Foreign Investments in Saudi Arabia | Reputable investors are always looking for new investment opportunities in different countries. Foreign investment is a significant risk, but if well calculated, you can earn a lot. Saudi Arabia is one of those countries with large economic potential. Most investors want to try their luck in the country. Below are the top five tips that will help you, if you plan to invest in Saudi Arabia.
1. Understand Tadawul Regulations (Stock Exchange of Saudi)
Tadawul is where the securities exchange in Saudi Arabia are supervised by the powerful Capital Market Authority. The Authority remains on top because more than 150 companies are listed with it. Most of the listed companies have invested in energy industries and financial services. Understanding Tadawal as a foreign investor provides you with a well-rounded exposure to the Saudi economy.
2. Specific Authorizations
According to Saudi Law, some sectors do not give opportunities to foreign investments in Saudi Arabia. You are advised to visit the SAGIA site which offers the Negative List. Currently, some of the areas where foreigners are not allowed to invest in are 19 service industries and the manufacturing industry. The listed industries include upstream petroleum, publishing and printing, and land transportation.
According to Saudi Labor law, any company must employ Saudi citizens. This law applies to Limited Liabilities companies and Joint Venture companies. It is essential to understand Saudization to avoid hiring specialists from other countries which could lead to legal issues.
4. Focus on Telecom and Electricity Sectors Under New Laws
The government of Saudi Arabia is now focusing on diversifying the economy. As a result, it has taken different measures to privatize significant industries. The two targeted industries are telecom and electricity. This government wants to create opportunities in these sectors for foreign investments in Saudi Arabia. A wise investor will see viable investment opportunities in such industries.
5. Government Tenders
Foreign companies who are interested in operating in Saudi Arabia without a Saudi agent can open offices and appoint representatives to pursue business opportunities directly with various government agencies and departments. Foreign companies interested in bidding on a government project must make themselves known to that specific government agency/ministry offering the plan.
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