RIYADH: Saudi Arabia is keen to attract more foreign direct investment from Asia and Europe as the Kingdom continues its economic diversification journey, a minister has said.
Speaking to CNBC, Saudi Arabia’s Assistant Minister of Investment Ibrahim Al-Mubarak said that the Kingdom is targeting $100 billion in FDI by 2030.
Earlier in August, Saudi Arabia approved an updated investment law aimed at elevating foreign funding inflows into the Kingdom.
According to the Kingdom’s National Investment Strategy, key sectors looking to secure funding include energy, construction, and communication, as well as finance, and transportation.
“China is the largest trading partner of Saudi Arabia. But we are still yet to see more on the FDI side from China. The US is also positioning well as a big investor in Saudi Arabia,” said Al-Mubarak.
He added: “We are looking at expanding that. We are seeing a lot of interest from Asian countries and Europe, and we are capitalizing on those to achieve the targets.”
Al-Mubarak further pointed out that the new investment law in Saudi Arabia is expected to increase FDI inflows in the Kingdom.
“We have SR20 billion ($5.33 billion) in FDI last year, which is a 150 percent increase from 2016. Different studies have shown that 60 percent of our FDI comes from existing investors. I think it is also very important why we are looking at the new investment law and we are broadening the scope for all investors, both domestic and international,” the minister said.
The updated regulations also promise enhanced protections for investors, including adherence to the rule of law, fair treatment, and property rights, while ensuring robust safeguards for intellectual property and facilitating smooth fund transfers.
During the talk, Al-Mubarak noted that the financial sector in Saudi Arabia represents “a huge opportunity” for investors.
“The debt to GDP in Saudi is one of the lowest in G20. The debt capital market is very well underserved. This presents a huge opportunity for financial sector players,” said the assistant minister.
He added: “Today, the equity capital market in Saudi is 78 percent of the capital in the region. It is also the ninth globally. Our credit rating, by all the rating agencies, is very strong and has a positive outlook. We believe the financial sector is an enabling sector.”
