Saudi wealth fund said to plan healthcare investments

Time: November 21, 2018 

Saudi wealth fund said to plan healthcare investments
Turning Saudi Arabia into a regional centre for health care is one of the objectives outlined in PIF’s 2020 strategy document.
By Bloomberg

Saudi Arabia’s sovereign wealth fund is planning investments in the kingdom’s private healthcare services and hospitals as it seeks to modernize domestic infrastructure, people familiar with the matter said.

The Public Investment Fund may appoint an adviser in the near future to help identify investment opportunities, the people said, asking not to be identified as the deliberations are private.

The plan may require billions of dollars, though no final decisions have been made, they said. It could involve investments in existing health-care companies or partnering with foreign companies looking to establish operations in the kingdom, the people said.

“The Public Investment Fund regularly explores potential investment opportunities to support portfolio diversification efforts, but does not comment on specific discussions or activities,” a spokesman for the fund said.

Turning Saudi Arabia into a regional centre for health care is one of the objectives outlined in PIF’s 2020 strategy document, published last year. That includes plans to establish “medical cities” and develop a local pharmaceutical and medical devices industry to reduce the kingdom’s reliance on imports.

PIF isn’t the only government-controlled fund planning to invest in the sector. Hassana Investment Co is partnering with London-listed NMC Health to invest as much as 6 billion riyals ($1.6 billion) in the kingdom’s health-care industry, they said last month.

The health plan reflects one aspect of PIF’s role in the kingdom’s efforts to diversify away from oil and transform its economy. The wealth fund is also taking stakes in firms such as Tesla Inc and Uber Technologies Inc, and has made an initial $45 billion commitment to SoftBank Group Corp’s behemoth Vision Fund.

In addition to its headline-grabbing investments around the globe, the kingdom’s wealth fund holds about $133 billion of assets in its own publicly traded companies, including stakes in Saudi Basic Industries Corp, Saudi Telecom Co and National Commercial Bank.

PIF is set to raise about $70 billion from a planned sale of a stake in chemical producer Sabic to Saudi Arabian Oil Co, another state-controlled entity.


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Moving your business to Saudi Arabia

Time: November 13, 2018   

For companies expanding their operations to Saudi Arabia, it can be a complex and lengthy process. The government has encouraged foreign investment and made reforms to make the process easier for companies, however, challenges still exist

For companies expanding their operations to Saudi Arabia, it can be a complex and lengthy process. The government has encouraged foreign investment and made reforms to make the process easier for companies, however, challenges still exist.

Corporate immigration is a process that requires a lot of time and resources and it is essential that companies perform their due diligence to ensure they are compliant throughout the process. Below we break down corporate immigration into the Kingdom and what you need to know.

What is the government’s policy towards corporate immigration?

The Saudi government have shown a pro foreign investment attitude, by making the necessary reforms to encourage foreign investors to enter the Kingdom. These reforms, aligned with Vision 2030, aim to improve the environment for foreign investment and lower the barriers to entry.

The government have created laws and regulations that create a risk-avert environment for companies to thrive in. We have seen the introduction of the bankruptcy law for companies, therefore ensuring them some security when entering the Kingdom and the privatization plan. This plan aims for private sector companies to take ownership of state-owned companies.

They continue to improve the environment for foreign investors by simplifying processes, such as the investment license that can be granted online in as little as 4 hours which was previously a manual process.

What are the main work and business permits used to transfer employees?

For employees who are going to work in the Kingdom on a long term basis, they will require a work permit and iqama. Initially, they will be granted a work entry permit, this is valid for 90 days and is required to complete in-country requirements prior to receiving the final work permit and iqama. Under the work entry permit, users are not able to work or leave the country. Once the final work permit and iqama are granted, the employee will be eligible to work, rent a property, open a bank account and buy a car.

How long does it typically take to process the visas?

Processing times for visas vary, depending on the industry of work permit, the country of application, the nationality of the applicant and whether there are dependents.

For companies applying from a block visa, this can take two to six weeks before it is processed depending on the size of the request, the type of visa and the Saudization rating of the company.

Once the individual has entered the country under a work visa, it may take two to three weeks to obtain a work permit and iqama. Assuming all relevant documentation is current and has gone through the required processes such as notarisation or attestation. However, if your profession requires extra accreditation, such as engineers or accountants, then it may take an additional two to three weeks.

Can an assignee enter the Kingdom on a commercial/tourist visa?

Holders of commercial and tourist visas are strictly prohibited from doing work in the Kingdom. Therefore, you must ensure the visa you receive is aligned with your purpose of travel to stay compliant.

-Ends-

ABOUT PROVEN

Founded by Saudi Nationals Zaid Al Mashari and Naif Al Otaibi in 2009, PROVEN SA delivers business solutions to companies currently operating in or looking to branch out into KSA. PROVEN SA is a specialist in corporate immigration, employee outsourcing and recruitment, Providing international companies with advanced regional insight and the necessary tools to successfully do business within the Kingdoms burgeoning markets.  Due to an increase in international interest, PROVEN SA expanded out of Saudi in 2016, and now holds offices in Riyadh, Dubai, Dallas and London.

Website: https://proven-sa.com
Telephone: +971 44 508 208
+966 (11) 411 1127
Email: info@proven-sa.com
Facebook: @provensaudi
Twitter: @proven_sa
Linkedin: Proven SA
For more information
Alexis Aboagye
Marketing Executive
aaboagye@proven-sa.com
+971 4 450 8208

This article was first published in ZAWYA

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Foreign investors should explore Saudi investment opportunities

Time: November 10, 2018   

Since the implementation of the new labor market reforms, including the imposition of dependent levy almost 21 months ago, about 1.36 million expats’ family members have left the country, according to official statistics. Expats, the hardest hit by these new
economic measures, fall primarily in the lower and middle-income groups. The countries most affected are India, Pakistan, Sri Lanka, the Philippines, Bangladesh and Nepal.
From one side, there are certain benefits from this labor market correction. The most obvious one is enhancing employment opportunities for Saudis. Other benefits include reducing cover-up businesses, enhancing security as a result of crime reduction and redirecting support to citizens by reducing demands for public utilities.
However, the departure of expats and their families has been negatively affecting key private sectors including housing, retail, transport, recreation and education.
The housing sector has been among the most affected owing to the decrease in demand from expatriate residents. The rent for residential units continues to decrease since the downward trend began, when most foreigners who work for low salaries could afford it.
The retail sector saw a loss of consumer spending as a result of the expatriates’ departure. As for those who remain, they usually send their relatives back home remittances instead of spending their salaries in the local market. Statistics indicate that wholesale and retail trade, restaurants and hotels’ GDP have contracted by 0.51 percent year over year in the second quarter of this year.
Transport (mainly purchase of vehicles), recreation and culture (package holidays), furniture and furnishings, and restaurants have been also some of the hardest-hit sectors in the Kingdom.
As for education, the number of students registered this year declined by 30-35 percent compared with last year. In addition to not complying with the fees and the Saudization process, this led to approximately 30 percent of private schools operating in the local market going out of business.
In my opinion, the adverse impact of these reforms on the above-mentioned sectors will be in the short term only. The government will review these reforms through specialized committees to make the necessary adjustments and corrections. Furthermore, the newly announced giga projects, which will offer thousands of employment opportunities, will definitely require and attract a new wave of value-added expatriates with their families who will ultimately strengthen the purchasing power of the economy.
During this economic cycle, I believe that local companies in these affected sectors should proactively consider mergers and acquisitions to benefit from consolidations. I highly recommend that foreign direct investors appoint their financial advisers to explore forthcoming promising investment opportunities in these key sectors in the long run.

Basil M.K. Al-Ghalayini is the Chairman and CEO of BMG Financial Group.

   

This article was first published in Arab News

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Norway wealth fund plans to double Saudi investments

Time: October 26, 2018     

Norway’s sovereign wealth fund expects to double its investments in Saudi Arabia. (Shutterstock)

Norway’s sovereign wealth fund expects to double its investments in Saudi Arabia when the country is included in the fund’s reference index a few months from now, Chief Executive Yngve Slyngstad said on Friday.

The fund currently has Saudi assets worth $824.82 million.

Slyngstad told Reuters: “We invest in companies, not countries. Our investments in companies based in Saudi Arabia will not be changed based on political developments.”

Deals signed at the Riyadh Future Investment Initiative conference, reached a total value of $56 billion, Saudi Energy Minister Khalid Al-Falih said on Thursday. Read more

For his part, Saudi Finance Minister said that Saudi Arabia’s budget deficit fell by more than the target by the end of the third quarter, with non-oil income rising by 48 % over the same period last year, an unprecedented achievement that reflects the 2030 Vision and paves the way for sustainable income and diversification in government sources of income.

This article was first published in Al Arabiya English  

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Saudi Arabia hopes to attract $427 bln in investments by 2030

Time: October 25, 2018     

File photo of Saudi Energy Minister Khalid Al-Falih.

Saudi Arabia expects to attract investments of more than 1.6 trillion riyals ($427 billion) by 2030 in its push to boost industry, Energy Minister Khalid Al-Falih said on Thursday, according to state TV al-Ekhbariya.

“The program to develop national industries and logistics services (is) the largest and most important, and has a huge impact on the Saudi economy,” Al-Falih said.

The minister estimated that the country’s mineral wealth was worth more than 1.3 trillion riyals.

This article was first published in Al Arabiya English  

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More Saudi sectors opened to foreign investment

Time: October 24, 2018   

The Cabinet amended the sectors excluded from foreign investment at the meeting chair by King Salman. (SPA)
  • The amendment allows foreigners to invest in labor services and jobs, including recruitment offices; audio and video services; road transport services; and brokerage services for real estate

RIYADH: Saudi Arabia will allow foreigners to invest in audiovisual services, land transport and real-estate brokerages, the Cabinet decided on Tuesday.

The Cabinet amended what it described as types of activity that had been previously excluded from foreign investment, after concluding its weekly meeting chaired by King Salman.

The amendment allows foreigners to invest in labor services and jobs, including recruitment offices; audio and video services; road transport services; and brokerage services for real estate.

 

Meanwhile, about 320 foreign institutions have registered as qualified foreign investors in the Saudi stock market, the exchange’s chairwoman told the Future Investment Initiative in Riyadh.

Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange (Tadawul), said 200 more are expected to register.

Global index provider MSCI classified the Saudi equity market as an emerging market in June, a move expected to attract billions of dollars of passive funds.

Al-Suhaimi said she expected the number of qualified foreign investors to increase before and after the inclusion in the index, which is expected to happen in phases coinciding with index reviews in May and August 2019.

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Saudi Arabia gears up to be ‘hub connecting three continents’ with new bonded zone

Time: October 24, 2018   

“Aerial view of cityscape at night, Riyadh, Saudi Arabia”

A new special economic zone, known as the Integrated Logistics Bonded Zone (ILBZ), is to be established at Riyadh’s King Khalid International Airport, as part of Saudi Arabia’s ambitious plans to become the ‘hub connecting three continents’ – Asia, Europe and Africa.

The new zone, announced by the Saudi Government this week, following a Royal Order issued on Friday, will focus on integrated logistics and will enjoy special rules and regulations aimed at attracting more multinational companies to the kingdom.

The ILBZ was announced on the eve of the Future Investment Initiative conference in Riyadh, at which $50 billion worth of deals were expected to be signed, according to Reuters.

The new bonded zone represents a ‘unique opportunity’ for Saudi Arabia according to Anshu Vats, partner in consultancy firm Oliver Wyman, because of the high levels of consumption in the country, its mature use of transport in heavy industries, which account for 12-15 per cent of its economy, and the country’s favourable links with economies both to the East and West. 

“[Saudi Arabia] has a massive demand. The thing about Saudi Arabia is it’s the biggest economy in the region, it’s part of G20, it has 27 million people who are consumers,” Vats said, adding that between 60-70 per cent of shipments into the UAE’s maritime zones are bound for consumption in Saudi Arabia.

“This is an economy that does use transportation in a mature manner, this is also a country that has used other people’s ports for a long period of time, so, having this industry internally and starting to build this capability internally makes imminent sense.”

The new bonded zone will differ from existing port and airport free zones in Jebel Ali, Dubai Airport and Dubai South in the UAE, said Vats, as it has the potential to be an entity for transportation and logistics with ‘discreet’ manufacturing units that will benefit from being within the bonded zone environment, said Vats.

Saudi Arabia does not currently have bonded zones, he said, but uses ports in Jeddah and Dammam as ‘pseudo bonded zones’.

“The goal of the bonded zone is to get to the point where we not only have logistics, we have less hassle of any of the tariff issues, we area also able to do the gross value-add in the local economy, without incurring local taxes or incurring local labour regulations. We can get past some of the local taxation rules because eventually, in a bonded zone, most of it should be export-oriented units.”

As well as freeing up goods passing through the bonded zones from local tariffs, Vats said businesses in the bonded zone had the potential for relief from Nitaqat, or Saudisation, requirements.

“When it goes live, we would like to see some relief from Nitaqat there, because it’s largely export-oriented, and at the end of the day an economic activity has to contribute to the GDP,” he said.

“Employment is one way of generating that impact, export is another, better way of generating that impact. As long as we are doing our bit for generating economic impact, we should not have to contribute to too many buckets at the same time, because that’s when it gets too hard.”

The difference between a free zone and a bonded zone is the depth of the industries involved, he added, referencing companies’ ability to carry out ‘discreet’ manufacturing or value-add activities within the bonded zone, while a free zone is more likely to contain companies operating in an industry in much greater depth, something which can take decades to cultivate.

“If you are talking about a small amount of value-add then you can probably do multiple industries in one place. Most of the bonded zones do that. It’s not a small scale industrial development. You are not creating a whole industry there. What you are doing, for example for pharmaceuticals, is creating a discreet manufacturing facility that does a very small part of value-add there.

The Saudi government press announcement, issued on Monday, said the King Khalid Airport-based facility would focus on a range of activities including warehousing and fulfillment, inventory management, maintenance and repairs, staging, testing, and assembly. 

It stated that the ILBZ was part of a broader plan to establish special economic zones in promising locations for different sectors, including ICT, logistics, tourism, industrial and financial services.

The zone will be operated by the General Authority for Civil Aviation (GACA), while the Saudi Arabian General Investment Authority (SAGIA) will be tasked with attracting investment.

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Foreign investment in Saudi Arabia

Time: October 24, 2018   

Gulf’s largest economy remains an important market for global businesses

DUBAI: Scandal surrounding the killing of Saudi journalist Jamal Khashoggi has shrunk the attendance of senior executives from multinational companies at this week’s Future Investment Initiative conference in Riyadh.

But the Gulf’s largest economy remains an important market for global businesses, ranging from oil majors to leading banks.

More than $50 billion in deals were signed at the conference on Tuesday, including a deal between Total and Saudi Aramco to create a retail network in the kingdom.

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Saudi Arabia will not penalize banks that boycotted conference – c.bank chief

Time: October 24, 2018   

Saudi Arabia’s central bank governor Ahmed al-Kholifey speaks to reporters in Riyadh, Saudi Arabia, May 4, 2017. REUTERS/Faisal Al Nasser

DUBAI  – Saudi Arabia’s central bank governor said the kingdom will not penalize foreign banks that boycotted an investment conference in Riyadh because of the fallout from the killing of Saudi journalist Jamal Khashoggi.

He also reiterated the country’s commitment to defend its currency peg to the dollar after some recent weakness.

Saudi Arabian Monetary Authority (SAMA) Governor Ahmed al-Kholifey, speaking in an interview with Al Arabiya TV on Wednesday, said that institutions that pulled out of the Saudi conference will still be able to apply for and obtain banking licenses to operate in the kingdom.

 

More than a dozen foreign banks have licenses to operate branches in Saudi Arabia, battling for business resulting from the kingdom’s efforts to itself off reliance on oil revenues.

But U.S. and European reaction to Saudi Arabia’s account of the death of dissident journalist Jamal Khashoggi is threatening to smother some of the enthusiasm among some Western banks for opportunities in the kingdom.

“We, at the central bank, deal in complete professional manner whether with local or international banks,” al-Kholifey said when asked if the banks that decided not to participate in the event will be penalized.

Saudi Arabia is holding this week in Riyadh a large investment conference, the Future Investment Initiative, despite boycotts by Western political figures, international bankers and executives.

Many Western banks and other companies, fearful of losing business such as fees from arranging deals for Saudi Arabia’s $250 billion wealth fund, sent lower-level executives to the event even as their top people stayed away.

The governor also reiterated the country’s commitment to defend the Saudi riyal’s peg to the dollar, adding that the current pressure to the peg was much lower than in the past when oil prices crashed.

The riyal SAR= , which sank to a two-year low of 3.7526 against the U.S. dollar earlier this month because of concern that the disappearance of journalist Jamal Khashoggi could hurt foreign investment in Saudi Arabia, has recovered some of the losses and on Wednesday stood at 3.7511.

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How to make investment in Saudi Arabia even easier

Time: October 23, 2018  

Dimah Talal Alsharif

With the second Future Investment Initiative conference in Riyadh this week, the Kingdom is looking forward to developing its investment climate in general and focusing particularly on harnessing technology to exploit economic opportunities.
Previously I have explained how the foreign investment system in Saudi Arabia shows the readiness of the Kingdom to embrace successful and unique businesses that contribute to achieving its ambitious vision. Today we will discuss the important legal and procedural matters that could actually improve this investment climate, and raise its level in line with the ambition of the Kingdom.
The Saudi Arabian General Investment Authority does great work through its diversified services and reliable guides to procedure. However, with the increasing flow of investment capital into the Kingdom from abroad, there is also a clear need for specific, practical and simple mechanisms to accompany these investments.
Procedural complexities are among the biggest concerns of foreign investors, including, of course, sponsorship procedures and the time taken for customs clearance and transport. Moreover, the frequent introduction of new standards for licenses, and their duration, makes it difficult for many investors to comply with them. The solution lies in greater communication between government agencies to accomplish these transactions more quickly and with less complexity.
As for investment law, in some cases there is some blurring in its implementation that contradicts the above criteria. In return for benefits granted to foreign investors, further financial guarantees should be required from them, especially in light of continuing court battles between investors and their partners.
In addition, one of the Kingdom’s objectives in attracting foreign investments is to empower the national workforce and provide it with the necessary professional qualifications and expertise, with foreign investment establishments required to have a Saudization rate of at least 75 percent. The important question is whether this Saudization is based on a continuous and reliable assessment, or is just a formality.
There is also, unfortunately, a significant lack of data and information on the Saudi market, and the rates and opportunities for investment. I strongly believe such information is an important tool; it ensures that investors who intend to enter the Saudi market know the precise nature of the opportunity, what is expected from them, and how suitable they are for the investment climate in the Kingdom.
The creation of a separate and independent foreign investment entity would stimulate these activities, especially if we linked it to parallel business centers that would process licenses from the first step until completion. However, both local and foreign investors have an important responsibility to learn both their legal rights and their duties, so as to avoid infringements, rather than simply blaming the procedures and criticizing the regulations.
Over the past decades, the investment systems in the Kingdom have undergone complex changes; the first foreign investment system, for example, was closed and inflexible. With the Kingdom’s vision and belief in development and reform, the procedures have changed and developed to encourage a more open and attractive economy, and there will be more changes soon.
I neither criticize nor defend foreign investment — but I want to ensure that it achieves the desired results in a clear way, attracts truly unique enterprises and expertise, and achieves the desired benefits for the national economy and the youth of the country.

Dimah Talal Alsharif is a Saudi legal consultant, head of the health law department at the law firm of Majed Garoub and a member of the International Association of Lawyers. Twitter: @dimah_alsharif

 

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