Minister of Industry and Electricity Dr. Hashem Bin Abdullah Yamani announced today that there would be tax incentives for foreign investors for amounts spent on research and development, and for promoting Saudization. Dr. Yamani made this announcement on the occasion of the laying of the foundation stone of the Madinah Industrial City by Deputy Prime Minister and Commander of the National Guard Crown Prince Abdullah Bin Abdul Aziz, who is currently on a tour of the city of Madinah and the surrounding area.
Dr. Yamani explained that foreign investors would be treated in the same way as native investors. He added that plans were under way to set up a general investment organization that would include a comprehensive service center where both Saudi and foreign investors could find all the required services under one roof. Referring to regulations mentioned recently by Crown Prince Abdullah, he said these are not directly a condition of joining the World Trade Organization (WTO), but a necessity in order to attract capital investments from overseas, which would result in the import into the country of materials, technology and marketing techniques.
Dr. Yamani said that the planned Madinah Industrial City would support medium-range industries, benefiting from the Kingdom's basic industries. He went on to say that the private sector welcomed the statements made recently by Crown Prince Abdullah concerning updating the Saudi Investment Act and reconsidering the issue of taxation for foreign investors. He reported that the Saudi economy grew by 9.5 percent in the 1997-98 fiscal year, and that exports were growing at over 14 percent.
The current project brings to nine the number of industrial cities in the Kingdom. The domestic industrial sector meets a great part of local needs, and exports to 118 countries all over the world. The Madinah Industrial City will ultimately accommodate 1,200 factories.