalination and water re-use for potable, non-potable and industrial water serving Saudi Arabia, the surrounding Middle East and North Africa region and emerging markets worldwide. Additionally, these water membrane technologies will deliver cost-savings through reduced energy usage and superior operational efficiencies for customers in desalination, industrial, municipal, commercial and residential sectors.

Modern water treatment technology allows industrial economies to advance while minimizing water requirements. Over the years, improvements in DOW FILMTEC RO membrane elements have provided a threefold increase in the amount of treated water per element while reducing energy costs in desalination and other water purification and re-use projects around the world. Desalination plants with Dow technology produce hundreds of millions of gallons of freshwater per day in many sites around the globe, contributing to Dow’s overarching goal to further reduce the cost and energy-intensity of seawater desalination.

“The Kingdom of Saudi Arabia is a key market for Dow Water & Process Solutions. This new proposed world-class facility will increase our ability to deliver the most advanced, affordable and sustainable water sourcing and treatment options for desalination, wastewater treatment, and other applications,” said Dr. Ilham Kadri, commercial director for Europe, Middle East and Africa, Dow Water & Process Solutions. “Dow is committed to the vital water conservation and purification needs of the region, and to combating water shortages that limit economic development.”

Dow is committed to investing for growth in Saudi Arabia. This announcement builds on the recent decision by The Dow Chemical Company and Saudi Aramco to form Sadara Chemical Company, a joint venture to build and operate a world-scale, fully integrated chemicals complex in Jubail Industrial City, Kingdom of Saudi Arabia.

Indeed investment in many Saudi industries is at an all time high. Stephen Chinnery of UK based Chinnery and Co Solicitors has had a ten fold increase in requests for business legal advice in the area.

Upon completion this joint venture is projected to be among the world’s largest petrochemical facilities and would represent the largest foreign direct investment into Saudi Arabia’s petrochemical sector. In 2009, Dow entered into a comprehensive Research and Development (R&D) collaboration agreement with the King Abdullah University of Science and Technology (KAUST), the region’s leading graduate-level research university.

“This new water facility and our collaboration with KAUST, coupled with our new world-class water technology center in Tarragona, Spain, are clear examples of Dow’s continuing investment in technologies and production capacity to meet the growing challenges for clean and affordable water supply,” Ian Barbour, Dow Water & Process Solutions general manager said.

 

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Saudi Arabian Airlines recognizes technology investments crucial to supporting region’s status as leading travel hub

Posted on August 2, 2011

 

Abdul-Raheem Bawazeer, Managing Director, SAP KSA

Abdul-Raheem Bawazeer, Managing Director, SAP KSA

The Middle East region is firmly establishing itself as a hub for travel and tourism with a report from Amadeus showing that the number of tourists to the region is expected to double from 54 million in 2008 to 136 million by 2020 and that 2 billion people are within a 2.5 hours reach by air from the region.

Saudi Arabian Airlines, established in 1945 and with a fleet of 139 aircrafts today, has recognized the importance of technology investments to maintain and grow its business in line with the travel momentum in the region and has announced the successful implementation of the SAP Enterprise Resource Planning (ERP) business solutions software to ensure best practice across the organization.

“The Middle East is fast becoming a hub for travel with its vibrant, increasingly attractive destinations and significant investment in tourism and hotel projects, and airport development.  There are many investment opportunities in places such as Riyadh and Qatar and inceasingly legal advice is needed to help foreign investers abroard. As such, the need to apply technology for competitive advantage and adapt to emerging trends is clear. SAP ERP provides Saudi Arabian Airlines with the business solutions software to streamline its back-office processes across the entire Group and provides the necessary support/integration to front-line solutions aiming to improve customer services and products, increase revenues, reduce costs and increase efficiencies and productivity. SAP plays an important strategic role in Saudi Arabian Airlines efforts aimed at transforming its Information Technology Division to a Shared Services IT Provider  model to aid the airlines in its pursuit of “excellence” and enable the airline’s “TAKE OFF” program to become a World Start Airline,” said Muhammad Ali Albakri, Vice President Information Technology at Saudi Arabian Airlines.

The SAP ERP application supports the essential functions of the business processes and operations efficiently, and has been tailored specifically to fit the needs of Saudi Arabian Airlines. The implementation is part of an overall strategic plan aimed at facilitating the airline’s privatization strategies and reacting to market conditions – further driven by the USD $4 trillion announced investment in travel and tourism projects in the Middle East according to Amadeus report.

“As one of the region’s leading companies, Saudi Arabian Airlines’ push to transform its business network and evolve its business model is supported significantly with SAP ERP software. The completed rollout will see improved overall productivity, simplified and integrated processes and improved customer relationship management,” said Abdul-Raheem Bawazeer, Managing Director, SAP KSA.

SAP ERP redefines enterprise resource planning, delivering role-based access to crucial data, applications and analytical tools. Business challenges for the airline industry within areas such as logistics, business intelligence, HR and lifecycle management can be dealt with effectively and efficiently.

Saudi Arabian Airlines needed a unified business and IT infrastructure to drive the transformation of its operations into nine multiple subsidiaries: Saudia Airlines, Saudia Catering, Saudia Cargo, Saudia Ground Services, Saudia Medical Services, Saudi Aerospace & Engineering Industry, -, Prince Sultan Aviation Academy, Saudia Real-estate Development Company, and Saudia Holding. Having extensively vetted various competitive offerings, the airline chose SAP for its industry expertise and the flexible design and open integration of SAP software.

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Investment opportunities abound in Kingdom

Posted on August 2, 2011

 

The performance of Saudi Arabia’s economy has been remarkable in recent years, especially since 2002 with the national economy more than doubling to $481.6 billion owing mainly to rising oil revenues.

The combination of additional government spending toward the ongoing program of economic liberalization and greater foreign participation in the economy has sparked numerous investment projects. There are many opportunities for foreign investors to make large amounts of money by investing in projects throughout the Middle East places such as Riyadh, Qatar and Dubai also offer plenty of venture opportunity.   

Saudi Arabia recently announced a $400-billion plan over the next five years aimed at upgrading energy projects, and the social and physical infrastructure in such areas as power, water, transportation, education and housing.

“Saudi Arabia is becoming a significant emerging economy able to attract substantial foreign direct investment (FDI). Since 2000, the investment environment has benefited from significant progress on structural reform involving liberalization and greater transparency. Real estate sector represented the major recipient of foreign investment, with a share of total FDI to the Kingdom expected to be more than 20 percent. This reflects the importance of the construction activities in the national economy,” said John Sfakianakis, chief economist at Banque Saudi Fransi.

According to the industry estimates, Saudi Arabia’s total transport sector investments are set to reach $100 billion by 2020 with over $30 billion allocated for new transport projects in the government’s next five-year plan. The Saudi government’s aggressive plans to overhaul existing transportation infrastructure will likely see huge investments flowing into the large-scale port, airport, rail, road and logistics projects in the coming years, the NCB Capital said in a recent report.

Inflows to the chemical and petrochemical industries sector will account for more than 10 percent FDI inflows, while FDI in mining, oil and gas will represent also around 10 percent of the total. Moreover, refined petroleum products should account for around 1 percent of total FDI inflow. Specifically, Ras Tanura, which is a combined refinery and petrochemicals project with an estimated cost of $22 billion, involves establishing a grassroots petrochemicals plant in order to produce more than 300 different products. Equally, the PetroRabigh complex, which is nearing completion, is another major combined refinery and petrochemicals project, spreading over eight square miles and involving 38,000 workers. Construction costs of the plant have reached $10 billion.

In 2007, construction started in six planned economic cities in addition to the King Abdullah Financial District in Riyadh. The new city focuses mainly on heavy industry, comprising oil industry and an integrated petrochemical complex, a copper refinery and smelter, an aluminum complex and an integrated aluminum refinery. Moreover, it is expected that projects worth more than $300 billion are under way for execution over the next few years.

Foreign investment

The variety of domestic and export-oriented investment opportunities in Saudi Arabia has attracted steadily increasing foreign direct investment as the economy has been progressively opened. Saudi Arabia’s rapid improvements have made the country an increasingly attractive destination for investment. The country’s growth in FDI inflow was especially impressive in light of the global economic downturn.

Improvements to business and property registration procedures made it easier and less costly to start a business and register real estate deeds enabled Saudi Arabia to reach the top 20, the World Bank said. Protection of public company investors was enhanced with a series of new laws from the Capital Market Authority and the Ministry of Commerce and Industry.

The government has already taken a number of decisions to increase the role of the local and foreign private sector in expanding the economic base and diversifying the source of national income. The move is also to increase the value of the country’s natural resources.

Saudi Arabia made bold business reforms making it one of the world’s leading reformers. Saudi Arabia is now the top ranked economy in the Middle East. Saudi Arabia has become the number one recipient of foreign direct investment in the Middle East. Inflows have increased and will continue to do so. With Saudi Aramco’s recent expansion of refineries and the building of the Kingdom’s economic cities, foreign investment in the country has become more attractive to investors abroad, mainly due to the liberalization of investment rules.

“In generally FDI volumes will reflect the overall scale of investment activity, with perhaps some bias in favor of those sectors that benefit from more favorable regulations. But ultimately, the key driver is economic opportunity, which in turn is a factor of the growth potential underpinned by population growth, the diversification policies, etc.,” said Jarmo T. Kotilaine, chief economist at the National Commercial Bank.

There will be massive opportunities in the great infrastructure boom, in energy, water, real estate, etc., but also most types of services. In some cases, however, investors may be cautious because of restrictive regulations on pricing. Health care is one case in point, he said.

The mode of FDI may vary depending on the regulatory environment. In some cases, foreign companies will take direct stakes in projects and operate on a fully equal basis. But the fact that the investment environment is more restrictive does not necessarily mean that foreign investors cannot benefit from it through investments in outsourcing and service companies.

“One of the major, still largely open questions, is the level of foreign interest in massive greenfield projects such as the economic cities. Here, the level of involvement will still depend on things like government guarantees/assurances, and greater clartiy on the time line of the ventures,” Kotilaine said.

According to professor Mohamed A. Ramady of King Fahd University of Petroleum and Minerals, Dhahran, the Kingdom has gone a long way in attracting both domestic and foreign investments but that the path has not been simple. The answer, according to Ramady, lies in a combination of factors: A quiet determination to overcome internal obstacles to business, whether faced by Saudi companies or multinationals, assisted by the creation of autonomous but empowered government institutions such as the SAGIA, to create a pro-business environment; develop a more knowledge-based society, and channel Saudi and foreign investments into mega economic clusters known as “economic cities.”

Unlike earlier large infrastructure developments, a key element of this strategy has been reinvigorated regional economic diversification and more equitable wealth creation for Saudi citizens. On the surface, the special economic zones and mega economic cities are seemingly alike, but in reality each are planned to specialize in certain niche core activities to leverage on the area’s location advantages.” Until such mega investor friendly projects had been launched, according to Ramady, “the Kingdom had not seemed to match inward investments with its undoubted economic size and potential compared to other Arab and Islamic countries. The reasons were a sluggish bureaucracy, uncompetitive incentives and taxation regime, multiple layers of governmental approvals, and seeming inflexible labor and sponsorship laws.”

However, Ramady said a wide range of regulatory and structural reforms were introduced to make Saudi FDI attractive, starting with the establishment of SAGIA as a one stop shop to take care of foreign partner’s investment needs and overcome the often mindless bureaucracy that had been the hallmark of doing business in the Kingdom. SAGIA was empowered to cut through red tape and assist with licensing, identifying local Saudi joint venture partners and presenting investment opportunities to foreigners. Corporate taxation levels were slashed to 20 percent levels and foreign companies were now able to own properties for their operational requirements as well as sponsoring their own employees without having to go through local sponsors.

Ramady said that the gradually whittling down of the list of “prohibited” economic activities in which foreigners could not invest in has helped to attract foreign investments, and today the prohibited areas are mainly in security and defense related sectors, but stated that “the overriding principle of welcoming FDI to Saudi remained the same with priority for those that added value through technology transfer and job creation.”

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Siemens announces a major investment in Saudi Arabia

Posted on August 2, 2011

 

Today there opportunities abound for Western investment in Saudia Arabia and the Middle East, as there are many uptapped resources and strong business potential. Area’s such as Riyadh, Qatar, Dubai and Saudi can produce great dividends and ofetn require western legal advice to help guide foreigners through the local legal customs which can sometimes seem overwhelming. Chinnery and Co solicitors in the UK are one such law firm who have been able to form strong local government and legal connections in order to assist business proffesionals.

Siemens to build a manufacturing and repair facility at a cost of hundreds of millions of US-Dollars.

Today, Siemens AG has revealed plans to establish a manufacturing and service facility in the Kingdom of Saudi Arabia. The manufacturing facility will include the local production of gas turbines and rotating equipment, a repair workshop and service facilities for the Saudi Arabian and Middle East market. The new center will be located in the Eastern Province. It is planned to be operational 18 months after final permissions and government approvals. When launched the manufacturing hub will create many job opportunities and be a home to both Saudi and international experts. 

“The establishment of this manufacturing facility in the Kingdom of Saudi Arabia is a natural progression of our historic relationship with the country,” says Peter Loescher, President and Chief Executive Officer of Siemens AG. “The center will be state-of-the-art and produce the latest and sustainable technology. Thus, the center will be both a job machine and a center of excellence for engineering.”

The investment decision was announced while Peter Loescher was meeting with Khalid A. Al-Falih, President & CEO Saudi Aramco and Ali S. Al Barrak, President & CEO Saudi Electricity Company, and other Senior Executives of Saudi Aramco, and Siemens in Saudi Arabia last week.  

Siemens is committed to gradually create more than 1000 jobs at the new factory. It is estimated that in the wider context approximately 3000 indirect jobs will be created in the Eastern Province, where the factory will be constructed. Siemens intends to give the training and education of young Saudis a further boost by building up technology know-how via vocational training based on the German concept. This proven and successful concept includes theoretical courses and applied “on the job” apprenticeship.

Khalid A. Al-Falih, President & CEO Saudi Aramco says of the investment plans: “Siemens has a stellar global reputation for their technology and innovation culture. They have worked with Saudi Aramco and the Kingdom and have contributed to Saudi Arabia’s development through their products and services over many decades. Their track record in our country spans many fields ranging from power generation to health care to various aspects of oil and gas production and processing, and I am convinced that the establishment of a manufacturing hub and the creation of high-quality jobs will make Saudi Arabia a significant hub for technological excellence.”

“We are proud to continue our successful history in Saudi Arabia with this outstanding project,” says Wolfgang Dehen, CEO of the Energy Sector Siemens AG. “The country and the region are developing fast. There is a clear demand for sustainable and efficient energy as well as for the ramp up of technology know-how and positions for ambitious young people.”

“The Kingdom of Saudi Arabia is pushing to establish latest technologies and to develop specialist and engineering knowledge for the power industry in the Kingdom. To engage with a global innovation leader such as Siemens will assist the Kingdom to make best use of its natural resources and to realize its vision of a knowledge society. This commitment by Siemens will strengthen the partnership between the two companies”, explains Ali S. Al Barrak, President & CEO Saudi Electricity Company.

Mr. Abdulrahman F. Al-Wuhaib, Senior VP Operations Services, Saudi Aramco, mentioned that this is an important milestone on two strategic fronts for Saudi Aramco. On the one hand it supports the corporate strategy to increase local participation in the Company’s procurement activities where Siemens and Saudi Aramco recently announced a corporate procurement agreement (CPA). This agreement forms another corner stone of the intensive and progressive business relationship developing with Saudi Arabian companies. On the other hand, Siemens’ involvement brings the world’s best technologies to bear toward the company’s efforts to improve the Kingdom’s energy efficiency and reduce energy intensity.

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Top Ten reasons to invest in Saudi Arabia

Posted on August 2, 2011

Reason No. 1 
Unique and strategic location
Situated in the Southern-Eastern part of the Asian Continent, The Kingdom
occupies about 2,240,000 square kilometers of Arabian Peninsula. It has 1700
kilometers of Western Coast along the Red Sea and 560 kilometers of Eastern
Coast along the Arabian Gulf. Land boundaries in the South and in the North
exceed 2,700 kilometers.

Reason No.2
Strong and dynamic economy
Bilateral trade agreements: To facilitate its final target to create global partnership it
signed much bilateral trade. Once His Majesty King Abdulaziz  succeeded in consolidating
the Kingdom of Saudi Arabia on the basis of Islamic rules, he started building good
reputation and international relations for the kingdom. In that context Saudi Arabia  
participated in the foundation of several international organizations such as, United
Nations and Arab League. During the last years Saudi Arabia has signed bilateral
agreements with many Arab and other countries so as to enlarge the market for exports.
These efforts have been reflected in exports-imports development during the last decade.     
Dynamic Economy: Saudi economy is dynamic and proved it capability of modifying itself
with major regional and global changes: To a very large extent, Saudi Arabia’s success in
adjusting to reduced revenues is attributable to the Kingdom’s national planning process.
The planning function which permeates all areas of government activity ensures that the
country enjoys the benefits of a long-term economic strategy. Just as the earlier
Development Plans ensured that the Kingdom’s revenues were applied to the essential
task of developing Saudi Arabia’s infrastructure, its industry and agriculture, so subsequent
Development Plans, have focused resources more on consolidation of Saudi Economy. The
main achievements of these plans can be summarized as follows: 
Continuous and steady economic growth,  Developed infra structure, Developed industrial
sector, and Developed banking system.
Enhancement of the ability and consolidation of the national economy to cope efficiently
with international economic change. More about economic achievements of Saudi
economy. 
Law inflation rate: The kingdom has enjoyed low inflation  rate. It  is worth mentioning
that inflation in the kingdom is considered to be among the lowest in the world.
Strong banking sector : Saudi Arabia has a modern banking system and its financial sector
capable of contributing significantly in financing investment process. The Saudi Arabian
Monetary Agency (SAMA) acts as the central bank. It controls the working of banks and
other financial institutions, apart from being responsible for monetary and exchange rate
policies. There are 12 commercial banks in the country which together have 1206 branches
as in the beginning of 2002. Besides, there are five semi-Government long-term financing
institutions: Saudi Industrial Development Fund (SIDF), , Real Estate Development Fund
(REDF), , Saudi Agriculture Bank (SAB) , Public Investment Fund (financing Government
investment and public corporations), and  Saudi Credit Bank (SCB). Demand deposit has
increased significantly over the past 10 years. It  reached SR billion………. riyals in 2002.

Reason No.3
Expanding market
Another yardstick for measuring the strength of an economy is the size of its market.With a steadily increasing population subject to a growth rate of over 3% ,and an annual per capita of around $80,000,Saudi Arabia is indeed a big potential market for consumer goods & services .

Reason No.4
Religious importance
Saudi Arabia has a great religious importance to Muslims all over the world. Historically,
Saudi Arabia has occupied a special place in the Islamic world as the very heartland of
Islam. Indeed, it is toward the sacred Ka’abah in Makkah that Muslims turn devoutly in
prayer five times a day. More to the point, its Mohamed (peace be upon him) place of
birth, and the place where The  Qur’an, the sacred scripture of Islam, was revealed.

Reason No.5
Modern and developed  infrastructure
Premises suitable investors’ requirements: There is a wide range of various premises suitable for dwelling, production, and offices and which meet all investors’ requirements.
Rail ways : Industrial companies within the region benefit from miner railway lines linking
production centres of companies and other industrial institutions that depend mainly on railways for transportation of their products to marketing centres.The Kingdom’s railways currently consist primarily of a single track, standard-gauge line, running for 350 miles [570 km] from Riyadh to Dammam in the eastern region. This line, which was opened in 1951, passes through Dhahran, Abqaiq, Hofuf, Harad and al-Kharj and has benefited from substantial renovation in recent years. An additional line joining Hofuf with Riyadh was opened in 1985. Developed highways : KSA  is well connected by roads to other to other Gulf states . The highways are among the best in the world in terms of quality. All roads are well-equipped with networks of modern and high quality petrol stations which render full range of services up to the best international standards.
Airport and aviation: Air traffic  between the Kingdome  and other international destinations has been much smoother during last years due to the persistent efforts of the Saudi Arabian Airlines which was accompanied with the establishment of  King Fahad International Airport. Ports :The Ports Authority supervises the management and operation of the eight main seaports located on the two coasts of Saudi Arabia ( six commercial ports( one in Eastern Province) and two industrial ports ( both are in Eastern Province). The berths of these ports constitute the biggest port network in the Middle East.
Telecommunications infrastructure: Telecommunications infrastructure in Eastern Province is developing rapidly. There is an opportunity to expand the usage of mobile phones, cell communication of GSM standard and paging communication. Eastern Province has high quality access to the Internet services which are provided by a number of companies.

Reason No.6
Vast natural resources
With one-fourth of the world’s proven oil reserves, Saudi Arabia is likely to remain the worlds largest net oil exporter for the foreseeable future. Moreover, the kingdom is endowed with  other natural resources including a wide range of industrial raw materials and minerals such as bauxite, limestone , gypsum, and iron ore Saudi Arabia is the gateway that links the biggest two continents Asia and Africa .Because of its unique location Saudi Arabia is sited near 50% of the world population In addition, from geographical point of view, it is located in the middle of the  Middle of the Muslim world.

Reason No. 7
Growing opportunities for foreign investment
In Energy Sector, Gas exploration, Oil refining, Power Generation, Non-Oil Sectors  Industry , Agribusiness, Tourism, Fishing, IT& communications, Mining and Education.

Manchester based solicitors Chinnery and Co are a forward thinking law firm who have been aware of growing opportunities in Riyadh and throughout the Middle East for some time. It is with this in mind that they have formed links within local government to assist many business clients who wish to make their way in foregin investment opportunities. 

Reason No.8
Social and political stability
With a strong, pro-business government, excellent external relations and consolidated social structure internally, Saudi Arabia is an oasis of political and social stability in the region. This has resulted in : Stable economic policies and regulations. Steady and continuous economic growth. Stable currency: stable currency during the past three decades: the central bank is committed to maintaining the riyal’s peg to the US dollar at SR 3075: US $1. Its ample reserves along with its control over local interest rates will allow it to do so. Saudi system of government, as defined under the Basic System and the establishment of the Consultative Council, is not a move towards Western-style democracy, much less an imitation of Western-style democratic reform. It is an organic development of the consultative basis of the relationship between the leader and the people that is inherent in Islamic tradition.
The Saudi Arabian system is a natural extension of the consultative tradition which has existed in the region for many centuries.
The Males, or consultative session, provides an opportunity for every citizen to present his case, his request for help, his complaint about a grievance, his suggestion for an improvement, to a person in authority, whether that person is governor, a minister or the
King. Apart from creating a climate in which everyone feels they have access to that in power, the Majlis also ensures that those in power are aware of and ultimately sensitive to the opinions and wishes of those for whom they are responsible.
In the course of its planning for comprehensive development throughout six development plans, the Kingdom has always pursued the macroeconomic objectives of economic growth, full employment, stable prices and the avoidance of sharp fluctuations in economic activity. The provision of opportunities for all members of Saudi society to participate in thedevelopment process has been a permanent goal of successive Development Plans so as to avoid any adverse social impacts which may result from rapid economic growth and modernization seen in many developing countries.
80,000,Saudi Arabia is indeed a big potential market for consumer goods & services .

Reason No.9
Modern and developed  infrastructure
Premises suitable investors’ requirements: There is a wide range of various premises suitable for dwelling, production, and offices and which meet all investors’ requirements.
Rail ways : Industrial companies within the region benefit from miner railway lines linking production centres of companies and other industrial institutions that depend mainly on railways for transportation of their products to marketing centres. The Kingdom’s railways currently consist primarily of a single track, standard-gauge line, running for 350 miles [570 km] from Riyadh to Dammam in the eastern region. This line, which was opened in 1951, passes through Dhahran, Abqaiq, Hofuf, Harad and alKharj and has benefited from substantial renovation in recent years. An additional line joining Hofuf with Riyadh was opened in 1985. Developed highways : KSA  is well connected by roads to other to other Gulf states . The highways are among the best in the world in terms of quality. All roads are well-equipped with networks of modern and high quality petrol stations which render full range of services up to the best international standards. Airport and aviation: Air traffic  between the Kingdome  and other international destinations has been much smoother during last years due to the persistent efforts of the Saudi Arabian Airlines which was accompanied with the establishment of  King Fahad International Airport.
Ports :The Ports Authority supervises the management and operation of the eight main seaports located on the two coasts of Saudi Arabia ( six commercial ports, one in Eastern Province) and two industrial ports ( both are in Eastern Province). The berths
of these ports constitute the biggest port network in the Middle East.
Telecommunications infrastructure: Telecommunications infrastructure in Eastern Province is developing rapidly. There is an opportunity to expand the usage of mobile phones, cell communication of GSM standard and paging communication. Eastern
Province has high quality access to the Internet services which are provided by a number of companies.

Reason No.10
Attractive Investment Climate
Coherent commercial mentality: Saudi Arabia has enjoyed a  commercial culture since time immemorial. Embracing modern business practices and globalization are in keeping with the Kingdom’s past. Many international companies have invested in Saudi Arabia. 
No foreign exchange restrictions :The Kingdom has experiences free financial system and  shunned foreign exchange restrictions and obstacles to the transfer of funds.
Moderate tax environment :Moderate tax environment and taxes on profits have been reduced to 30%  .
Various tariff exemptions: Commodities imported for industrial production are exempted from duties  .
Flexibility with investors:  Loss making units are permitted to transfer losses to following years. And Loss making companies are taxexempted until they improve their financial performance   .
Termination of sponsorship system:  The sponsorship system for foreigner is scrapped—foreign investors do not need to have a Saudi partner to operate in the country .
Availability of soft loans: The Saudi Industrial Development Fund (SIDF). Provides soft long-term loans to the industrial establishments for up to 50 per cent of the total cost.  Loans are for 15 year duration with a repayment subjected to future cash flow.
Huge utilities in industrial cities: The Eastern Province has five industrial cities, the largest of them is al Jubail industrial city. Those industrial cities  are equipped with  all facilities  the investors may need.

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Progress on world’s tallest tower in Saudi

Posted on August 2, 2011

The investment firm headed by Saudi billionaire Prince Alwaleed bin Talal signed a 4.6 billion riyal ($1.2 billion) deal with the Saudi Binladen Group to build the world’s tallest tower.

Manchester based solicitors Chinnery and Co are a forward thinking law firm who have been aware of growing opportunities in Saudi and throughout the Middle East for some time. It is with this in mind that they have formed links within local government to assist many business clients who wish to make their way in foregin investment opportunities, such as the tower.

Kingdom Holding Co. said the more than 3,280 foot (1,000 meter) high Kingdom Tower, to be built north of the Red Sea city of Jeddah, is part of the first phase of the planned Kingdom City. The sprawling mega project, announced in 2008, is slated to cover a two-square mile area.

Kingdom Tower will include a hotel, serviced apartments, luxury spaces and offices occupying roughly 5.4 million square feet, KHC said.

The project is but one of several ambitious mega-ventures in the kingdom, OPEC’s top exporter, as it seeks to diversify its economic base from the crude oil that has fueled its growth for years.

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HSBC to merge its Saudi Arabian investment banking unit with SABB Securities

Posted on August 2, 2011

HSBC has said that it will merge its Saudi Arabian wholesale and investment banking unit, HSBC Saudi Arabia, with SABB Securities, a wholly owned brokerage and custody business unit of The Saudi British Bank (SABB).

SABB would own 51% of the new entity, to be known as HSBC Saudi Arabia, but HSBC would retain full management control.

The new partnership will be a full service investment bank, undertaking activities in asset management, brokerage, investment banking advisory, debt capital markets, equity capital markets, project export finance, custody, and investment advisory Services.

HSBC Middle East and North Africa CEO Simon Cooper said this announcement underscores HSBC’s commitment to its business in the Kingdom of Saudi Arabia, and to its joint venture partnership with SABB.

“Saudi is the largest market in the Middle East, and we are delighted to be able to cement our partnership with SABB and our presence in the Kingdom with this transaction,” Cooper said.

The merger, which is subject to regulatory approvals, is expected to complete by the end of 2011.

As at the end of last year, the combined businesses had gross assets valued at $188.4m.

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