Saudi ArabiaBeyond Oil

August 2016

www.sagia.gov.sa

Saudi Arabia a Gateway to the RegionArea: 2 Million km²Population: 30.8 MillionPopulation Growth Rate : 2.55%Per capita GDP: 20,703 (2015) GDP growth at constant prices: 3.35% Cost of Living Index (Inflation): 2.3%20th Largest Economy in the WorldSource: CDSI and SAMA 2015

GE Manufacturing and Technology Center in Dammam © GE

6

IndexInvest in Saudi Arabia

The Economy

National Investment Plan

Infrastructure

Utilities

State-of-the-Art Communications Solutions

Taxation and Duties

Human Capital

Financial Support

Trade Agreements

SAGIA – here to help

8

12

10

16

16

16

23

24

28

30

36

7

8

Invest in Saudi ArabiaMarket Access

• Saudi Arabia is one of the largest markets in the region with a population of 30.7 million (2014) and an annual population growth of 2.55 percent

• Investment in mega projects across all industry sectors: A cumulative spend of US$180bn in KSA’s healthcare sector over the next 5 years and US$141bn total spend in transport over the next 10 years

• Borderless access to the rest of the Gulf Cooperation Council (GCC) countries and to the Greater Arab Free Trade Area (GAFTA)

Incentives and Commitment to Investors•Acceleratedpermitsandvisasforprequalifiedcompanies• Access to industrial loans and equity partners such as the Public Investment Fund

(PIF) and the Saudi Industrial Development Fund (SIDF) and the Saudi Industrial Investments Company once established

• The promotion of Saudi non-oil and foreign companies based in the kingdom exports by the Saudi Export Development Authority

•Exportcreditfinancing,guaranteesandinsurancethroughtheSaudiExportProgram• Financial support for the training and employment of Saudi nationals from the Human

Resources Development Fund

Business Operating Environment• 100% foreign ownership in key sectors•Nopersonalincometax,novalued-valuedtax,nosalestax,nolandtax,andno

property tax•Attractivetaxsystem,20%corporatetaxwithabilitytocarrylossesforwardtooffset

future taxes• Tax credits on R&D investments and tax exemption on earnings from exports•Fullrepatriationofcapital,profit,anddividendsallowed,subjecttoa5%withholding

tax

TotalPopulation

Population Growth Rate

30.7 2.55%Million Up to 2014

9

Skills Availability and Education• Supply of highly educated workforce - as part of the King Abdullah Foreign ScholarshipProgram,thegovernmentprovidesUS$2.4bnayeartofundstudents for foreign tertiary education

• The Joint Centers of Excellence Program(JCEP) at King Abdulaziz City for Science and Technology (KACST) includes several Joint Centers of Excellence (JCE’s) in collaboration with world renowned academic and international industry partners.

•Saudihosts24publicuniversitiesand20privatecolleges,24vocationalcolleges with a further 80 to be built

•Supplyofindustrialland,commercialrealestateandutilitiesatverycompetitiveprices,suchasKingAbdullahEconomicCity,MODON,RoyalCommission,KingAbdullah Financial District

• Availability of a well-developed internal and external communications network. •Plentiful,readilyavailablenaturalresources,rawmaterialsandenergyneededfor

manufacturing and industrial development

Foreign Ownership

100%

CorporateTax

Full Repatriation

20% 5%

24

20

24

Public Universities

Private Colleges

Vocational Colleges

10

Where Great Brands Invest

Polymer Synthesis Laboratory at King Abdullah University of Science and Technology (KAUST) © KAUST 11

12

The EconomySaudi Arabiais the world’s 20th largest economy

The Kingdom boasts some of the lowest energy prices for investment projects.

Market AccessThe Saudi Arabian economy has grown very strongly in recent years. The strong economic performance has enabled the Saudi government tocarryoutmassivefiscalspending todiversify theeconomicbasehorizontallyandvertically,expandtheabsorptiveand productive capacities of the national economy and enhance competitiveness. Driven by these efforts, the non-oil sector, ledby manufacturing, construction, transportation and trade, hasgrown by 6.38% and 5.07% while accounting for around 55.7% and 56.5% of real GDP in 2013 and 2014 respectively.

Key Economic Indicators

It has a continuously expanding domestic market (annual population growthof2.5percent),whichisaddingtoayoungandconsumingpopulationwithstrongbuyingpower.WithexcellentaccesstoMENAmarkets,aswellastheadvancedandemergingeconomiesofnearbyEurope,AsiaandAfrica,marketexposureforSaudi-basedprojectsisnotonlyvastbutalsohighlydiversified.Headlineinflationremainssubduedat2.0%inFy2015/16,andwilleasetoa‘steadystate’of2.45%inFy2016/17.Areputationforastrong,stablegovernmentwithconsistentlylargebudgetsurpluses,a stable banking system and a stable currency all combine to offer investors a business-friendly environment. The Kingdom’s economy ranks 4th in the world for macroeconomic stability,theeconomyhasgrownverystronglyinrecentyears,benefittingfromhighoilpricesandoutput,strongprivatesectoractivity,andincreasedgovernmentspending.Theprivatesector

is playing an increasingly larger role in the Saudi economy – it now accounts for 39.5 percentofthegrossdomesticproduct(GDP).Thesectorisexpectedtocontinuegrowing,especially as Saudi Arabia opens its doors further to foreign investment.

Theworld’s 17th largest exporterand 29th largest Importer

Total Population 2015Population Growth Rate 2.55%Total Population 30,8millionGDP Growth at constant prices 3.35%CostofLivingIndex(Inflation) 2.3%SAMAForeignReserves $US 602 billion (Feb. 2016)Per Capita GDP at current prices $US20,703(2015)GDP per sector-Oil 25.45% (2015)- Private Sector 55% (2015)- Government Sector 18.55% (2015)

Public Debt in $US Trillions

GERMANYGERMANY 2.92.9

CHINACHINA 2.12.1

INDIAINDIA 0.8650.865

RUSSIARUSSIA 0.1680.168

KSAKSA

00 22 44

0.0880.088

Debt Level ($US T)

KSA #1(Lowest)of G20

Public Debt in $US Trillions

CHINACHINA 8.88.8

INDIAINDIA 6.86.8

INDONESIAINDONESIA 5.85.8

KSAKSA 4.34.3

00 55 1010

Average Annual GDP ~Groeth 2008 - 2014

KSA #4in

G20

Current Account Balance as % of GDP

KSAKSA 10.3110.31

GERMANYGERMANY 7.397.39

KOREAKOREA 6.336.33

RUSSIARUSSIA 3.,23.,2

CHINACHINA

00 55 1010 1515

2.122.12

Current Account Balance as % of GDP

KSA #1(Lowest)of G20

Loweroilpriceshadasignificant impacton thecompositionofKSA’sGDP in2015.3.35%economicgrowthin2015underpinseconomicdiversificationandthegrowingcontributionofthefinancial,manufacturing, transportation,constructionandwholesale/retail sectors to theeconomy. The private sector’s impact is highlighted in the Table below – showing the growing sectors that are compensating for the reducing GDP contribution from oil.

SaudiArabiahas largefiscal reservesand low levelsofdebt thatwill enable thekingdomto avert crisis that have been triggered by oil prices in the past. The kingdoms vast foreign currency reserves are important in allowing the Kingdom to compensate for the lower oil revenues.Asof February2016, total reserves stoodat $602billion*

Economic Sector 2015 % of GDP

Population Growth Rate 2.55%Total Population 30,8millionGDP Growth at constant prices 3.35%CostofLivingIndex(Inflation) 2.3%SAMAForeignReserves $US646billion (Sept 2015)Per Capita GDP at current prices $US20,703(2015)

Source: IMF* SAMA

13

14

National Investment Plan SAGIA,incoordinationwithanumberofSaudiministries,have launched the National Investment Plan (NIP) where variousconfirmedinvestmentopportunitiesinthekingdomhave been consolidated under one program. The NIP is a new positive phase of investment aimed at unlocking the Kingdom’s potential,creatingawin-winenvironmentforbothinvestorsandSaudi Arabia.The NIP aims to transform the investment landscape to:

• Diversify the economy• Build the knowledge base• Enable high productivity employment•Maintaineaseofdoingbusiness

AtpresentSAGIAhaveidentifiedover90projectsthroughtheNIPinthehealthcare,transportation and Industrial parts and equipment sectors. These are the sectors poised for major growth and opportunities in every sub-sector and at every step of the value chain.

HealthcareSaudi Arabia is planning one of the largest healthcare expansions in the world. The kingdomsMinistryofHealthplansanannualspendofaprox$18.5billionoverthenext10years. In2013thetotalsizeofthehealthcareindustrystoodat$23billion,withimportsaccounting for 65% of the industry. The sector will offer considerable opportunities acrossthevaluechain,withanestimated$1.6billionbeingspentannuallyoverthenext10yearsonMedicalequipmentanddevicemanufacturing.WiththeMiddleEast’slargestmarketofhealthcareconsumersandanaging,yetaffluentpopulation,there’sanunprecedentedopportunityforinvestorstobenefitfromthesenewdevelopments.The investment strategy is to build domestic capability for the manufacture of medical devicesandpharmaceuticals,whichwillofferbothhighqualityjobopportunitiesandenhance the kingdoms knowledge pool. Such investments will require strong private sectorpartnershipsaswellasastrongprivatesectorpresenceoverall,tosustainandcapitalize on expected demand.

TransportSAGIAhasidentifiednumerousinvestmentopportunitieswithintheTransportationSectorbetweentheBaseEconomy&EconomicCities.Majorinvestmentsintopublictransporttotaling upwards of $141 Billion is anticipated over the next 10 years. These include:

90 Projects identified through the NIP

15

Rail:PlannedprojectsincludetheLandBridgeProject,a950kmraillinkbetweenJeddah-Dammam,a2,400kmMineralLineProjectrunningnorthtosouth;connectingRiyadh,RazAzour,HazmAl-JalamidandQurayyat.TheLightRailTransitSystemswithincitiessuchasRiyadh,Jeddah,Dammam.MakkahandMedinaarebeingplannedand developed. Plus projects to connect the East & West CoastandtheKingdomwithBahrain,QatarandtheUAE.Sea Ports: Some of the opportunities include 2 ports construction and operations in King Abdullah Economic City andJizanEconomicCity,thedevelopment&administrationofLogisticsParkadjacenttoYanbuCommercialPort,anda2nd Container Terminal in Jubail Commercial Port.Air:Majorairaviationdevelopmentsaretakingplace;air operators are sought to drive expansions to KSA’s air

transportinfrastructure.Forexample,significantupgradesarecurrentlyunderwayatMedinaAirport,anewCargoVillageisbeingplannedforDammamairport.Aspartofpromotingtheprivatesector,thefirstplannedprivateairportiscurrentlyinprogressinPrinceAbdulAzizbinMusa’edEconomicCity.Road:SAGIAseekstoinvestinroadstoaccommodatebasicdemandgrowth,inadditiontotrafficresultingfromtheestablishmentandevolutionoftheEconomicCities.Accordingtothe9th5yeardevelopmentplan,theMinistryofPlanninghasannounced government spending to increase from the 8th Five-Year Development plan by 97.5% (from SR 51.4 BN to SR 101.5 BN). Some of the opportunities includethedesignandsupervisionofnewconnectionsandexpansions,androadservices including but not limited to Public Transportation services.

Industrial EquipmentThe Industrial equipment and components sector is estimated at USD 15 billion industryinSaudiArabia.Currentlyonly10%ofthisvalueisaddedlocally,leadingthegovernmentandthemajorindustrialstakeholders,suchasAramco,SABIC,SEC,SWCC,tofocusonnurturingaKSAbasedindustrialsector,openingtremendous investment opportunities for local and international manufacturers. They have already kicked off various individual as well as joint localization initiatives for the future aiming to create a local industrial equipment sector in the Kingdom with a goal to increase the level of local content. Aspartofthelocalcontent,forexampleSaudiAramcoistargetingtoincreaseitsshare of business channeled through local manufacturers from 25% to 70% by 2025,fortheirtargetedcategoriessuchassteelandpiping,drillingequipment,andstaticequipment.Moreover,SABICaimstoincreasetocollaboratewithkeystakeholderstopromotelocalizationofequipmentandparts.Overall,theseambitious initiatives by the country’s major stakeholders are considered key enablersfortremendousinvestmentopportunitiesinthefutureforOEM’swillingtoinvest in a rapidly growing and sustainable industrial sector.

Major investments into public transport totaling upwards of 141$ Billion

16

UtilitiesAsoneoftheworld’slargestoilproducers,SaudiArabiacontrolssomeofthemainelementsthatdriveelectricitycost,keepingitandotherutilities’atrelativelylowcost.SaudiArabia’sutilitiesproducemoredesalinatedwaterthananywhereelseintheworld,and reliable electricity from the kingdom’s vast oil and gas reserves. Saudi electricity is generatedfromnaturalgas(38%),crudeoil(34%),diesel(22%)andheavyfueloil(6%).Publicly and privately operated desalination plants provide around half of Saudi Arabia’s freshwater;40%comesfromgroundwater(aquifers)andtherestcomesfromsurfacewater and reclaimed wastewater. The cost of water for business is based on usage and it is charged at SAR 6.0 [US$1.6] per cubic meter for water or SAR 9.0 (US$ 2.4) for combined water and sanitation per cubicmeter*

State-of-the-art communicationsIn2004,SaudiArabiabecameoneofthefirstcountriesintheregiontolicense3Gservices,and,inSeptember2011,itwasoneofthefirstcountriestointroduceLTE(4G)services,andthetelecommunicationssectorcontinuestogrowataremarkablerate.Thekingdoms 17,000-kilometerstate-of-the-artfiberopticnetworkconnectingallmajorcitiesintheKingdom offers massive bandwidth capacity at affordable rates.

Consumption categories (Kwh)

Residential (Halalah/Kwh)

Commercial (Halalah/Kwh)

Agricutural & Charities

(Halalah/Kwh)

Governmental (Halalah/Kwh)

Industrial, private educational

facilities, private medical facilities

(Halalah/Kwh)

1 - 2000 516 10

32 18

2001 - 4000 10

4001 - 6000 2024 12

6001 - 8000 30

More than 8000 30 16

Infrastructure

17

TheMinistryofTelecommunicationsandInformationTechnologyoverseesallmodern communications technologies in the Kingdom. The major provider in Saudi ArabiaisthepartiallyprivatizedSaudiTelecommunicationsCompany(STC),oneof the largest telecom services operators in the world. Bythefirstquarterof2015therewere51.8millionmobilesubscriptionsinthekingdom,withapenetrationrateof167.5%.ThenumberofInternetuserscontinuestoriserapidly,reachingc20.1millionattheendofQR12015–thisrepresents a population penetration of 64.9%.

TransportationSaudi Arabia boasts a wide transport network with a particular strength in road andairporttransportation.Roadpenetration,forexample,isapprox..9,600kmper1,000people.Thequalityofinfrastructureisalsosolid,withSaudiArabiaranking17th in the WEF infrastructure quality score. Driven by economic and population growthaswellasrapidurbanization,theKingdomisnowinvestingintoamassiveexpansion of its urban transport system (metros and buses) as well as inter-urban (freightandhighspeedrailways).Inparallel,theKingdompursuesastrategicgoal of increasing infrastructure quality by 300% by 2024. Saudi Arabia has a well development sea transport network developed primarily to support the transport of petrochemicals. Saudi Ports Authority is the ports managementorganizationinthecountry,overseeingtheoperations.The major ports in the country

Arabian Gulf: Red Sea:• Dammam • Jeddah• Jubail • Yanbu’ al Bahr• Ras Tanura • Al Lith• Khafji • Duba• Khobar • Rabigh• Ras Al-Khair • Jizan

• Farasan (city)

Fromairpassengerstoshippinghighvalueproducts,45millionpassengersand568,000tonnesoffreighttravelledto,fromandwithinSaudiArabia.Morethan81,800scheduledinternationalflightsdepartSaudiArabiaannually,destinedfor81airportsin45countries.Domestically,109,200flightsmakeover13.4millionseatsavailabletopassengers,destinedto26airports.*KSA’s four principal airports are:•KingAbdulazizInternationalAirport(KAIA),Jeddah

•KingKhalidInternationalAirport,Riyadh

•KingFahdInternationalAirport,Dammam

•PrinceMohammadBinAbdulazizInternationalAirport,Medina

. * Source: Benefits of Aviation Saudi Arabia 2011 IATA18

Market Access-Hub to Dynamic MarketsSaudi Rail, Ports & Airports Infrastructure proviedes companies

with market access to over 1.5 billion people

Riyadh

19

20

Saudi Arabia offers investors a wide range of property solutions with a large supply ofindustriallandandcommercialrealestate,acrossthekingdomfromgreenfieldtobrownfieldsites.TheKingdomhasintotalupwardsof40industrialandeconomiccitiesmanagedbytheSaudiIndustrialPropertyAuthority(MODON),theRoyalCommisionforJubail and Yanbu (RCJY) and the Economic Cities Authroity (ECA).Saudi Arabia has a well development sea transport network developed primarily to support the transport of petrochemicals. Saudi Ports Authority is the ports management organization in the country,overseeingtheoperations.

National Industrial Clusters ProgramSaudiArabia’sIndustrialClustersprogramissupervisedbytwogovernmentagencies,theMinistryofCommerce&IndustryandtheMinistryofPetroleumandMinerals.Industrial Clusters is catalyzing the development of export-oriented and long-term globally competitivemanufacturingclustersthatleverageKSA’senergy,petrochemicalandmineral resources. The aim is to diversify the economy and create substantial numbers of rewarding jobs.Four industrial clusters are being developed:

• Automotive•MineralsandMetalProcessing• Pharma & Biotech• Plastics and Packaging

TheNICDPisalsoresponsibleforprovidingsupportinidentificationandactivationofkeyenablers,drivingprocessesandcoordinatingwithothergovernmentagencies.ThNICDPalso facilitates and helps potential investors evaluate investment opportunities. www.ic.gov.sa

The Royal Commission for Jubail and YanbuTheRoyalCommissionforJubailandYanbu(RCJY)wasestablishedin1975,asanautonomous organization of the Saudi Arabian Government. The RCJY is responsible for the management and development of major industrial sites at Jubail and Ras Al Khair on the Arabian Gulf coast and Yanbu and Jazan on the Red Sea coast. The Royal Commissionaimstopromote,developandenablepetrochemical,chemical,mineralsandtheir downstream industries.JubailIndustrialCitylocated100km(60mi)northwestofDammam,isoneoftheKingdoms most important ports. The site of the world’s largest petrochemical complex and since the 1970s has been custom built for major primary & secondary industries. In additiontorefinedoilproductsandsteel,petrochemicalproductssuchasplasticsandfertilizersaremanufacturedandexported.Otherindustrieswerecreatedtomanufactureconsumer goods and support the activities of the primary oil- and gas-based ventures.

Property Solutions

Yanbu is located in the coastal area of the Red Sea about 350 Kilometers north-west of Jeddah. This city which is just over 30 years old has become a center for modern industries. The area allocated for industrial use is about two-thirds of the city which is 185 squarekilometers.Currently,thereare32facilitiesforthehydrocarbon,petrochemicaland mineral industries as well as 51 facilities for light and support industries. www.rcjy.gov.sa

Saudi Industrial Property Authority (MODON) TheSaudiIndustrialPropertyAuthority(MODON)wasestablishedin2001.MODONisresponsible for the development of industrial cities with integrated infrastructure and services.Theirmissionistoundertakeasanindependentpublicagency,theregulationand promotion of Industrial Estates and Technology Zones in Saudi Arabia on both public and private industrial lands and to encourage the private sector to become involved in thedevelopment,operationandmaintenanceofIndustrialEstatesandTechnologyZonesMODONhasestablishedindustrialcitiesinvariousregionsoftheKingdom,withanareaofmorethan178millionsqm,andiscurrentlyoverseeing34existingandunderdevelopmentcities.InadditionMODONhasintroducedareadymadefactoriesconcept in most of the industrial cities regions targeting the small-medium enterprises (SMEs).Eachindustrialcityhasanon-siteadministrationtohandletheday-to-dayneedsof investors and oversee the site development process.www.modon.gov.sa

Economic Cities AuthoritySaudiArabiahasestablishedfournewEconomicCities,eachcityisplanned,developedand operated by a master developer from the private sector. Each city is an economic hub,designedtomaximizeinvestmentpotentialanddeliverconsiderableadvantagestocompany’s located there. www.eca.gov.sa

Economic City 2015 % of GDP

King Abdullah Economic City

181 Millions

Pharmaceuticals - FMCG - Bulding Marterials - Healthcare - Education & Training - Logistics - Residential & Tourism - Automotive - High & Clean Technology - Sea

Jazan Economic City

102 Millions

Sea port - oil Refinery - Petrochemical - Mining - Heavy Industries - Food Processing

Knowledge Economic City 4.8 Millions Knowledge Based Industries - Healthcare - Hospitality

&Tourism - Education - ICT

Prince Abdulaziz bin Mousaad Economic City

156 Millions

Dry Port - Transportation & Logistics - Light & Medium Industries - Argo-related & Food Processing Industries

21

22

King Abdullah Economic CityKing Abdullah Economic City (KAEC) was established in 2006 by a consortium of global realestatemajors,includingEmaarPJSC,anumberofhigh-profileSaudiinvestorsandgovernment bodies. KAEC is strategically located on the Red Sea coast with access to theworldbysea,landrailandair.TheCityislocatedbetweenmajorshippingroutestoEurope and Asia. KAEC is one of the largest and most important economic projects run by the private sectorintheMiddleEast,onanareaof181millionsqm,itisbeingdevelopedtobecomeanintegratedcitythatbenefitsfromapromisinginvestmentenvironment.KAECwilleventuallybeservedbyHaramainhigh-speedtrains,whichwilllinkthewesterncitiesofMedina,JeddahandMecca.Itisthelargestofthefournew,economiccitiesinKSAandSAGIAisleadingthedevelopment of these cities. www.kaec.net

Jazan Economic CityJazan region is one of the Kingdom’s most vibrant and promising provinces. Jazan Economic City (JEC) is strategically located along an important sea route connecting Europe,AfricaandAsia,withafocusontheenergyandmanufacturingindustries.OthercitiesincludePrinceAbdulazizBinMousaedEconomicCity(PABMEC),locatedinHail,north-centralKSA,andMedina’sKnowledgeEconomicCity(KEC)whichwilltargetR&D and other industrial support activities.

The Economy

Hail

Qasim 1Qasim 2

Zulfi

Hafr Al Batan

Dammam 3Dammam 1-2

Al Ahsa

Al Ahsa - 1Al Ahsa - 2

SudairShaqra’a

Riyadh 1 - 2Durumah

Riyadh 3

Al KharjMakkah

Jeddah 4Jeddah 3

Jeddah 1-2

Rabigh

AsirAsir 2

Jizan

Baha 1 - 2

Madina

Yanbu

Tabouk

Al JawfArar

Najran

Established Economic Cities

Industrial Cities in allRegions of the KingdomIndustrial Cities in allRegions of the Kingdom

KingAbdullah

Economic City

KingAbdullah

Economic City

KnowledgeEconomic City

KnowledgeEconomic City

Prince AbdullahBin Musaed

Economic City

Prince AbdullahBin Musaed

Economic City

JizanEconomic City

JizanEconomic City

Under Development Economic CitiesOasis Cities

23

Saudi Arabia has a low tax burden and is in third place in the global list of 189 countries ranked on the ease of paying tax.

Foreign–ownedcompaniesenjoyallthebenefits,incentives,guarantees,andsupportofferedtoSaudi-ownedcompanies. These include:• 20%taxoncorporateprofits,withanylossescarried

forwardindefinitelytooffsetfuturetaxes• Nopersonalincometax,novalueaddedtax,nosales

tax,nolandtaxandnopropertytax.• Fullrepatriationofcapital,profit,anddividendsallowed,

subject to a 5% withholding tax• Minimalrestrictionsoncurrencyconversion,exchanges

and transfers• Tax exemption on earnings from exports• Tax credits on R&D investments• Thegovernmentalsograntssignificanttrainingand

employment-relatedtaxconcessions,upto50%ofeithertrainingcostorpayroll,tocompaniesoperatinginanyofthesixlessdevelopedregions:Hail,Jizan,Najran,AlBaha,AlJouf,andtheNorthernRegion.

Importing and ExportingDutiesThe general rate of import duty is 5%. Some limited numbers of products have tariff rates of either 12% or 20%. Customs duty exemption is available on all authorizedimportsforindustrialestablishments,equipment,machinery,tools,spareparts,rawmaterialsorpackagingmaterialsiflocalsupplydoesnotexistorthelocalsupplyisnotuptothespecificationsofthemanufacturers.

Duty Drawback for Export“DutyDrawback”isarefundavailableinSaudiArabiatoimporters/exportersofraw material imports that are processed in Saudi Arabia and re-exported as more finishedproducts.Toqualifyforthis,importersmustinformCustomsatthepointof entry that the imported goods are raw materials for manufacturing. The importer willpaytheduty,butthisiskeptinbondandrefundedonre-exportofthegoods.TheimportorneedstoprovidetheCustomsImportDeclaration,areceiptforpaymentofdutyontherawmaterials,theCertificateofOrigin,andacopyoftheinvoicetothebuyercertifiedbytheSaudiChamberofCommerceandIndustry.

Taxation and Duties

G2O corporation Tax rates 2015’Saudi ArabiaRussiaUKTurkeyKoreaChinaIndonesia CanadaSouth AfricaGermanyMexicoAustraliaItalyFranceIndiaBrazilArgentinaJapanUSA

20%20%20%20%24%25%25%26%28%29%30%30%31%33%34%34%35%36%40%

Full Repatriation

of Profits

No VAT

or GST

NoPersonal

Tax

No land or Property

Tax

24

Technovia TechnoviabringstogetherSaudiAramco,whichwillprovidefunding,andsomeofSaudiArabia’sleadingresearchinstitutions,suchastheKingAbdullahUniversityofScienceandTechnology(KAUS),KingAbdulazizCityforScienceandTechnology(KACST),andtheKingFahdUniversityofPetroleumandMinerals.Technoviawaslaunchedwiththeaimoffurtheringtechnologyinnovationandcommercializationcapacity,tocreateabroaderinnovation ecosystem.

Human Capital Ahighlyskilledworkforceisthefoundationforastrong,vibrant economy. This is why Saudi Arabia is investing heavily in education and training programs to enhance the capability of the workforce and foster the development of a knowledge based economy.The kingdom is the 8th largest investor in education and is continuing to increase its commitment in this strategic area and in enhancing the capability of its workforce. Saudi hosts 24publicuniversitiesand20privatecolleges,24vocationalcolleges with a further 80 to be built.

Providingskilledlabortoindustry,theTechnical&VocationalTrainingCorporation(TVTC)isattheheartofvocationaltraininginKSA.TVTCisthedriverofvocationalandtechnical training in Saudi Arabia and works to provide skilled manpower to the industrial sectors. By the end of 2015 the annual number of vocational-course diploma graduates is expectedtoreach450,000.

Saudi Arabia has a young population with 49.9% under 25 years of age

Riyadh Techno Valley Riyadh Techno Valley is dedicated to attracting local and global investment in the field of technological research. It is one of the contributions of King Saud University in building partnerships with public and private sectors in knowledge transfer.The Human Resources Development Fund The Fund was established to aid those companies involved in the preparation, training and employment of the national workforce in the private sector. It provides financial support for the training and employment of Saudi citizens.

25

26

King Abdulaziz City for Science and TechnologyKingAbdulazizCityforScienceandTechnology(KACST)isanindependentscientificorganization,itisboththeSaudiArabiannationalscienceagencyanditsnationallaboratory.Thescienceagencyfunctioninvolvesscienceandtechnologypolicymaking,datacollection,fundingofexternalresearch,andservicessuchasthepatentoffice.KAUST launched the Joint Centers of Excellence Program (JCEP) and the Technological InnovationCentersProgram(TICP),inassociationwithanumberofSaudiandinternational Universities and academic centers resulting in establishing 16 Joint Centers of Excellence and 5 Technological Innovation Centers.Jointscientificcenterswereestablishedwithworldrenownuniversitiesandresearchcenters including the Center for Complex Engineering Systems in association with the MassachusettsInstituteofTechnology(MIT),theJointCenterofExcellenceinSpaceandAeronauticsincollaborationwithStanfordUniversity,theCenterofExcellenceforPetrochemicalsResearchwiththeUniversityofOxford,theCenterofExcellenceinNanotechnologywithIBM,andtheCenterofExcellenceinNano-manufacturingandApplications Research with Intel in addition to other a number of other centres.

King Abdullah Foreign Scholarship Program Central to Saudi Arabia’s drive to become a knowledge-based economy over the last 10 years has been the King Abdullah Scholarship Programme (KASP). The number of studentsbenefittingfrominternationalscholarshipshasgrownsignificantlysinceKASPwascreatedin2005.Inthebudgetfor2015,theMinistryofFinanceannouncedthatSR22.5bn ($6bn) had been allocated for the year for the fund.Studentsarestudyingonspecificcoursesofferedbyapprovedinstitutionsin23countries,withtheUSthemostpopulardestination

Area of Study of the 171,078 Students

Student Numbers

Area of Study of the 171,078 Students

Student Numbers

Training Teachers 1,325 Informatics 18,853Science Education 4,127 Engineering 33,264Arts 1,857 Production / Manufacturing Industries 385Humanities 6,820 Architecture & Construction 3,058Social Science 3,220 Agri / Forestry & Fishing 97Press & Media 1,001 Veterinary Medicine 29Business Management 49,197 Health 26,805Law 4,497 Transport Services 1,079Life Sciences 3,913 Social Services 2,015Physical Sciences 3,803 Personal Services 108Maths & Statistics 1,878 Security Services 575Environmental Protection 271 Other 2,899

Country of Study Students Nos MaleNorth America 112,647 86,560European Countries 25,332 16,579Other Arab Countries 17,030 10,720Australia 11,542 9,489Asian Countries 4,527 3,641Overall Totals 171,078 126,989

King Abdullah University of Science and Technology (KAUST)Isaninternational,graduate-levelresearchuniversityandthefirstmixed-genderuniversity campus in Saudi Arabia. Founded in 2009 by former ruler King Abdullah Bin AbdulazizAlSaud,theuniversityhasover100nationalitiesoncampus,advancingscience and technology through distinctive and collaborative research integrated within graduateeducation.Asanindependent,merit-basedinstitution,KAUST’spioneeringmatrix structure of academic divisions and interdisciplinary research centers enables top researchersfromaroundtheglobetoworktogethertosolvechallengingscientificandtechnological issues. TheKAUSTglobalresearchandeducationnetworkssupportdiversetalents,bothonitscampusandatotherpremieruniversitiesandresearchinstitutions,throughcollaborativeresearchagreements,grants,andstudentscholarshipprograms.OneofitskeyentitiesistheInnovationandEconomicDevelopmentDepartment.Betweenindustrycollaborations,aTechnologyTransferOffice,anEntrepreneurshipCentreandaResearchandTechnologyPark,thedepartmentprovidesstrategicallyconnectedprogramsthatmaximizeKAUST’scontributiontotheeconomicdiversificationof the Kingdom. It also supports Saudi-based startups and international spin-ins with a dedicated Innovation Fund that invests in high-tech startups from seed to early-stage (up to $2 million).

27

28

Financial SupportLow cost financingThe Kingdom of Saudi Arabia offers access to multiple industrial loans and equity partners.FundssuchastheSaudiIndustrialDevelopmentFund,thePublicInvestmentFund and the Arab Fund for Economic and Social Development are general and target multiple sectors.

Saudi Industrial Development Fund SaudiIndustrialDevelopmentFund(SIDF)provideslow-cost,mediumtolong-termloansfor new industrial projects and expansions to existing schemes. The SIDF loan programme:

•Canfinanceupto50%ofprojectcosts(fixedassets,pre-operatingexpensesandstart-upworkingcapital),involvingupto$53millionforcompaniesand$160millionfor joint-stock companies

• Allows repayment periods of up to 15 years•Offersinvestorsatwo-yeargraceperiodbetweenthestartofindustrialproductionandthefirstrepayment

•Strengthensprojectsbyofferingadviceonadministration,marketingandtechnicalmatters

Public Investment FundSince 1971 the PIF has provided over $20 billion of medium- and long-term loans and guaranteesforindustrialandcommercialprojects.AdministeredbytheMinistryofFinance,PIFloansareforprojectsnotcoveredbycommercialfundingandcanbeforupto $1.3 billion. Thefundseekstoinvestthroughequity,loansorguarantees,andthroughallocationsofpublicfundstospecificprojects.ThePIFinvestsintelecoms,aerospace,energy,greentechnologies,andsecuritywithaparticularfocusonhousingfinance,renewableenergyand information technology.

Can Finance upto

50%Project Cost

Grace Period

2YearsYears

Repayment Period

15

29

TAQNIA, Taqnia,isagovernmentorganizationownedbythePublicInvestmentFundthatinvests in select local and international R&D projects that have the potential to further the country’s economic growth and self-reliance. It’s objectives include technologytransfer,commercializingtechnology,supportingsustainablegrowthoftheGDP,diversifyingtheeconomy,andcreatinghighqualityjobs.Asofmid-2015,TAQNIAwasworkingtodevelopandimplementatotalof29businessopportunitiesacrosstheKingdom,collaboratingviajointventureswithinternationaltechnology leaders as well as local industrial investors

The Human Resources Development FundThe Human Resources Development Fund (HRDF) was established to aid those companiesinvolvedinthepreparation,trainingandemploymentofthenationalworkforceintheprivatesector.Itprovidesfinancialsupportforthetrainingandemployment of Saudi citizens by providing the following:Forthequalifiedemployee(whohasbeentrainedbyanytraininggovernmentorprivate institution):

• 3-months support during the training period of USD 133 paid to the enterprise for training them

• 3-months support after training period: payment of 75%of the employee’s salary capped at USD 400 monthly

Forthenon-qualifiedemployee(whohasn’tbeentrainedbyanytraininggovernment or private institution):

• 12-months support during in-house training of USD133 paid to the enterprise for training them

• 12-months support during In-house training: payment of 75% of employee’s salary capped at USD 267 monthly

• 24months support during the period of training outside the company: payment of 75% of employee’s salary capped at USD 267 monthly

• 12-months support during the period after training: payment of 50% of employee’s salary capped at USD 533 monthly

30

Trade AgreementsWorld Trade Organisation (WTO) In2005,SaudiArabiabecamethe149thmemberoftheWorldTradeOrganization.Nowcomprising161members(asofApril2015),theWTOhelpsproducersofgoods&services,exporters&importerstoconducttheirbusiness.OverrecentyearsKSAhasfurtherliberalizeditstraderegimetoofferanopen,supportive&stableenvironmentfortradeinaccordancewithWTOrules.

Gulf Cooperation Council (GCC) SaudiArabiaisafoundingmemberoftheRiyadh-basedGulfCooperationCouncil(GCC),whoseothermembersaretheUnitedArabEmirates,Bahrain,Oman,QatarandKuwait.TheGCCCustomsUnionwaslaunchedin2003,eliminatinginternaltariffs,enablingthefreemovementoflaborandcapitalinternallyandcreatingaunified5%externaltariffonmostimportedproducts.Thefinalphaseofthiscustomsunionwillbeimplementedby 2015. GCC countries have signed free-trade agreements with Singapore and the European Free Trade Association.

Greater Arab Free Trade Area (GAFTA) SaudiArabiaisalsoafoundingmemberoftheGreaterArabFreeTradeArea(GAFTA),establishedin1997.ItsmembersaretheGCCstatesplusAlgeria,Egypt,Iraq,Jordan,Lebanon,Libya,Morocco,Palestine,Sudan,Syria,TunisiaandYemen.

Bilateral Investment Treaties: SaudiArabiahassignedbilateraltradeandinvestmentagreementswithAustria,Belarus,BelgiumLuxembourgEconomicUnion,China,Czech,France,Germany,India,Indonesia,Italy,Korea,Malaysia,Philippines,Singapore,Sweden,Switzerland,&Turkey.IthasalsosignedbilateralinvestmenttreatieswhicharenotyetinforcewithAzerbaijan,Egypt,Japan,Spain,Taiwan,Ukraine&Uzbekistan

31

32

Quality of LifeExpatriates account for approximately a quarter of Saudi Arabia’s total populationPoliticallystable,well-orderedandwithverylittlecrime,SaudiArabiansocietyplacesgreatemphasisonfamilylife,safety,hospitalityandtradition.Generoustax-freesalaries,luxurioushousing,paideducationforyourchildren,freeflightticketsbacktoyourrespectivecountry,andtheminimumstandardof30dayspaidvacationareallbenefitsofferedtoWesternexpatriates. WhenworkingintheKingdom,expatriatesoftenchoosetoliveinpurpose-builtgatedcommunities,compounds.Thisluxurioushousingissafe,comfortable,andoftenwithextensiveon-sitefacilitiessuchassupermarkets,swimmingpools,bowlingalleys,gymsandeven golf courses.There are numerous private schools which cater to the expat community. A portion of themaregovernedbyembassies,whileothersareprivatelyorganizedandhostmultiplecurricula.UnlikeSaudipublicschools,whereboysandgirlsaresegregated,internationalschools are usually co-educational.SaudiArabiahasfirst-classhealthfacilities,bothpublicandprivate.Everymajorcityhas both public and private facilities with plenty of well-trained staff and state-of-the-art equipment.Englishiswidelyspoken,especiallyintheprivatesector:Manydoctorsandmedical personnel are foreigners or Saudis nationals who received some of their training abroadSaudiArabiaisashoppersparadise,ithaseverythingfromvast,gleaming,air-conditionedmallstovibrantsoukssellingspices,andtraditionalarts&crafts.Thecostoflivingisveryreasonableconsideringthat,housingandtransportationareapartofmostexpatssalarypackages,verylittlemoneyneedstobespenttoliveinthekingdom.SaudiArabiaoffersspectacularscenerywhenyouventureintothedeserts,themountainsofAbha,orthebeachesalongthecoastofthePersianGulfandtheRedSea.AmongSaudiArabia’shistoric,culturalandscenicattractionsareancientcastles,hugesanddunesandthe spectacular coral reefs.

33

Success Stories

GEhasalonghistoryintheKingdom,havingbeenhereforover80yearsandinitially involved in some of the earliest oil explorations.InMarch2015GEChairmanandCEOJeffImmelt,announcedUS$100millioninnewprogramsinthekingdomthatwillfurtherthecompany’slocalizationefforts,buildresearchandinnovationcapacity,andcreatejobsinadvancedmanufacturingand software analytics.This new investment adds to their US$1 billion commitment announced in 2012 and furtheralignsthecompanywiththecountry’sVision2024andNinthDevelopmentPlantodiversifytheeconomy,driveindustrialization,manufacturing,andbuildthenext-generation of human capital skill-sets in materials and data science.The additional investments includes:

• Expansion of manufacturing capability in Saudi for the region with GE’s HA gas turbinesatGEManufacturing&TechnologyCenter(GEMTEC)inDamman,

•ExpansionofOil&GasmanufacturingcapacitycurrentlyproducingPressureControlequipmentincludingwellheadsandothercontrol&flowequipment.

• Plans for a new LED manufacturing facility Saudi GE Technology & Innovation Center to be home to the ‘Hot and Harsh’ Global Research & Development ProgramandSoftware&AnalyticsLabwithaMonitoring&DiagnosticsCenteratGEManufacturingTechnologyCenter

• Collaborations with Saudi customers & leading universities on energy efficiency,additivemanufacturingandoilandgas.

“Companies like ours have to be an investor, we have to help with economic diversification. Over the last decade we’ve made a tremendous amount of progress in that area helped by good guidance across the government, SAGIA and all ministries who have been very clear with respect to their expectations; we believe that we’ve gotten a good return on our investment for our shareholders too.”

John G. RiceVice ChairmanGE

34

JohnsHopkinsMedicine(JHM),headquarteredinBaltimore,Maryland,isa$7.7billionintegrated global health enterprise and one of the leading academic health care systems in the United States. ThefirstsuchcollaborationintheKingdomofSaudiArabiawasformedasanaffiliationwith King Khaled Eye Specialist Hospital (KKESH) in Riyadh in 2010. This was to help KKESH train a new generation of leaders in ophthalmology to treat the people of Saudi Arabia and neighboring Gulf countries. The second collaboration was when Johns Hopkins Medicine(JHM)signedahealthcarejointventurewithSaudiAramco,in2014.Theresultingindependentcompany,JohnsHopkinsAramcoHealthcare(JHAH),istrulyuniqueintermsof its scope and impact. AspartoftheJointVenture,JohnsHopkinsMedicineandSaudiAramcobothhaveanindirect ownership interest in the Saudi-registered company JHAH. The purpose of the agreementistoprovidemedicalservicestoSaudiAramco’sapproximately360,000employeesanddependents,educationforitscliniciansandotherhealthcareprofessionalsand opportunities for research collaborations. ThemainJHAHhospital,locatedinDhahran,isastate-of-the-art,330-bedreferralinstitutionthathasfiveintensivecareunits(cardiac,medical,surgical,pediatricandneonatal)inadditiontonumerousstep-downunits.JHAHalsooperateshealthcentersinAbqaiq,alHasa,RasTanuraand‘Udhailiyah.JHAHworkswithanetworkofmorethan80medicalproviderscontractingwithprimary,secondaryandtertiaryfacilitiesKingdom-wide.Additionally,JHAHoperatesremoteareaclinics,providingaround-the-clockemergencymedicalsupporttoSaudiAramcooperations.JHAHemploys5,200people-3,000SaudiAramcoemployeessecondedtoJHAH,600JHAHdirecthiresand1,600contractedemployees.TheaffiliationwithKKESHbroughttogethertwoinstitutionsthatarebothworldleadersin treating and curing eye disease. The Wilmer Eye Institute at Johns Hopkins is an internationally renowned eye institution that diagnoses and manages complex medical and surgicaleyediseaseandservesasapreeminenteyecareprovider.With250beds,KKESHis the largest ophthalmic tertiary referral center in the Kingdom of Saudi Arabia. The goal oftheaffiliationistocombineJohnsHopkins’medicalexpertiseandKKESH’shugevolumeofeyepatientstodeveloptreatmentsforeyediseasesthatafflictpatientslivinginbothcountries and around the world. “Johns Hopkins Medicine is happy to share its 127 years of health care expertise with its renowned partners in Saudi Arabia. The resulting collaborations have opened up great potential to address the most critical health challenges facing the Kingdom and the region.”

Pamela D. Paulk, M.S.W., M.B.A., President/CEO, Johns Hopkins Medicine International (JHI)

35

Honeywell has been delivering innovation technology solutions to Saudi Arabian industries and consumers since the 1970’s. With more than 50% of Honeywell’s productslinkedtoenergyefficiency,theyarehelpingthekingdomtomeetitsenergy challenges.Asoftheendof2015,Honeywellemployedmorethan600+peopleintheKingdom,spreadacrosstenofficesinkeylocationsservingallmarketsegments.Sauditalentis a key contributor to the company’s huge success. There are continuous efforts in placetorecruitanddevelopmoreSaudis,especiallyinengineeringandtechnicalroles. Honeywell operates three joint ventures with local partners. Honeywell Turki ArabiaLtdisajointventurewithATCO,focusingonHoneywellProcessSolutions,Honeywell Building Solutions and Honeywell Technology Solutions. It currently operatesfivesites,Riyadh,Jubail,JeddahandYanbuplusaCustomerSolutionCentre and Engineering Center in Dhahran. UOPManagementServicesLtdisajointventurewiththeJamjoomGroup,focusingontechnicalservicesandtechnicaltraining.Theycurrentlyoperateintwosites,Jeddah and Dhahran. In Dhahran they have a collaborative R&D project with King FahdUniversityofPetroleumandMinerals,operatingaresearchlaboratory.MKCableManagementLtd,wasestablishedin1986andisajointventurewithMKElectric,aHoneywellcompany.Currentlytheyhaveone20,000sqmfacilityinJubail,manufacturingcablemanagementandcabledeviceproducts.Honeywell Automation and Control Ltd is a 100% owned company providing technicalandsalessupportinthehighgrowthregionsofRiyadh,JeddahandDhahran.Elster-Industrial Services Saudi Arabia Ltd is a joint venture with GAS Arabian ServicesbasedinDammam.Thecompanyspecializesinmetering,controlsandapplications for the oil & gas and petrochemicals industries.HoneywellrecentlyinaugurateditsSaudiArabianHQattheDhahranTechnoValley(DTV)-Dhahran.ThefacilityisanR&DCenterwithstateofartintegrationandtraining facilities that can provide support to its customers throughout the region. “We have found that Saudi presents a tremendous opportunity in terms of its local talent potential. The Saudi youth makes up more than 50 percent of the country’s population and this will provide a sustainable pipeline of talent to drive Saudi’s growth and economic diversification”

Norm Gilsdorf,PresidentHigh Growth Regions, Middle East, Russia, Central Asia, Honeywell

SAGIA – here to helpEstablishedin2000,SAGIAwasmandatedasacentralagencyforinwardinvestmentinSaudi Arabia and to help attract investments to serve the development goals and participate inthediversificationoftheSaudieconomy.Wefacilitateintroductionsforinvestorstokeystakeholdersthatincludeaccesstocapital,industrialland,commercialpremisesandfundingsupport.Wecanorganizefact-findingvisitstopossiblelocations/partners/contacts,We offer advice and services to support companies from the initial planning stage through to after care once establishment in the kingdom.SAGIA has created a network of dynamic Business Centers throughout the country in Riyadh,Jeddah,Dammam,Hail,AlMadina,Jizan,Tabuk,andAbha.EachcenterprovidesresourcestohelpcompaniessetupquicklyandefficientlybyprovidingrepresentativesofallrelatedgovernmentdepartmentssuchastheMinistryofLabor,GeneralDirectorateofPassports,MinistryofCommerceandIndustry,Zakatandincometaxationdepartmentandnotary public.

SagiaLocationMap

Kin

g Abdulla

h Road

King Abdullah Road

K

ing Abdullah Road

King Abdullah Road

King Saud UniversityKing Saud University

AN NAKHIL

ITCC

CITC

SAGIA

Takhassusi Street

Takhassusi Street

Takhassusi Street

Takhassusi Street

King AbullahFinancial DistrictKing AbullahFinancial District

King K

halid Road

King K

halid Road

King Khalid Road

King Khalid Road

Nor

ther

n Ri

ng R

oad

Nor

ther

n Rin

g Road

Northern Ring Road

Northern Ring Road

Northern Ring Road

Northern Ring Road

King Fahd Road

King Fahd Road

King Fahd Road

King Fahd Road

Al Imam Saud Ibn Abdul Aziz Road

Al Imam Saud Ibn Abdul Aziz Road

Al Imam Saud Ibn Abdul Aziz

Prince Turki Ibn Abdulaziz Aw

wal Road

Prince Turki Ibn Abdulaziz Awwal Road

Prince Turki Ibn Abdulaziz Awwal Road

Prince Turki Ibn Abdulaziz A

ww

al Road

RiyadhGallery

Saudi Arabia is embarking on an unprecedented and exciting investment program with a compelling portfolio of investmentopportunities.Tofindoutmoreabouthowyourbusinesscanbepartoftheongoingsuccessstory,pleasecontact us.

SAGIA HeadquartersImam Saud Bin Abdulaziz Road - (University Road)P.O.Box5927,Riyadh11432-KingdomofSaudiArabiaT+966112035555,F+966112632894E invest@sagia.gov.sa

www.sagia.gov.sa

Kin

g Abdulla

h Road

King Abdullah Road

K

ing Abdullah Road

King Abdullah Road

King Saud UniversityKing Saud University

AN NAKHIL

ITCC

CITC

SAGIA

Takhassusi Street

Takhassusi Street

Takhassusi Street

Takhassusi Street

King AbullahFinancial DistrictKing AbullahFinancial District

King K

halid Road

King K

halid Road

King Khalid Road

King Khalid Road

Nor

ther

n Ri

ng R

oad

Nor

ther

n Rin

g Road

Northern Ring Road

Northern Ring Road

Northern Ring Road

Northern Ring Road

King Fahd Road

King Fahd Road

King Fahd Road

King Fahd Road

Al Imam Saud Ibn Abdul Aziz Road

Al Imam Saud Ibn Abdul Aziz Road

Al Imam Saud Ibn Abdul Aziz

Prince Turki Ibn Abdulaziz Aw

wal Road

Prince Turki Ibn Abdulaziz Awwal Road

Prince Turki Ibn Abdulaziz Awwal Road

Prince Turki Ibn Abdulaziz A

ww

al Road

RiyadhGallery

www.sagia.gov.sa

www.sagia.gov.sa

investsaudi

investsaudi

investsaudi