The Ministry of Investment of Saudi Arabia (MISA) has reported that 3,386 licences for new foreign investment were issued during the second half of 2021 – representing a 347.9% increase compared to the same period in 2020. 

 

Against a favourable economic backdrop and the Saudi government’s ongoing diversification efforts, the ministry has reported an increase in the number of new foreign licences – often viewed as an indicator of solid future FDI attractiveness in the Kingdom for the sixth consecutive quarter. 

 

Wholesale and retail sector dominates

The wholesale and retail sector continued to dominate foreign investment licence issuances, posting 1,481 new licences during H2 2021. The manufacturing and construction sectors claimed the second-and third-highest number of new licences in H2 2021, with 536 and 491, respectively. The accommodation and food sector and professional and scientific sector received 274 and 147 new licences, respectively. 

 

The net foreign direct investment (FDI) inflow reached $19.3 billion in 2021, representing a 257.2% increase compared to the previous year. The $3.7 billion in FDI in the second half of the year was a 23.7% increase compared to the same period in 2020.

 

The significant increase in net FDI inflows in 2021 was largely due to a $12.4 billion infrastructure deal closed by Aramco with a global investor consortium. Consisting of investors from North America, Asia, and the Middle East, the consortium acquired a 49% stake in Aramco Oil Pipelines Company. 

 

Growing attractiveness of Kingdom 

This steady increase in foreign capital inflows illustrates the growing attractiveness of the Kingdom as an investment destination, said the ministry.

 

Foreign investment is set to benefit further in the coming years from the ambitious series of initiatives announced in Saudi Arabia’s National Investment Strategy, launched in October 2021. The strategy outlines several measures, including creating special economic zones and sector-focused investor incentives, that will transform the Kingdom into an investment powerhouse and global hub for business and talent.  

 

MISA published the latest figures as part of its H2 2021 Investment Highlights Report, which provides an overview of the Kingdom’s investment environment development. 

 

In a foreword for the report, Khalid Al Falih, Minister of Investment, states: “Many of the initiatives introduced by the National Investment Strategy are linked to our desire to boost the Kingdom’s attractiveness as an investment destination. Global competition for investment is intense – everyone wants to attract the world’s most innovative and entrepreneurial enterprises. To ensure we remain an attractive destination, we intend to establish Saudi Arabia as one of the top ten economies in the World Economic Forum’s Global Competitiveness Index by 2030. 

 

“The private sector will benefit from these measures' regulatory and legislative reform. It will also benefit from new incentive packages for selected projects, government assistance in connecting with investment opportunities, and increased support with placing products and services in regional and global markets.”

 

The report also details an array of reforms, investor and mega-project highlights, evidencing the successes of Saudi Arabia so far as it continues on its diversification journey, whilst profiling a number of investment opportunity highlights, such as the Economic Center in Jubail Industrial City. - TradeArabia News Service