Saudi Arabia boosts the reception of foreign direct investment

Saudi Arabia has approved a regulatory framework to boost foreign direct investment in the nation.  

This framework includes the bases for structuring investment from abroad, all in collaboration with other nations and international organizations.    

The Saudi government session that has determined this initiative was chaired by the crown Prince, Mohammed bin Salman, as reported by the official Saudi news agency SPA.

The arrival of foreign direct investment in the Saudi kingdom reached 96,000 million Saudi riyals (25,600 million dollars) in 2023, which is an annual increase of 50% over the previous year, according to official figures. 

Saudi Arabia has forged important relations with other relevant countries to attract foreign direct investment in its own territory and to be able to develop various national economic and productive sectors in order to enhance them and have a more diversified economy; such as new technologies, different industries, tourism or even the sports sector.  

This is the guiding principle that forms the backbone of the Vision 2030 plan that the Saudi state implemented several years ago to vary national economic activity and not rely mostly on the hydrocarbon sector, which has been the main source of national financing for decades.   

Under the guidelines of the crown Prince and Prime Minister Mohamed bin Salman, Saudi Arabia has been investing significant sums of money and weaving economic and productive relations with other nations for several years to take advantage of its own momentum and that contributed by these other countries in order to develop different economic and productive sectors to the maximum, with the aim of complementing the field of oil as the main source of wealth generation.   

As a noteworthy fact, Saudi Arabia aims to reach 100,000 million dollars in annual foreign direct investment by 2030, a figure three times higher than it has ever achieved.   

The issue is important because the inflow of foreign direct investment to Saudi Arabia stagnated in the first half of 2024, which shows that the Saudi kingdom is still having difficulties attracting money in order to support its important economic transformation plan linked to the Vision 2030 plan.  

As of September 2024, inflows amounted to 9.7 billion dollars in the first six months of 2024. This is slightly higher than the figure recorded in its worst first half since 2020. Even so, FDI rebounded by 14.5% in the second quarter compared to the first, to 5.2 billion dollars.  

The Saudi kingdom aims to receive 29 billion dollars in foreign direct investment this year, as Crown Prince Mohammed bin Salman seeks more money to boost his multibillion-dollar economic diversification plan. To reach that goal now, Saudi Arabia would need one of its largest inflows of foreign direct investment in a second half.  

The crown prince informed the Cabinet about his recent talks with leaders of several allied countries, focusing on strengthening ties between various sectors, the SPA agency reported.  

Meanwhile, the Minister of Media, Salman Al-Dossary, stressed that among these decisions the Cabinet authorized the accession of Saudi Arabia to the Advance of Cement and Concrete Initiative, launched within the framework of the United Nations Conference on Climate Change. 

This is in line with the Kingdom's sustainability goals and its commitment to the global climate agenda.  

The Cabinet also approved an agreement with Qatar to avoid double taxation and prevent tax evasion.  

This move highlights Saudi Arabia's dedication to fostering economic cooperation within the Gulf region, facilitating smoother cross-border investments and improving transparency in financial transactions.  

In line with the advancement of Saudi Arabia's capabilities in science and technology, the Cabinet also approved a framework agreement with the United States to cooperate in the civil aviation sector and the peaceful exploration of outer space.  

These are some of the examples of the collaboration carried out by Saudi Arabia to continue boosting the inflow of foreign direct investment.