Saudi bombings prompt foreign businessmen to leave the Kingdom
Foreign businessmen in Saudi Arabia are concerned that last week’s Riyadh attacks will change the way international firms do business in the Kingdom. Diplomats said no major companies investing in Saudi Arabia were leaving, but employees are heading home.
"Employees and families of large firms are leaving in very significant numbers, including many Americans," an anonymous Western diplomat said to AP. He added that companies could insist on increasing security for Western employees or replace Westerners with employees from other regions, such as Asia.
Last Monday’s attacks hit three compounds housing Saudi expatriates. The country has six million expatriate workers including about 35,000 Americans and 30,000 Britons. Saudi King Fahd linked the attacks to government reform efforts.
Muslim extremists believe the US is attempting to impose social reforms on the Kingdom following the September 11, 2001, attacks on the World Trade Center and Pentagon.
Direct foreign investment into Saudi Arabia is estimated at $11 billion. In a bid to attract foreign financing into the Kingdom, the nation’s Shura consultative council recently approved tax cuts on foreign firms’ profits from 45 percent to 25 percent.
The legislation offers tax exemptions for foreign investment, particularly for spending on research, development, and geological studies. It also allows losses to be carried over from one year to the next. In joint ventures with Saudi partners, taxes will be imposed on the foreign firm’s share. The measure also sets taxes at five percent on sales of tickets, freight, and mail for international airlines operating in the Kingdom. —
© 2003 Mena Report (www.menareport.com)