Twelve Najran industrial projects open to foreign involvement
The Saudi Arabian General Investment Authority (SAGIA) has recently completed feasibility studies for 12 investment projects in the southern city of Najran. The annual turnover of the proposed projects, dealing with foodstuff, chemicals, construction material, engineering and handicraft, is anticipated to reach $37.7 million with $9.6 million net profits. The costs of the projects will expectedly reach $43.5 million, according to the Saudi Arabic News.
The paper also quoted Najran governor, Prince Mishal Ibn Saud, saying that a new industrial zone would be set up in the city at an estimated cost of $11.8 million. The Saudi Arabian General Investment Authority (SAGIA) has so far licensed projects worth SR32 billion ($8.5 billion) by foreign investors, according to its governor, Prince Abdullah Bin Faisal Bin Turki Al-Saud.
In a bid to diversify and liberalize its oil-led economy, the kingdom of Saudi Arabia has recently enacted a new investment law that for the first time allows foreigners to fully own local projects, no longer needing a Saudi sponsor. The law also relaxes procedures for sponsoring foreign staff, permits foreign ownership of project-related property and facilities and lowers tax on corporate profits.
Saudi authorities have recently indicated that a revision to the investment act exclusion list, which specifies which economic sectors cannot be opened up to foreign involvement, is under consideration.
The list currently includes the oil exploration and production sector, military supplies, wholesale and retail trade, real estate investment in the holy cities of Makkah and Madinah, printing and publishing, land and air transport, pipelines, power distribution, education and recruitment services, fishing, and medical services. Both telecommunications and insurance have been removed from the list.
“By expanding the industrial and commercial base of the Kingdom, the new law will increase job opportunities for Saudis. However, it usually takes four or five years from the time a new project is planned until it gets into operation,” SAGIA Deputy Governor Fahd Al-Sharif told Arab News.
Al-Sharif added that under the new law “all services open to local companies are also available to foreign projects, including loan facilities, low cost sites in industrial cities, duty-free imports of raw materials, etc.” SAGIA was set up in April 2000 to provide the mechanism for a new investment law. — (MENA Report)
© 2001 Mena Report (www.menareport.com)