Core Highlights: –
- As stated by the Co-founder and CEO of Arabian Enterprise Incubators (AEI), Stuart D’Souza, “the direction and message of the overall pathway is loud and clear: that If you’re seeking to do business in Saudi, you need to be registered in Saudi.”
- The Kingdom of Saudi Arabia (KSA’s) latest reforms as well as regulatory compliances, have passed on a clear-cut strategy announced recently that, there will be a stoppage in signing contracts alongside foreign firms having the foundation of Middle East headquarters outside the kingdom’s territory, thereby placing a huge marked shift within its corporate foreign investment landscape.
- As per an integral part of the national Vision 2030 agenda-that’s core objectives is in diversification of the nation’s economies resilience away from the Oil and Natural gas as well as in luring foreign talents as well as investment-Saudi Crown Prince Mohammed bin Salman has kickstarted the kingdom’s economy with a series of reforms in current years while floating out a $6trillion investment prospects within the approaching decade.
Riyadh, Saudi Arabia June 3rd Thursday 2021
Story So far and future strategic plans: –
As per the highlights the message and pathway is loud and clear for the kingdom of Saudi Arabia, that is to follow the guidelines and regulatory compliances with strict attribution and as per the directives and guidance from his highness and Saudi Crown Prince Mohammed bin Salman to go in tandem with the national Vision 2030 agenda-that’s core objectives is in diversification of the nation’s economies resilience away from the Oil and Natural gas and fascinating native and global talents as well as investment while floating out a $6trillion investment prospects within the approaching decade.
The Co-founder as well as CEO of the Arabian Enterprise Incubators (AEI), Stuart D’Souza stated out that; “All of those recent initiatives are part of the ongoing transformation of the corporate and investment landscape. Saudi Arabia is seeking to attract or foreign businesses and investors as well as maturing the regulatory environment for those businesses that are already operating in the kingdom.”
Thus, this means that “The direction of travel is absolutely clear: If you’re seeking to do business in Saudi, you need to be registered in Saudi,” stated D’Souza.
He added out that; “As somebody who’s been in Saudi for 15 years, one of my mantras has always been ‘commit don’t commute’. For those businesses that used to fly in and fly out of Saudi, those days are on their way out.”
D’Souza also promptly stated out further that; “Saudi’s been a great market for some companies but it has been challenging for others and breaking the paradigm of going to the UAE first and branching out from there has been difficult.”
However, it was this the very latest announcement regarding foreign firms setting up their native hubs in the kingdom that triggered out the biggest stir.
Historically, global organizations favoured to set up their native offices in the UAE, and however, the Saudi Arabia is attempting to shift that.
He further elaborated that “That’s what Saudi is trying to do now by saying that if companies are going to be doing business here, they need to be registered here and they need to employ Saudi nationals, pay taxes etc. It’s sort of a rebalancing, and making things a little fairer.”
Paul Arnold, the Managing Director Sovereign Saudi Arabia was prompt to provide an explanation that “the cessation of travel within the height of the coronavirus last year and the ongoing boundaries nowadays could have encouraged UAE-based businesses to set up office in Saudi Arabia. Pre-pandemic it was very easy for businesspeople to commute between Saudi Arabia and the UAE on an almost daily basis.”
He also further continued that; “Given the lack of business travel during Covid and its slow uptick, people are realising they need to put two or three bodies on the ground and have a small office to expand from and that’s where we come in.”
While D’Souza termed the local headquarters decision a “pillar in the process of encouraging and incentivising foreign businesses to commit to the Saudi market” he stated out that they are still in the offing on clarity regarding “the triggers for the incentives and what a headquarters actually means in terms of headcount and functions etc.”
“But I think this will come out in the next few months and it’s all very positive,” he added.
Another foreign businesses-friendly scheme has been announced by the kingdom in January was that it was bearing in mind to set up 20 special economic zones.
“I’d certainly want to see more detail on the free zone proposals and how they will be operated in terms of the regulations and incentives, but also how they will interact with the onshore Saudi economy, which is where 99 percent of the government funded projects are,” said D’Souza.
Saudi Arabia has been undergoing a boom in marketable activity and Sovereign AEI, a firm which was tossed in 2019 as a partnership between Sovereign and AEI to provide expertise and guidance to firms who are looking to enter or nurture within the Saudi market, recorded a 300 percent upsurge in its corporate services throughout 2020. Meanwhile, the Ministry of Investment of Saudi Arabia (MISA) logged 466 registered licenses, the highest on record since data began in 2005, during the preceding quarter of 2020.