The number of investor licences granted to international companies to operate in Saudi Arabia rose 19 per cent to 348 during the first quarter of 2020 as the country adopted various measures to boost foreign investments.
“The first quarter of 2020 was Saudi Arabia’s strongest period for investor interest in ten years,” Khalid Al Falih, minister of investment of Saudi Arabia (MISA) said in a statement on Thursday. “However, the economic effects of Covid-19 began to be felt worldwide towards the end of this period, and this becomes evident when we compare the rate of new investment on a month-by-month basis."
January and February saw strong momentum, but growth began to slow in March, he said.
The growth in investments came from strategic partners of the kingdom such as the US and UK, the Ministry of Investment of Saudi Arabia said, adding 37 companies from the US and 32 from UK were awarded licences in the first quarter.
Quarter-on-quarter growth was also registered across a selection of sectors such as ICT, retail and e-commerce, and tourism, culture and entertainment.
“As we look toward a post-Covid-19 future, this is a reassuring show of confidence from the world’s investors in the kingdom’s long-term prospects as an attractive investment destination," Mr Al Falih said.
Saudi Arabia's government has rolled out stimulus packages and funding relief programmes worth $45 billion (Dh165.2bn) to mitigate the impact of coronavirus pandemic on the country’s businesses. Measures ranged from tax exemptions and discounts to the postponement of payments on utility bills. The government is also supporting the private sector by granting loans to boost their finances.
“The kingdom continues to develop investment opportunities in partnership with our local business ecosystem – with over 100 launched this week alone under our National Investment Promotion arm, Invest Saudi. We are confident that businesses will keep coming to the kingdom as investor activity gains momentum and adapts to the post-Covid-19 era,” Mr Al Falih added.
Saudi Arabia also signed new deals including a joint-venture partnership between a Saudi company and South Korean petrochemicals firm and the announcement of a new shipping line connecting Saudi Arabia to East Africa amid the pandemic.
The Arab world’s largest economy, last week, adopted various cost-cutting measures such as suspension of the cost of living allowances and tripling VAT to offset the impact of the coronavirus on its economy and shore up its finances.
