Saudi Arabia is likely to grow at the quickest pace this year in a decade. The authorities’ continued implementation of the Vision 2030 policies will help diversify and liberalize the economy and thus pave the way to more stable growth, find the International Monetary Fund.
According to the International Monetary Fund (IMF), Saudi Arabia is likely to be one of the world’s fastest-growing economies this year. The Kingdom’s GDP is expected to expand by 7.6%. With the announcements of megaprojects such as the NEOM city, Red Sea conservation project, Trojena, the country is promising potential and opportunity for investors. Under the umbrella of Vision 2030, Saudi Arabia aims to achieve an increase in private sector contribution from a whopping 40% to 65% and a promising spike in Foreign Direct Investments (FDI) to 5.7% by 2030.
To further elaborate on the process of investing in the Kingdom, Communicate spoke with Paul Arnold, Managing Director for Sovereign PPG. Sovereign is a corporate services provider based out of Riyadh, aimed at helping businesses from the region and abroad set up with ease in the KSA. The firm provides essential support services such as company incorporation and secondary licensing, labor and immigration, company secretarial, accounting, etc.
In image: Paul Arnold, Managing Director at Sovereign PPG
Sovereign’s first and foremost recommendation to businesses interested in the Saudi market is to set up a base. “The message is clear that if you want to be tendering, bidding, and securing investments in the KSA, you need to be there in person with a commercial registration or license, and an office space,” says Arnold.
Arnold discusses how there is an opportunity for everyone in Saudi. “Unlike the pre-pandemic times, our number of inquiries is divided across a wide range of sectors and regions of the world. Even businesses who aren’t focused on the projects on a bigger scale are entering the market to merely expand their production footprint,” he explains.
Organizations headquartered in the far east in Hong Kong, Singapore, and even Taiwan are working with Sovereign PPG to launch in the Kingdom. “With a network of 23 offices across the world, businesses leverage off our skills and services to build a cemented structure in Saudi,” adds Arnold.
An opaque market
Arnold alerts businesses on how the Saudi procedures to set up are a little more complex as compared to those in the UAE. “There are some key differences that need to be considered. One of the many is tax. We advise businesses to take up the initial discussion on tax considerations in the KSA without which businesses can get their entire structuring wrong, facing consequences down the line,” he explains.
Saudi’s Vision 2030
“Sovereign PPG is committed to Saudi’s National Transformation Program, which aims to develop the necessary infrastructure and create an environment that enables the public, private and non-profit sectors to achieve the Kingdom’s Vision 2030. We continue to invest in our operations across the Kingdom, through the hiring of talented Saudi nationals, while ensuring that our technical knowledge and delivery capabilities are continuously updated,” says Arnold.
While the opportunity to invest is open to all potential candidates, there are some prerequisites that authorities in the Kingdom consider in an application. “Businesses need to demonstrate a proven track record to incorporate in their applications, which can take anywhere between a month to 3 months to become fully operational,” says Arnold.
The cultural and economic renaissance in the Kingdom continues to attract growing interest and confidence from the private sector, accelerated by assistance and incentive programs offered by the Saudi Government. “Our culture is entrepreneurial, and we are constantly adapting to guide clients on the rapidly changing landscape in the Kingdom. The progressive economy is bolstered by a youthful and talented workforce, and we anticipate further positive announcements at this year’s Future Investment Initiative (FII) to be held in Riyadh between 25th-27th October,” concludes Arnold.