The Ministry of Investment of Saudi Arabia (MISA) reported today that more foreign investor licenses were issued during Q1 2021 than during any previous quarter since Saudi records began in 2005, as the Kingdom’s investment recovery accelerates.

The issuance of 478 new licenses breaks the previous record, set as recently as Q4 2020, and marks a 2.6% quarterly increase. The first quarter of 2021 also recorded the fourth consecutive increase in the number of new foreign investment projects since the peak of the pandemic in Q2 2020, indicating a continued rebound in FDI (Foreign Direct Investment).

The Kingdom, a G20 nation, is seeking to diversify its economy. The latest figures show that 114 new licenses issued in Q1 2021 were for the manufacturing sector. Data from the Ministry of Industry and Mineral Resources show that $4.7bn worth of industrial investments were made in the first quarter of 2021, more than four times higher than the same quarter in 2020.

This was followed by retail and ecommerce (78 licenses), construction (78 licenses), professional and scientific (62 licenses) and ICT (41 licenses). These sectors accounted for a significant proportion of growth.

Following a 2018 reform in the Kingdom that allowed 100% foreign ownership of companies for the first time, 59% of new investment projects in Q1 2021 had full foreign ownership, with the remainder being joint ventures with local investors.

Reforms profiled include “Shareek”, part of a $7.2 trillion investment program designed to provide solid support for the Saudi economy via financial, monetary, and regulatory means, as well as through asset investment over the next 10 years. As well as the “Made in Saudi” program to strengthen the private sector’s resilience and contribution to GDP, and the Private Sector Participation Law to accelerate private sector participation in infrastructure projects and the privatization of public sector assets.

Eng. Khalid Al-Falih, Minister of Investment of Saudi Arabia, said: “These latest figures show that, despite the ongoing impact of the COVID-19 pandemic on the global economy, foreign investors continue to have great confidence in Saudi Arabia’s historic transformation journey under the guidance of Vision 2030.

“Despite common global challenges, more and more investors are starting businesses in the Kingdom, FDI inflow into Saudi Arabia is at its highest level since 2016 when Vision 2030 was launched, and global interest in Saudi financial assets traded on our Tadawul stock exchange continues to grow”.

“Our goals are ambitious, but we are making progress at an accelerated pace to make it easier and quicker for international businesses of all sizes to access opportunities, opening up a wide and diverse range of economic sectors. So I am particularly delighted to see such a big increase in manufacturing, evidence that investors are looking beyond oil to other Saudi sectors like construction, retail & e-commerce, professional & scientific services, and ICT.”

The report’s findings correspond with trends indicated by UNCTAD’s World Investment Report 2021, published in June, which noted that FDI in Saudi Arabia remained robust, with inflows increasing to $5.5 billion and investments concentrating in financial services, retail, e-commerce and ICT.

The report also details recent progress made by Saudi Arabia to ensure that investors in its health sector are supported by appropriate regulatory frameworks for sustainable growth, digitization, and increased efficiency. A growing, wealthy population and major government investment has led to growing demand for healthcare services and the Kingdom is aiming to grow the private sector’s contribution to the healthcare market from 25% to 35% by 2030.

The Ministry of Health has already launched a project for the private sector to build and operate the 244-bed capacity Al-Ansar Hospital in Madinah with a an initial investment of approximately $187 million, and a comprehensive privatization plan for the next five years will soon present investors with more detailed opportunities.

Please find the full report here