Saudi Arabia has granted licenses to three Japanese companies and signed six memorandums of understanding with other entities as the kingdoms seeks to open up its industries to foreign investors to diversify its revenue sources.
The Saudi Arabian General Investment Authority (SAGIA) gave the licenses to three Japanese companies that include SMBC, a financial consultancy, SB Energy, a renewable energy consultancy and Tadano, a specialist that will provide technical services to Saudi agents in the industrial field, it said in a statement on Sunday.
The six memorandums of understanding including agreements between the Saudi Stock Exchange or Tadawul and Nomura International; Alyemni Group and Japan’s Matsutan Chemical Industry; and Saudi Electricity Company, Tokyo Electric Power Company and Nissan.
The agreements were signed during the one-day Saudi-Japanese Business Forum held in Riyadh.
Majid Al Qassabi, Saudi Arabia’s Minister of Trade and Investment, said the kingdom can be a launchpad for Japanese businesses seeking investment opportunities in the Middle Eastern and African markets
“The risk for them is low while they can earn high profits,” the minister said, according to the SAGIA statement.
Saudi Arabia, the world’s biggest oil exporter, is courting foreign investors as part of Vision 2030, an economic roadmap aimed at weaning the kingdom off oil income.
The vision envisages increasing the contribution of foreign direct investments to 5.7 per cent to GDP by 2030 from the current 3.8 per cent and raising the contribution of the private sector to 65 per cent of GDP from 40 per cent.
Saudi Arabia is Japan’s top oil supplier, accounting for 35 to 40 per cent of the Asian country’s energy needs.
Bilateral Saudi-Japanese trade exceeded 100 billion riyals in 2016, with Saudi exports accounting for around 72 per cent for the volume. Some 96 Japanese enterprises invest in the kingdom with a total capital spending of 53bn riyals. Around 96 per cent of investments in the kingdom are in the industrial sector, mainly petrochemicals.