SAUDI ARABIA,THE GATEWAY TO INVESTMENT

OPPORTUNITIES IN THE MIDDLE EAST2014

CONTENTS

Saudi Arabia – key indicators.

Saudi Arabia underlying strengths.

Investment in Saudi Arabia.

Foreign trade of Saudi Arabia.

Saudi estimated Budget - 2014.

Reforms to Enhance Saudi Economy.

Towards Better UK–Saudi Relations.

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3

SAUDI ARABIA – KEY INDICATORS 2013

Area: 2000000 km2.

Population: 30 million.

GDP: $745 billion (preliminary)

GDP per Capita: $24847.

GDP Growth: 1.5 % (Current)

3.8% (Constant)

Non-Oil Sector GDP Growth: %7.

Private Sector Growth rate: 9.4%. Exports:$367 billion .Imports:$153

billion. Currency: Saudi Riyal (SR), SR 3.75 = $1.

SAUDI ARABIA -UNDERLYING STRENGTHS

4

Strong GDP growth.

Significant budget surplus .

Price level stability.

Owns 25% of world’s Oil reserves .

Fourth Largest Natural Gas reserve.

The largest economy in the Arab World, and among the top 20 Economies in the world (G20).

The Largest producer of Petrochemicals in the Arab World.

Open economy, a member of WTO.

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SAUDI ARABIA -UNDERLYING STRENGTHS

Cont….

Political stability, member of many Arab & International Organizations.

An attractive environment for investment, among the top 20 recipients of Foreign Direct Investment in the world.

Investment incentives, Income tax free, financial facilities.

Ranked 22 in ease of doing businesses in 2013.

10th largest worldwide Exporter (excluding intra-EU (27) trade).

21st largest worldwide Importer (excluding intra-EU (27) trade).

saudi Arabia

U.A.E Qatar Kuwait Oman Bahrain0

100

200

300

400

500

600

700

800

745

359

183 17377

27

$ Billion

Saudi’s GDP among Gulf countries

SAUDI ARABIA -UNDERLYING STRENGTHS

Cont….

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saudi Arabia

Turky Iran Egypt Algeria Morocco0

100

200

300

400

500

600

700

800

900

745794

549

257 20897

$ Billion

Saudi’s GDP among MENA countries

SAUDI ARABIA -UNDERLYING STRENGTHS

Cont….

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SAUDI ARABIA -UNDERLYING STRENGTHS

8

Cont….

Saudi Arabia’s ranking in global competitiveness 2013/2014

Indicator Ranking Among Arabic Countries

Ranking Among World Countries

Ease of doing businesses 1 22Global competitiveness 3 20Institutions 4 20Infrastructure 4 31Macroeconomic environment 2 4Property rights 5 27Health and primary education 5 53Higher education and training 3 48Goods market efficiency 4 27Financial market development 3 27Technological readiness 3 41Market Size 1 23Business sophistication 3 28Innovation 3 30

SAUDI ARABIA -UNDERLYING STRENGTHS

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Cont….

Saudi Arabia’s ranking in Financial Stability Among MENA CountriesCountry Ranking Among

MENA Countries Ranking Among World Countries

Saudi Arabia 1 1

Emirates 2 5

Kuwait 3 15

Morocco 4 32

Tunisia 5 35

Bahrain 6 37

Egypt 7 46

Jordan 8 49

Turkey 9 54

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INVESTMENTS IN SAUDI ARABIA

SAUDI ARABIA -UNDERLYING STRENGTHS

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Cont….

Saudi Arabia’s ranking in Business Environment Among MENA Countries

Country Ranking AmongMENA Countries

Ranking Among World Countries

Bahrain 1 16

Saudi Arabia 2 17

Emirates 3 22

Kuwait 4 29

Tunisia 5 32

Turkey 6 34

Jordan 7 40

Morocco 8 43

Egypt 9 48

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Saudi Arabia

Egypt Emirates Qatar Oman Kuwait0

2

4

6

8

10

12

14

16

1816.4

6.45.5

4.4

1.10.3

FDI (Inflows) Bn US$ -2011

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FDI TO SAUDI ARABIA BY COUNTRY - 2011

17%9%

8%9%

8%5%

4% 4%3%

2%1 %

USA

Kuwait

France

Japan

UAE

Bahrain

China

Germany

UK

Nether-lands

Jordan

MalaysiaUSA is by far the largest investor in Saudi Arabia.

7%

FDI in Saudi Arabia 2011: 16.4 billion US$

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No bureaucracy and one gate to investment “General Authority for Investment Arabia (SAGIA).

100 % land and corporate ownership to foreigners.

No restrictions on the re-transfer of capital.

No taxes on personal income , taxes 20 % of the benefits on foreign companies.

The possibility of loss carry-over to later years rather than factoring them into tax settlements of profitable years.

Foreign investors have the right to benefit from specialized financial institutions (local and international institutions).

INVESTMENT INCENTIVES IN SAUDI ARABIA

ADVANTAGES OF INVESTING IN SAUDI ARABIA

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Liberalized Market

Domestic Market of over 29 Million People

Proximity to big Markets

Low Labor Costs

Major source of energy

Guarantee of Transfers

National Treatment

Reliable Investment Environment

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Topped the list of GCC and West Asian countries in terms of direct foreign investment.

Topped the list of Arab host in terms of direct foreign investment, with estimated flows of $ 38.2 billion, up 39% of the total.

Top of the list of Arab host of inter-Arab investment interfaces, with an estimated worth of $ 11.6 billion, up 60.4% of the total.

Major investments in west Asia go to three countries: KSA, Turkey and UAE.

Kingdom concluded 41 bilateral agreements with various worldwide countries, including 17 investment agreements, and 24 avoidance of double taxation agreements.

Cont….

ADVANTAGES OF INVESTING IN SAUDI ARABIA

Physical Infrastructure $200 billion

Petrochemical Expansions $92 billion

Electric Power Generation $90.7 billion

Water Desalination $88 billion

Telecom and IT $70.7 billion

Tourism and Leisure Development

$53.5 billion

Natural Gas Production $50 billion

Agricultural Expansion $28.3 billion

Educational and Training $10.7 billion

Railways $99 billion

PLANNED SAUDI INVESTMENTS UP TO 2020

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INVESTMENT OPPORTUNITIES IN HOUSING

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King Abdullah decree to support the Housing Sector through increased allocations totaling $14.67 billion to the General Housing Authority and the Real Estate Development Fund.

The royal decree to support the Housing Authority in building up to 500,000 housing units for citizens.

King’s initiative will bring down the existing shortage of housing units from 1.2 million to 700,000.

The decision to increase the real estate loan from SR300,000 ($80 thousand) to SR500,000 ($133 thousand) and build as many as 500,000 housing units, was reflected in the market with a boost in demand for plots of land for building houses and increased activities in the real estate market.

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Saudi Arabia is planning to invest heavily in its railway  infrastructure, with about SR 365 billion ($99.4 billion), by the year 2040.

Riyadh Metro line:• Saudi Arabia awarded more than $22 billion

in contracts to develop a metro line in Riyadh..

• It is the biggest infrastructure project to be undertaken in the Kingdom of Saudi Arabia, and is a cornerstone of the bold future for Riyadh city.

• Six lines will serve the capital city’s center, government facilities, universities, commercial areas, the airport and the financial district.

• Construction of the 175-kilometer (109-mile), and 85-station network will be the longest metro line in the world under construction, and will create 15,000 jobs over five years.

INVESTMENT OPPORTUNITIES IN METRO &RAILWAYS

INVESTMENT OPPORTUNITIES IN METRO &RAILWAYS

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North-South railway: • Is considers the largest freight rail project,

2,750 km long, and valued at an estimated SR 37.87 billion ($10.1 billion).

• The project is of strategic importance in terms of freight exports to the Gulf.

Land bridge project: • Is another important freight line valued at SR

26.6 billion ($7.1 billion). • The line links the port cities of Jeddah,

Dammam and Jubail, passing through Riyadh.

Haramain High Speed rail project: • Is valued at SR 42 billion ($11.2 billion) and

built to transport pilgrims.

Jeddah metro: • Is another planned project valued at SR 35

billion ($9.3).billion).

Cont….

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FOREIGN TRADE OF SAUDI ARABIA

DEVELOPMENT OF SAUDI ARABIA’S FOREIGN TRADE

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2007 2008 2009 2010 2011 20120

100

200

300

400

500

600

233

313

192

251

365 388

90115

95 107132 156

323

428

287

358

497

544

Billion Dollars

EXPORTS IMPORTS TRADE VOLUME

Today, Saudi Arabia is the 10th biggest exporter and the 21st largest importer in the world. (excluding intra-EU (27) trade).

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TO (10) FOREIGN TRADE PARTNERS -2012

SAUDI ARABIA EXPORTS TO USA 14% Japan 13% China 13% S . Korea 9.2% India 8.3% Singapore 3.6% Taiwan 3.4%

Italy 2.7% Bahrain 2.7% U.A.E 2.6%

SAUDI ARABIA IMPORTS FROM USA 13.5% China 12.7% Germany 7% Japan 6.7% S. Korea 6% U.A.E 4.1% India 3.3% France 3.2% Italy 3% UKs 2.5%

MAIN EXPORTS OF SAUDI ARABIA

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Petrochemical Products Electric Power Towers (High

Tension) Paper Industries Medicine Prefab. Steel Structure Buildings Air Conditioning Materials Cleaning Materials Plastic Textiles Insulating Materials Plastic pipes and fittings and

bottles

Miscellaneous Plastic Material Electric Cables Irrigation Industries Electric Poles Steel Angles for Electric Power

Towers Transparent Glass Carpets Cement Foodstuff Copper Wire , bars and jewelry

SECTORAL BREAKDOWN OF SAUDI’S IMPORTS -2012

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14%

12%

3%

14%26%

31%

Food stuffs

Chemical products

Textiles& Textiles Articles

Base metals

Electrical machines

Others

Machines appliances &electrical gadgets have the highest imports value during 2012 at rate of 26% of the total imports value of Saudi Arabia.

ADVANTAGES OF SAUDI’S EXPORTED PRODUCTS

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More than 2000 commodity within 17 groups.

Applying International Standard & Specification .

Accessibility to more than 148 International Markets.

High Quality of Packaging .

Suitable & competitive price .

Financing programs.

Ease of Transport.

Air, sea & land cargo from various ports.

SAUDI ESTIMATED BUDGET - 2014

Expenditure $228 Billion

8%

7%

25%

13%

10%

Sectoral breakdown of expenditure) %(

Transport & Communications

Water, Agriculture, Industry

Education

Health & Social Development

Development Funds

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Revenues $228 Billion

REFORMS TO ENHANCE SAUDI’S ECONOMY

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Re-evaluation and issuance of new laws.

Developing IT and Communication platforms.

Attention to sectors in which Saudi Arabia has comparative and

competitive advantages.

Creating more jobs for Saud youth.

Enhance PPP Private / Public partnership.

Accelerating Privatization Program.

Support SME’s and Family Business.

Promotion of Non-Oil Export .

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TOWARDS BETTER UK–SAUDI

RELATIONS

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2012 2011 2010 2009 2008

2040 1528 923 697 950 Exports to UK

4192 3817 3442 3424 4060 Imports from UK

6232 5345 4365 4121 5010 Trade volume

-2152 -2289 -2519 -2727 -3110 Balance of trade

DEVELOPMENT OF KSA’S FOREIGN TRADE WITH UK (BILLION US $)

Come and Share our Future with us.

Thank you . . .

www.csc.org.saEmail: cit@csc.org.sa

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