SAUDI PREMIUM RESIDENCY TO ATTRACT GLOBAL ENTREPRENEURS

Saudi economic sentiment reached a 19-month high in June, as both the oil and non-oil economies gained momentum.

Research firm Markit’s latest purchasing managers index (PMI) found Saudi Arabia’s private sector in an upbeat mood. The monthly composite gauge – designed to givea single-figure snapshot of operating conditions in the non-oil private sector economy –posted 57.4 in June, slightly higher than 57.3 in May and the highest since November 2017.

The survey noted an increase in new business growth in the kingdom’s non-oil private sector, with inflows of new orders from abroad rising for the fourth consecutive month. Businesses also expanded their payroll numbers during the month on the back of new orders.

“Business confidence towards future growth prospects was strongly optimistic during June,” the research firm said. “Despite easing to a 10-month low, just under 39% of respondents forecast greater business activity over the coming 12 months. Anecdotal evidence suggested that firms were optimistic towards the impact of forthcoming business investment and new project wins.”

Confidence is also high among investors eager to participate in Saudi Arabia’s coming economic boom. The country’s first euro international bond offering was 4.5 times oversubscribed to EUR 13.5 billion, according to the Ministry of Finance.

The EUR 3 billion, equivalent to SAR 12.70 billion, was divided into two tranches: EUR 1 billion (equivalent to SAR 4.2 billion) for the eight-year tranche maturing in 2027, and EUR 2 billion (equivalent to SAR 8.4 billion) for 20-year tranche of maturing in 2039. The pricing range offered a yield of 0.78% for the eight-year bond and 2.04% for the 20-year tranche.

Saudi Arabia is looking to attract new entrepreneurs, and successful individuals from all over the world to re-energise the economy, with the unveiling of the Premium Residency Centre in May. The new policy will allow new residents to have the freedom to invest in various fields such as industry and real estate, as well as have the right to access Makkah and Madinah, and live with their families.

The Unlimited Duration Premium Residency grants applicants permanent residency in the kingdom, for a one-time fee of SAR 800,000. The Limited Duration Premium Residency gives the applicant a renewable one-year residency for an annual fee of SAR 100,000.

The residents would have greater economic freedom including the ability to acquire usufruct rights on real property located in the cities of Makkah and Madinah for a period not exceeding 99 years, and ownership of real estate for residential, commercial, and industrial purposes, in areas other than the cities of Makkah and Madinah and border areas, in accordance with the regulations. Other perks include visas for family members, freedom of exiting and returning to the kingdom, and use of airport lanes for Saudis.

“We will open our doors to those who choose to live and invest in a vital society that follows the principles of coexistence, in a country that experienced major development stages; they were our partners, brothers and friends who have woven with us a genuine cordiality,” according to Bandar Bin Suleiman Al Ayed, acting CEO of SAPRC.

“Today, we live the largest development experience within the framework of the kingdom's Vision 2030, in order to move beyond the modernisation of time barriers, and to promote the growth of our strong economy, the diversity of our sources and the creation of opportunities.”

The country is keen to attract innovators and entrepreneurs and contribute to the Saudi society.

“These investors and entrepreneurs will help to drive the private sector growth, which is needed to realise the ambitious goals set out in Saudi Vision 2030,” according to Eng. Ibrahim Al Omar, Governor of the Saudi Arabian General Investment Authority (SAGIA).

“It is important that stakeholders understand that Saudi Arabia offers significant long-term opportunities. We want to attract people who will build a foundation and a network in Saudi Arabia, and who will play a role in the future development of the Saudi economy and benefit from the growth opportunities it presents. We believe that this reform will make a real difference.”

The Saudi government is also moving on a number of fronts to realise its Vision 2030 goals. In a bid to expand its trading base, Saudi Arabia signed 15 memoranda of understanding with Korean companies, and granted two new licenses to Korean businesses to establish operations in the kingdom.

“The Saudi-Korean Partnership Convention is a key step in implementing the Saudi-Korean Vision 2030 plan, a co-operation agreement signed between the two countries in 2017,” according to state news agency Saudi Press Agency.

“The plan is designed to diversify the scope of collaboration between these two countries, with a focus on energy and manufacturing, smart infrastructure and digitisation, capacity building, healthcare and life sciences, and small- and medium-sized enterprises and investments.”