21 / 64
Investment
in Arriyadh
management discipline and techniques. The allocation of outside
capital to projects is also important, not least because financial
commitments are an indication that outside investors have
signed up for the longer run. Saudi Arabia seeks investors with
a long term horizon and there has never been any interest or
encouragement for foreign businesses looking for a quick profit
and exit.
There is much that experienced international entrepreneurs
will find surprisingly familiar. Thousands of Saudi companies
have long held ISO 9001 certification and work hard to
maintain and expand their corporate standing. The spread of
business discipline has been important in the nine years since
the Kingdom became the 149th member of the World Trade
Organization.
As part of the accession process, Saudi firms were given
diminishing protection against unfettered international
competition. That commercial insulation has been removed
progressively. In 2015 the last of the import tariffs that have
guarded Saudi producers will have been abolished. Nevertheless,
for some years, the larger businesses have already worked on the
basis that they are operating in a fully-competitive international
trading environment.
And it goes without saying that the process of working up
Saudi companies to make them fit and healthy players in global
markets, has been matched by government initiatives. The
year before the Kingdom became a full WTO member, anyone
wishing to start a business, whether local or from overseas, had
13 separate steps to undertake. On average the whole process
could take 70 days or more. The number of procedures has now
been pruned back radically to just three. Today, if everything is
in order, the whole start-up exercise can be accomplished in a
mere five working days.
Moreover the average actual cost of a start-up is now sharply
down on a decade ago. This has in part been achieved by the
slashing of fees, which were cut by fully 80 percent.
In 2010 the Ministry of Commerce established a One-Stop
Shop for investors and began to cut away any regulations that
were seen to inhibit or discourage foreign investors. Two years
ago, in another well-received development, officials from three
departments, the Department of Zakat (obligatory charitable
donation) and Income Tax and the General Organization of
Social Insurance (GOSI) were persuaded to establish a single
office where their parts of the registration process could be
executed at the same time. This innovation and its policy for
speedy and efficient action is reflected in the 2014 International
Finance Corporation’s Ease of Doing Business Survey, Saudi
Arabia continues to hold a stellar third position among world
economies. Thus foreign direct investment in Saudi Arabia really
is not one that is hampered by complications and delay.
Saudi Arabian General Investment Authority (SAGIA) has the
job of making things happen. It provides a dedicated team of
officials to guide the new investor from the very first moment
of engagement. There is also professional and multilingual
staff devoted to transforming serious foreign investment
commitments into functioning businesses, in the shortest
possible time and with the minimum of hassle.
From business registration through grant and concessionary
finance and commercial finance options, to local professional
services and potential business partners, SAGIA is committed to
translating a business proposal into a committed investment in
the shortest possible time.
There is no restriction to the nature of the business that
SAGIA will support. As of 2011, it had successfully fostered
21