The High Commission Issues the Investment Climate in Riyadh Report ‎ ‎

The Investment Climate in Riyadh Report represents one of the objectives of the High Commission for the Development of Riyadh and the Riyadh Competitiveness Center to provide local and foreign businessmen and investors with guidelines and information on policies and procedures related to relevant agencies and the range of investment opportunities available in Riyadh.

The 2015 Report, as in the editions of previous years, comprises four parts: Part One provides background and general information on the Kingdom of Saudi Arabia. Part Two under the title Riyadh City presents the importance and features of the city; infrastructure, economic and service sectors and the role of the High Commission for the Development of Arriyadh in the development of the capital.

Part Three shows the role of the Kingdom in enhancing the investment climate, includes the macro-economic indicators in Saudi Arabia and outlines policies and procedures adopted by the Saudi Government to support investment in the Kingdom in general and Riyadh in particular. It outlines key regulations and procedures, including the recent labor law related to investment, foreign investment and capital markets.

It also covers main government agencies related to investment in the Kingdom and Riyadh, including Council of Economic and Development Affairs, the General Investment Authority, Telecommunication and Information Technology Commission and the Saudi Commission for Tourism and National Heritage.

It also includes the agencies which provide development funding and investment support such as the Saudi Industrial Development Fund, Real Estate Development Fund, Agricultural Development Fund, Saudi Fund for Development, Public Investment Fund as well as commercial banks. This part ends with a brief on the indicators and goals of the Ninth Development Plan and the investment strategy in the Kingdom. Part Four handles investment opportunities in Riyadh provided by various public agencies such as the High Commission for the Development of Riyadh, the Saudi Commission for Tourism and National Heritage and other agencies.

It also includes information on investment opportunities in various private economic and service sectors and opportunities resulting from studies of sectors. The Investment Climate Report concludes with statistical tables of essential economic, service and social indicators in the Kingdom in general and Riyadh in particular. This is accompanied by a list of websites and other useful information on the most important public and private organizations involved in investment, administrative and legal procedures.

The report’s key indicators:

As the political, commercial and financial capital of the Kingdom, Riyadh is witnessing growth rates higher than those of other cities. The strength of its economy can be explained by population growth and increasing job opportunities which sustain the growth of demand for goods and services; as well as its strategic location at the center of a large regional market represented by the GCC States and other neighboring countries. Riyadh has also become a financial hub, home to the headquarters of the country’s commercial banks, Saudi Arabian Monetary Agency (SAMA), Capital Market Authority (CMA) in addition to other government credit and financial institutions.

1322 loans to finance 927 industrial projects

According to the report, data shows that MODON is receiving a large number of demands to study, plan and construct new developments as a result of the capacity of the industrial areas to establish more plants. There is also an increasing need to establish new developed industrial areas in elsewhere in the capital as well as in the wider Riyadh Region.

The Saudi Industrial Development Fund (SIDF) finances the industrial sector in Riyadh. During 2011/12 the total number of SIDF loans in Riyadh Region was 1,322 to finance 927 industrial projects. This represents 36% of the Fund’s total loans since its establishment up to end of 2013. In the fiscal year 2013, SIDF financed 52 loans for projects located in Riyadh Region representing 36% of the accredited loans during that year.

These loans were granted for the purpose of constructing 39 new industrial projects and expanding 13 existing industrial projects. Riyadh Region comes in first place in terms of number of accredited loans, and in third place in terms of accredited loans with a value of SR 1,204 million or 20% of the total accredited loans of the SIDF in 2013. .

3.5 million tons of agricultural production

The agricultural sector in Riyadh Region is of major importance constituting 33.1% of the Kingdom’s arable area. Riyadh Region lies at the center of the main agricultural areas in the Kingdom. This, and its proximity to Al-Kharj Governorate, one of the largest agricultural regions; makes the city pivotal in the distribution of agricultural production in the Kingdom.

Due to the state’s policy to maintain resources of groundwater, the total arable land and production of grains in Riyadh Region slightly decreased during 2013/14 to 21,901 hectares producing about 116,373 tons. In 2013/14, the area assigned for the production of vegetables in Riyadh Region was 54,755 hectares with 1,357,144 tons of production. In the same year, the area assigned for the production of fodder was 101,691 hectares with an estimated production of 2,137,740 tons.

Animal wealth growth in the region

The report referred that in 2013 there were 99,747 camels in Riyadh Region representing 42.8% of the Kingdom’s total. The number of sheep (traditional and specialized breeds) was 1,093,902 representing 18.3% of the Kingdom’s total. There were 151,083 goats, 14.6% of the total, and 251,397 cows representing 55.1% of the total.

70% of diary production in the Kingdom

The report revealed that the combined production of 17 dairy farms was more than 1,258 billion liters of milk or 70.6% of the Kingdom’s total milk production. The number of poultry (traditional and specialized) was more than 103.2 million or 17.1% of the total in the Kingdom. Apiaries in Riyadh produced about 7,388 kg of honey representing about 7% of the Kingdom’s total production. .

‎400,000 commercial institutions in Riyadh

Trade sector in Saudi Arabia witnessed real growth during 2014/15. The preliminary GDP results (by real price) by type of activity indicated that growth of this sector was 10.4%, with a contribution to the GDP of 9.5%. By 2013/2014, the number of commercial companies in Riyadh was 404,336.

During the fiscal year 2013/14 the Ministry of Commerce and Industry issued commercial registrations for the purpose of establishing 184,567 commercial companies distributed throughout various regions. 296.7% of these were in Riyadh.

Total commercial companies operating in the Kingdom and licensed from the Ministry by the end of 2013/14 was 1,369,668, 29.5% of them in Riyadh

113,000 construction licenses

Regarding the construction sector, the total licenses issued in 2014 numbered 29,136 or 25.7% of the total of 113,519 licenses issued in the Kingdom in the same year. 25,370 building licenses issued in Riyadh Region were for construction of residential and commercial buildings. State-of-the-art, well-designed buildings, skyscrapers and sophisticated malls constitute the majority of new buildings in Riyadh in recent years.

170 construction materials factories

According to the report, Riyadh’s building and construction sector is further enhanced by the existence of more than 170 licensed factories producing building materials, china, ceramics and glass, and there were 74 licenses for new factories. The sector is also sustained by the concessionary loans provided by the Real Estate Development Fund.

One million housing unit with 4.3% vacant

The report revealed that according to the latest study by the High Commission for the Development of Arriyadh, the overall number of housing units in Riyadh was 1,027,809 units; of which 4.3% were vacant, indicating an overall relative balance between supply and demand Used land area in Riyadh (residential, industrial, agricultural, green and others) was 60,419 hectares of the total area. Unplanned land area constituted 50,242 hectares and the planned area 119,771 hectares.

‏8635 schools serving 2.2 million students

Education in Riyadh is provided by government and private sectors for both genders at all levels: schools, technical and vocational training and higher education. According to latest statistics by the Ministry of Education in 2014/15, there were 8,635 schools in Riyadh with 87,965 classes, 106,079 teachers and 2,206,754 students Technical Education and Vocational Training operates through the General Organization for Technical Education and Vocational Training (GOTEVOT) and private training centers in Riyadh and includes Riyadh College of Technology, Telecommunications and Information College, and the Technical and Vocational Training College for Girls. These are vocational training organizations and the graduates are technically prepared to enter the labor market.

Various investment opportunities in the tourism sector

Riyadh enjoys several attractive tourism features including recreational facilities for citizens, residents and visitors. The city has several historical sites, such as Al-Masmak Fort, Ad-Diriyyah and King Abdulaziz Historical Center which comprises historical artifacts, museums, public libraries, squares, parks and gardens. Riyadh has a number of public parks, the most famous of which is Salam Park at the city center and Al-Watan Park within King Abdulaziz Historical Center, in addition to sport clubs and Malaz Zoo.

The zoo is equipped with recreation and children’s facilities and entertainments. The tourism sector in Riyadh serves a hotels of different classes to accommodate visitors to the city. At the end of 2013/14, Riyadh had 39 hotels distributed according to the new categorization of accommodation facilities of the Saudi Commission of Tourism and National Heritage (SCTH). There are 449.

47 hospitals and 435 medical centers

According to latest data by the Ministry of Health, there are 47 hospitals in Riyadh Region out of a Kingdom-wide total of 268. There are also 435 medical centers out of 2,259, 18 anti-smoking clinics, one forensic center, a preventive health center, a central laboratory, a medical rehabilitation center, three dentistry centers and 31 kidney disease centers.

24 local and foreign banks

The report mentioned that up to the end of August, 2015, 24 commercial banks provided financial and commercial services to citizens and residents in Riyadh including Arab and foreign branch banks, adding important economic weight to the city.

Riyadh’s strategic vision of the comprehensive strategic plan aims to be a prosperous commercial and financial center which opens the door for outstanding private sector strategic and investment opportunities.

Greater steps towards knowledge-based community

The telecommunications sector in the Kingdom in general, and in Riyadh in particular, has experienced fundamental change after the privatization of the sector and the establishment of the Communication and Information Technology Commission (CITC), headquartered in Riyadh. The Kingdom’s orientation towards information and knowledge-based communities has been embodied through the e-government program, which is based on the National Plan of Information Technology.

Riyadh Center Development Program ‎

The Report sheds light on the various metropolitan investment opportunities and efforts aiming to achieve a balanced socio-economic development through the diversification of the economic base, increase the city’s income sources, limit the flight of income, take full advantage of the city’s competitive characteristics and enhance its role as a financial, commercial and IT center.

The purpose of the program is to transform Riyadh’s downtown area into a historical, administrative, economic and cultural center at the national level through the preservation of architectural and cultural heritage as well as existing commercial activity. The benefits include the increase of employment opportunities, diversification of housing patterns, achievement of social and demographic balance, expansion of open areas, enhancement of urban security, as well as the improvement of road networks and public utilities in each area.

The plan identifies Riyadh downtown starting from Washim Street that is connected by Omar Bin Alkhattab in the north and Ammar Bin Yaser Street, connected by Asha Street in the south and Imam Abdulaziz Bin Mohammed Street in the west, an area of 15 km2. The most prominent features of this plan are development of housing in a number of neighbourhoods of the city center, redevelopment of residential areas of different densities and creation of residential units in order to increase population in a secured area with a good quality of life. A comprehensive transportation plan was set that includes rehabilitation of roads in a circular path that surroud the area as well as the establishment of new roads, rehabilitation of intersections, improvement of pedestrians areas and allocation of parking areas in different parts.

New Investment Opportunities in the New Suburbs

Since 2007 the High Commission for the Development of Riyadh approved the structural schemes of both northern and eastern suburbs in Riyadh. The northern suburb of 205 square km is 20 kilometers from the crossroad of King Fahad Road and the Northern Ring Road. The scheme of this area comprises road networks, rest houses, technical and residential areas and a sports city. These are investment opportunities favorable for the private sector. The Eastern suburb of 218 square km is 20 km from the cross road of the Eastern Ring Road and the Northern Ring Road. It comprises major activities including industrial services, hotels, dry port, construction, housing, government institutions, banks, companies’ branches, commercial malls, camping areas and parks. These activities and services are investment opportunities which provide about one hundred thousand job opportunities.

Historical Addiriyah Development Program

According to the report, investment opportunities offered by Historical Addiriyah Development Program include:

• Shops in Al Bujairi Plaza (Addiriyah Park): 86 shops with an average area of 40 m2 provide services for Addiriyah visitors such as food and beverages, traditional commodities, clothes and shoes.
• Al Turaif Inns (heritage inns for daily rent) these residences are made out of mud in Al Turaif Square in Historic Addiriyah . There are 15 inns divided into 40 suites.
• Al Turaif market and the food court: this market has 38 shops which is adobe constructed buildings used as shops and restaurants for families and individuals.
• The Heritage Hotel (west of Al Turaif Square): the investor is designing and building this hotel according to the development plan and methodology of the region and also is providing transport to the hotel, parking and all services necessary for the success of this investment project.

Other investment opportunities in Historic Addiriyah include:

• Snack stalls in Al Bujairi and Al Turaif.
• Gift and souvenir shops in museums in Al Turaif in addition to visitor centers.

Investment opportunities within roads projects

The High Commission for the Development of Arriyadh is supervising the implementation of a road network in the project areas of King Khaled International Airport and the extension of Abu Baker and Oruba Roads through Riyadh Air Base, King Abdullah Road and King Abdulaziz Road. The implementation of these projects will result in numerous investment opportunities such as:

• Petrol stations, cafes, restaurants and various commercial centers.
• Tree planting, irrigation, paving and lighting works.
• Installation of security monitoring systems as well as safety and traffic management systems.
• All of the previously mentioned are investment opportunities for the private sector.

Parking in High Density Areas

The report referred to the investment opportunities within parking projects in in high density areas. This can be offered by establishing multistory parking to be invested in over a pre-determined period and then returned to the government sector. This kind of investment is widespread around the world. Another way is by obtaining concessions for the best utilization of parking on main roads such as the commercial zones, hubs and downtown areas with high traffic densities, against payments from the private sector to the public sector.

Investment opportunities within the Public Transport Project in Riyadh City

The Public Transport Project in Riyadh City is one of the largest projects under implementation in the Kingdom. It will provide hundreds of investment opportunities for investors during establishment and after operation.

Railway projects

The Kingdom of Saudi Arabia offers a number of railway projects to link Riyadh with east, west and north parts of the Kingdom and Gulf states. These projects are: North-South Line, Railway Land Bridge Line, GCC Railway Project and they are expected to provide unprecedented investment opportunities.

Investment opportunities in power projects

In addition to various government agencies, other large economic bodies such as Saudi Aramco and SABIC offer opportunities for both national and foreign investment, favourable for the private sector for the promotion of a positive investment climate in Riyadh. Also the Riyadh Chamber of Commerce and Industry has established an independent investment center for the purpose of contribution to development of the investment climate in the Kingdom in general and in Riyadh in particular.

92 investment opportunities offered by ‎ Riyadh Chamber

Riyadh Chamber of Commerce and Industry The Investment Center established by the Riyadh Chamber as an independent center is seeking to achieve a number of key objectives. These include the enhancement of the investment climate in the Kingdom in general and in Riyadh Region in particular through repatriation of capital and attraction of foreign capital. The Center also aims to monitor the investment opportunities of the various business sectors in Riyadh Region and provinces, and promotion of the benefits accorded to foreign investment in the Kingdom by SAGIA.

It also works on the preparation of studies and reports on investment activity in the Kingdom and manages databases on investment in Riyadh Region in particular. The Investment Center of the Riyadh Chamber of Commerce has issued a guide on the professional and small craft investment opportunities, which contains 27 new opportunities. The capital of most of those opportunities is around SR 500,000.

Investment Opportunities Resulting from Sectoral Studies

Investment opportunities resulting from sectoral studies in Riyadh relate to development projects which had put their cornerstone. Over 1,800 development projects have been initiated in Riyadh in the areas of health, education, housing, roads, environment, water, sanitation, electricity, telecommunication, public services, and government and private development projects. The estimated cost of these projects is around SR 120 billion. These projects span all the provinces of Riyadh Region aiming to achieve a balanced and sustainable development related to actual needs, resources, geographical location, population and agricultural potential.

You can download/read Investment Climate in Riyadh 2015 via this link.