investment highlights winter 2019 13012020 · meeting include: • basf (germany) – evaluating...

In research partnership with

www.investsaudi.sa

2019 in review: the year’s biggest deals, projects, and transformational reforms• Opening remarks by Dr. Majid Al Qasabi, Minister

of Commerce and Investment• Over 150 signed investor deals• 54% yearly growth in new foreign investor licenses• Exclusive interviews with Engie, Baker Hughes, and

the General Sports Authority• Timeline of pro-business reforms

Inside this report:• New investment figures• Top deals of 2019• Exclusive interviews• Major projects and opportunities

Winter 2020 – A Special Reportby Invest Saudi

InvestmentHighlights

OPENING REMARKS

FDI SpotlightFDI inflows:

in 2019 vs 2018 (first 9 months)

+10.2%

Saudi Arabia FDI Inflows (Jan-Sept, $ Billions)

01 www.investsaudi.sa

$1.16bn

Jan-Sept 2018

$4.0bn

$3.5bn

$3.0bn

$2.5bn

$2.0bn

$1.5bn

$1.0bn

$0.5bn

Jan-Sept 2017 Jan-Sept 2019

$3.18bn$3.50bn

Source: SAMA

It has been nearly four years since the launch of Saudi Arabia’s Vision 2030, a bold program aimed at transforming our economy. The achievements outlined in this report demonstrate that this transformation is becoming a reality, and the reforms we have introduced are unlocking new opportunities and empowering investors – from across the Kingdom and around the globe.

Once again, we saw sharp growth in the number of new investment

licenses being issued to foreign companies. In fact, more than 1,100 such licenses were issued in 2019 – 54% more than in 2018 and three times as many as in 2017.

These investors represent a broad range of emerging and established markets from across Africa, Asia, Europe, and the Americas. They also span a number of strategic sectors – from construction, to tourism, to education and healthcare.

But what unites all of these investors is that they recognize an exciting opportunity in Saudi Arabia – a G20 economy at the convergence of three continents – and they see that reforms have made it easier than ever to access that opportunity.

The pace of these reforms was demonstrated clearly when Saudi Arabia rose 30 places in the World Bank’s Doing Business 2020 report – improving more than any other nation on the list.

However, while we are encouraged by the progress we have made, we still have work to do.

Every day, we are speaking with investors – in Saudi Arabia and across the world at events such as the World Economic Forum in Davos. We are listening to their views and learning what more we can do and what new opportunities are emerging.

2020 is an important year for Saudi Arabia – not least because later this year, we will become the first country in the Middle East to host a G20 Summit, putting the Kingdom’s economy in the spotlight on the global stage.

We are confident that over the next twelve months the economic reforms we have made will continue to translate into tangible results – and we look forward to welcoming more investors from around the world to join us on this journey.

Dr. Majid Al Qasabi Minister of Commerceand Investment

Winter 2020

Manufacturing

1332018

1902019

A record year for Saudi Arabia’s investors, with 1,131 investor licenses awarded.

Foreign Investor Licenses Highlights in 2019

+54 %New foreign investor licenses:

vs 2018

New Foreign Investor Licenses – Annually

New Foreign Investor Licenses - Sector Highlights

Of which:

69 % full foreignownership

31% joint venturepartnerships with localinvestors

Wholesale andretail trade

Professional,scientific and technical

Transportationand storage

Accommodationand food services

Administrative and support services

972018

1252019

652018

1022019

392018

742019

322018

552019

292018

352019

69 %

31%

INVESTOR LICENSES

02www.investsaudi.sa

2015 2016 2017 2018 2019

259 258 377 736 1131

Financial andinsurance

192018

262019

202018

282019

Humanhealth

Information andcommunication

1112018

1782019

Construction

1112018

1932019

New Foreign Investor Licenses - Country Highlights

USA

Indi

a

Jord

an

Egyp

t

Fran

ce

Chin

a

Leba

non

Syria

Yem

en

UAE

Paki

stan

Spai

n

Caym

anIs

land

s

Italy

Net

herla

nds

Turk

ey

Sing

apor

e

Bahr

ain

Sout

hKo

rea

UK

140 100 92 82 71 50 47 45 41 39 34 31 30 28 23 22 21 21 20 16

Winter 2020

INVESTOR DEALS

Pan-Asia (China) $1.06 billionChina-based Pan-Asia established the first 100% foreign-owned petrochemical project in Saudi Arabia. Upon completion in 2021, the facility will generate 570 new jobs and produce 1.25 million tons of purified terephthalate acid (PTA) per year, in addition to 500,000 tons of polyethylene terephthalate (PET).

EDF Renewables (France) $500 millionAs part of the Renewable Projects Development Office’s first round of project tenders, a consortium formed by the Abu Dhabi Future Energy Company - Masdar - and EDF Renewables will establish a 400-megawatt wind farm at Dumat Al Jandal, creating almost 1,000 jobs during construction and operation.

Wengfu (China) $250 millionWengfu will establish an anhydrous hydrogen fluoride (AHF) and poly silicon manufacturing facility. The project will target an initial production capacity of up to 20,000 Mt/y of AHF and 3000 Mt/y of poly silicon. AHF is a raw material used to manufacture aluminum fluoride, an important input for production at the Ma’aden Aluminium Company. The project will be located in close proximity to a phosphates complex in Wa'd Al-Shamal.

Saudi-Chinese Investment Forum New deals were concentrated in Vision 2030 target sectors, including renewable energy applications. Goldwind International Holdings signed an $18 million agreement to develop wind turbine structures, blades, and wind generation equipment, creating 800 jobs in the process. Other deals were signed in the IT, infrastructure, and petrochemical sectors.

> $28 billion

Shenyang (China) $400 millionShenyang will establish a calcined petroleum coke manufacturing facility, creating 200 new jobs and supporting aluminum industry localization.

Saudi-India Forum SAGIA signed a number of agreements with Indian firms such as Tata Consultancy, Wipro, Glenmark, and Ion Exchange in New Delhi.

o1

o2

McDermott (USA) McDermott announced plans to create 5,000 new jobs as part of a project to build an offshore platform manufacturing site, as well as supporting the development of the King Salman Global Maritime Industries Complex in Ras Al-Khair.

$2.5 billiono3

Setting unprecedented momentum in the run up to 2030, Saudi Arabia achieved major successes in signing new deals across high-priority Vision 2030 target sectors. From tourism to value-added manufacturing, investors want in. This was underscored by dozens of new deals signed at high-profile events across the globe in 2019.

2019 was a banner year for investment in Saudi ArabiaTop deals of 2019

Over 150 dealssigned by SAGIA

in 2019

JANUARY1

MARCH3

FEBRUARY2


Winter 2020

INVESTOR DEALS

APRIL4

JULY7

Saudi-Japan Vision 2030 Business Forum SAGIA announced the signing of multiple MoUs and agreements with public and private sector entities under the Saudi-Japan Vision 2030 initiative. These deals span a number of strategic sectors including finance, education, industrial, and manufacturing, and involve major Japanese firms including Mizuho, MUFG Bank, and Yokogawa Electric.

VENTURE by Invest Saudi More than 20 venture capital firms from the US, UK, China, and Singapore signed agreements under the VENTURE by Invest Saudi platform. Launched at the Financial Sector Conference, the VENTURE by Invest Saudi platform provides streamlined licensing procedures for venture capital portfolio companies, including an ‘instant license’ available in under three hours.

GlaxoSmithKline (UK) SAGIA signed a manufacturing localization agreement that will see GSK expand the local manufacturing capacity of its innovative pharmaceutical portfolio, doubling its manufacturing output by 2022.

Unibio (Denmark) $200 millionSAGIA signed an MoU with Danish biotechnology firm Unibio, as well as its local partner Edhafat, to develop a new facility that will convert natural gas into high-protein livestock feed.

On the same day the kingdom launched a new visitors’ visa scheme, SAGIA and the Saudi Commission for Tourism and National Heritage signed $27 billion in tourism investment deals:• Triple 5 (USA) committed to invest $10 billion in a series of mixed-use tourism, hospitality, and entertainment

destinations• Majid Al Futtaim (UAE) will invest $5.3 billion to develop a mixed-use shopping and entertainment destination,

creating 12,000 new jobs, as well as the region’s largest indoor ski slope and snow park• FTG Development (Turkey) will invest $1.5 billion in a hotel, waterpark, and retail development in Qiddiya, as well as

a 1500-room hotel in NEOM and a hotel located between Jeddah and Makkah• Oyo Rooms (India) will invest $1.1 billion to acquire more than 10 premium and luxury hotels in the Kingdom• Nenking Group (China) & Ajlan Brothers (Saudi Arabia) signed a $400 million joint venture to develop a landmark

lifestyle destination in Riyadh• Kerten Hospitality (Ireland) will invest $72 million to develop a portfolio of mixed-use projects across the Kingdom

World Energy Congress Deals $240 millionSAGIA awarded six licenses at the World Energy Congress in Abu Dhabi:• Engie (France) will develop a 30MW solar plant to supply power to Nadec Company.• Engie Saudi Holding LLC will help to manage all Engie activities in the Kingdom and provide shared services to the

group’s subsidiaries• EEG (Cyprus) and Lime Energy (USA) will establish an Energy Service Company (ESCO) to executive energy efficiency

projects in the Kingdom• Roxtec (Sweden) will manufacture high tech cables seals in Saudi Arabia and introduce the technology to industrial

users across multiple sectors• Orbits (Egypt) plans to develop solar projects worth $173 million across the Kingdom over the next five years

04

06

07

08

SEPTEMBER

Tourism projects $27 billion09

JUNE6

AUGUST8


9

Winter 2020

GL Rapha (South Korea) GL Rapha, holding company of Hankook Korus Pharm, plans to establish a local facility to manufacture 30 biotechnology products in Saudi Arabia and launch a further five innovative products over the next five years.

$320 million

Future Investment Initiative During the third annual Future Investment Initiative (FII), 23 MoUs totaling $15 billion were signed. Coordinated under the Invest Saudi umbrella, these agreements reflect the enormous potential that Saudi Arabia offers to investors from across the Kingdom and around the world.

$15 billion

OCTOBER 10

INVESTOR DEALS


NOVEMBER 11

12

11

DECEMBER12

Petrochemical investments

More than 80 representatives from 13 government and private sector entities from Saudi Arabia and across the globe convened to sign a raft of new petrochemical investment agreements. SAGIA MoUs signed at the meeting include:• BASF (Germany) – Evaluating and assessing

opportunities in Saudi Arabia• SNF (France) – Evaluating the establishment of a

polyacrylamide plant with a capacity of 50,000 tons per annum in Jubail, creating 80 new jobs

• Mitsui & Co. (Japan) – Establishing an ammonia commercial production project in Jubail with an estimated capacity of 1 million tons per annum, using a highly-efficient and environmentally-friendly manufacturing process

• Shell (Netherlands) – Evaluating the building of a state-of-the-art residue upgrading catalyst manufacturing facility in Jubail Industrial City, subject to regulatory approvals

• AMG & Shell (Netherlands) – Assessing the feasibility of building a facility to reclaim valuable metals by recycling spent residue upgrading catalysts generated by refineries in Saudi Arabia and the surrounding region

> $2 billion

BRF (Brazil)

SAGIA granted an industrial investment license to Brazil’s BRF, one of the world’s largest poultry exporters. The deal represents a major step forward for SAGIA’s efforts to localize the food processing sector and boost regional exports. The company plans to build its first factory in Saudi Arabia in 2020.

$120 million

Optimum Tracker (France)

French-based Optimum Tracker signed a joint venture with Saudi-based Al Rushaid Group with an initial investment of $53 million to provide design and engineering services in the field of solar energy, with a focus on the manufacturing of mounting system structures for solar PV panels. The plant constructed under the deal plans to export at least 30% of its products to countries across the region and create 1,000 direct jobs.

$53 million

10

Winter 2020

INVESTOR DEALS

Future Investment Initiative outcomes and figures


The third annual FII convened in Riyadh in October 2019, to continue building active, global networks of influential decision makers to explore the emerging industries that will shape the global economy and investment landscape over the coming decades.

As the third FII demonstrated, Saudi Arabia holds extremely high potential for companies and individuals looking to maximize their ROI. Acting as a vital forum connecting local and international investors with hundreds of emerging opportunities and projects in the kingdom, the 2019 FII was a major success. On its opening day, SAGIA announced it had signed 23 investment agreements valued at $15 billion, including:

Air Products and Chemicals, Inc. (USA) – $11.45 billion. The company signed an MoU with ACWA Power to develop the massive Air Product Qudra project. Modular Middle East (Australia) – $700 million. The company will localize its supply chain and develop new manufacturing facilities in Saudi Arabia.APQ (UK) – $600 million. APQ entered into a joint venture with Saudi Aramco for an industrial gases project. Xylem (USA) – $550 million. American water company Xylem aims to establish a manufacturing and service center in Saudi Arabia for water & wastewater pumps, which would generate 300 jobs locally.Baker Hughes (USA) – $550 million. The agreement between SABIC and Baker Hughes is aimed at developing local capacity, creating downstream business opportunities and catalyzing industry diversification.ForDeal (China) – $300 million. ForDeal will establish a regional distribution hub and localize operations in Saudi Arabia. Institutio Butantan (Brazil) – $250 million. Together with Industrial Clusters, Institutio Butantan will conduct a feasibility study with the aim of investing in local vaccine production.Baker Hughes (USA) – $230 million. Baker Hughes signed an agreement with Saudi Aramco for co-investment and co-development of artificial intelligence and digital transformation solutions.Shiloh Minerals (UK) – $200 million. Shiloh will develop its local production capacity, as well as invest in potential upstream mining opportunities in Saudi Arabia.DTDC (India) – $200 million. DTDC’s deal with Zajil will see the creation of a pan-regional packaging e-commerce company based in Saudi Arabia.Dassault Systems (France) – $200 million. Dassault will collaborate with Saudi Aramco across diverse sectors including data analytics, project management, and smart cities. BRF Brazil Foods (Brazil) – $120 million. BRF plans to develop its local production capabilities in Saudi Arabia. KME (Germany) – $110 million. KME, one of the world’s largest copper producers, plans to expand its manufacturing capacity into Saudi Arabia.Eurofarma (Brazil) – $110 million. Eurofarma signed an MoU with Industrial Clusters to conduct a feasibility study for a pharmaceutical manufacturing project. AKER SAS (Norway) – $110 million. AKER SAS signed an agreement with Saudi Aramco to study green energy solutions.

Winter 2020

FII 2019 at a Glance

MoUs valued at23 $15 billion

Attendees

6,000+Speakers

275+International public figures

30+

Sectors

25+Countries

30+Partners

45+

INVESTOR DEALS

AERIS (France) – $100 million. AERIS signed a deal with Industrial Clusters to develop a wind energy project. BMT (UK) – $74 million. BMT signed an agreement with Saudi Aramco to establish a fittings and valves manufacturing facility in Saudi Arabia.Aurora Motors (USA) – $50 million. Aurora’s deal with Alkhorayef Group is intended to introduce cutting-edge irrigation machinery systems and well-drilling equipment, creating up to 1,000 local jobs.Extreme International (UK) – $50 million. Extreme International signed a deal with Fast Service to develop and launch a series of action and adventure sporting events across Saudi Arabia.SABIC & Taqnia (Saudi Arabia) – $32 million. SABIC will work with Taqnia to develop smart grid solutions, as well as innovative wastewater and cooling technologies.Pultron (New Zealand) – $25 million. Pultron signed a deal with Saudi Aramco to invest in developing manufacturing facilities in Saudi Arabia that will produce high-performance glass fiber-reinforced polymer (GFRP) pultrusion products.LT Foods/DAAWAT (India) – $17.5 million. The company signed a deal with SALIC to invest in agricultural and livestock production.Tubacex Group (Spain). Tubacex signed a deal with Saudi Aramco to develop CRA pipe threading, weld overlay, and cladding services manufacturing facilities in the Kingdom.


Winter 2020

INVESTOR VIEWS

How would you describe Engie’s investments in Saudi Arabia?Engie has been in the Kingdom for nearly two decades, and today we have investments worth $5 billion. By the first quarter of 2020 we will have 2000 employees in total. In the upcoming three to five years, however, we’re looking at an additional $5 billion of investments, and an additional 3000 employees, so that alone says a lot about our intent for the country.

How do you see Vision 2030 supporting the investment journey?Vision 2030 was a turning point not just for Engie but for Saudi Arabia as a whole. We’re seeing significant change in the country: it is moving strictly towards public-private partnerships (PPPs) and providing more opportunities for the private sector to participate. Regulations are changing in favor of the private sector. As a result of this new Vision, we’re working with a clean sheet of paper. There are clear objectives for what the government expects to achieve, creating unity across both the public and private sectors.

Can you briefly tell us about the role SAGIA played in your investment experience? SAGIA has been a fundamental and key component to us doing business here. They’ve given us a sense of comfort and support, not just during the preliminary procedures but throughout the entire chain of process-es required to set up a business. SAGIA goes above and beyond to ensure that international companies are properly settled, that they understand the laws, and that they have the necessary licenses to do business. I would say SAGIA has been a key player, and this is clearly tied to the Vision, which is encouraging FDI.

How is your investment benefitting from having a local joint venture partner?The projects we pursue always include a local partner. The reason for this is mainly to share the risk on the project itself, but also to ensure our work has a local touch. It helps us speed up hiring, and it helps us work with partners with an established supply chain in the Kingdom. I can tell you that having a local partner is key to working in the Kingdom. Yes, you can do it without one, but if you really want to become competi-tive and minimize your imports, a local partner is vital. You need to understand what is available in the country, and to do that is much easier when you have a local partner helping you.

What are your biggest achievements in Saudi Arabia and what “next steps” are you planning?We just completed a 30-megawatt solar power purchase agreement (PPA), which is the first corpo-rate-financed PPA in Saudi Arabia. This would not have been possible prior to Vision 2030, but because the private sector is aligning itself with Vision 2030 requirements, it is able to support and participate in PPP programs. Moving forward, I would say that what we’ve achieved is only 10% of Engie’s true potential here. I see a lot more involvement in terms of local content, not just localization of the workforce or supply chain, but also bringing in new technologies and new infrastructure. We’re working on energy efficiency measures, smart cities, and infrastructure projects that comprise a complete city. Finally, we are working on gas storage and green hydrogen, which is a brand-new energy source, and we believe Saudi Arabia can be a global leader in this area.


Interview withTurki AlshehriCEO, Saudi Arabia

Winter 2020

INVESTOR VIEWS

Why did Baker Hughes invest in Saudi Arabia? Baker Hughes has been here in Saudi Arabia for 80 years. The Kingdom offers a lot of value for us because it has the right people, the right potential for growth, it’s well-positioned geographically, and it’s at the right level of development. We see Saudi Arabia as a hub for us in the region – a hub for all our manufacturing, our human capital development, and for our key technolo-gy collaboration, leveraging the Dhahran Technology Center we have in Dhahran Techno Valley.

How have Vision 2030 and SAGIA supported your activities in Saudi Arabia? We’ve had a great experience with what Vision 2030 has brought to Saudi Arabia. I’ve been here for almost 20 years now, and I have seen how the Kingdom has been transformed. What impressed me the most was how our collaboration with SAGIA helped us drive an investment that wasn’t simple to develop, so that it became profitable and offered the right return on investment.

We celebrated breaking the ground at our new chemi-cal plant in Jubail just a few months ago. It’s a true testimony to how we were able to come together as a multinational company with SAGIA to establish the right priorities and investment imperatives to make it work, not only for Saudi Arabia but for the region.

How is Baker Hughes supporting Vision 2030 objectives? Today, our partnership with academia – including the Saudi Arabian Drilling Academy, the Saudi Petroleum Services Polytechnic, and the National Institute of

Interview withZaher Ibrahim

Vice President, Saudi Arabia, North Gulf &

East Mediterranean

Technology – all of these vocational institutes are helping nurture the Kingdom’s young talent, giving them the opportunity to make a difference - this is also a great opportunity for Baker Hughes.

We are focused on building the right socioeconomic ecosystem in Saudi Arabia and for the region. Our investments in the non-metallic segment, our turbomachinery compressor facility in MODON, our latest and greatest pressure control facility in MODON which serves not only Saudi Arabia and the region, but exports globally as the largest wellhead facility world-wide - all of these are achievements that we at Baker Hughes are very proud of.

But there is definitely more to come, and we believe everything we do here should benefit Saudi Arabia and the wider region. We’re pushing exports as a company, but we’re also pushing another export - talent. We’re encouraging Saudi talent to go outside of Saudi Arabia, into the wider region and globally, then we monitor and drive their development, so they come back here ready to manage and lead the region.

What’s next for Baker Hughes in Saudi Arabia? We just announced a joint venture with Saudi Aramco on the non-metallic front, where we’re seeking to maximize the hydrocarbon value chain. We’re very proud of this joint venture and we believe it will give Baker Hughes the opportunity to bring the right technologies, while Aramco will bring the right momentum through its hydrocarbon experience and domain expertise.


Winter 2020

BUSINESS REFORMS HIGHLIGHTSBUSINESS REFORMS HIGHLIGHTS

The Saudi Cabinet announced it will permit commercial activities to operate for 24 hours a day beginning in January 2020.

JULY07

A landmark reform to the Kingdom’s procurement law was finalized, coming into effect in November. The new law introduced a more competitive, flexible, centralized, and effective system for government tenders, including equality between Saudi and international contractors (provided local content requirements are met). The government is also now able to pay sub-contractors and sub-suppliers directly and allows for arbitration of disputes via the Saudi Center for Commercial Arbitration.

JULY06

The Ministry of Commerce and Investment launched a new law aimed at supporting and developing e-commerce, enhancing confidence in the sector, and providing consumer protection against fraud, deception, or misinformation.

JULY05

Saudi Arabia has implemented a series of sweeping reforms to improve the business climate in the Kingdom and support new investments in 2019. These efforts have helped the Kingdom improve its ranking in several high-profile international reports and indices.

“With a reformist mindset, the Crown Prince has implemented and promoted a policy of featuring the Kingdom as an open world-class investment destination. The Kingdom’s “Vision 2030” plan for long-term development encompasses a variety of legal and structural reforms.”World Bank, October 2019

Saudi Arabia opened several key sectors to 100% foreign ownership, including manpower recruitment services, recruitment agencies and offices, audio-visual media services, real estate brokerage services, and road transportation services. In the previous two years, the Kingdom had already opened the healthcare, education, wholesale and retail, and engineering services segments to full foreign investment.

DECEMBER 2018

Saudi Arabia established the National Competitiveness Center as a successor of Tayseer. The NCC has since partnered with over 50 government organizations, as well as private sector entities represented by the Council of Saudi Chambers. In 2019, 57% of the NCC’s 400+ planned pro-business reforms were implemented.

JANUARY

Saudi Arabia launched the Premium Residency Scheme for skilled foreign workers.

MAY

Saudi Arabia jumped 13 places on the IMD World Competitiveness Yearbook 2019, the biggest gain of any country surveyed. It was ranked the world’s 26th most competitive country, and 7th among the G20, supported by improvements to government and business efficiency.

01

02

03

MAY04

In a historic moment for the country, Saudi Arabia launched its first tourist visa scheme for 49 nationalities around the world, opening up a wealth of business opportunities in the Kingdom’s untapped tourism sector.

SEPTEMBER08

Saudi Arabia officially opened the publishing sector to 100% foreign ownership. The sector was among the last that still prohibited full ownership by foreign investors.

OCTOBER09

The World Bank ranked Saudi Arabia the world’s top reformer and improver in its Doing Business 2020 report. The Kingdom rose 30 places, from 92nd to 62nd, and improved in 9 out of 10 areas measured in the report.

OCTOBER10

A highly anticipated franchise law was approved by the Council of Ministers, due to come into effect in April 2020. The new law will enable international companies to access local markets, as well as develop a regulatory framework for the relationship between franchisors and franchisees. The law will help both franchise parties make better investment decisions and improve the quality of goods and services on offer in Saudi Arabia.

OCTOBER11

Saudi Arabia climbed three places in the World Economic Forum’s 2019 Global Competitiveness Report rankings, becoming the world’s 36th most competitive economy of 141 surveyed. The Kingdom achieved significant results across each of the 12 index components, ranking 1st for macroeconomic stability, 17th for market size, and 19th for product market.

OCTOBER12


Making an impact:The biggest and best reforms of 2019

Saudi Arabia ranked as the world's top Doing Business reformer and improver

Winter 2020


In May 2019, the Shura Council officially approved the Premium Residency Scheme for skilled foreign workers. Also referred to as the “Saudi green card,” the scheme offers two types of permits: Permanent Residence (SP1) and Temporary Residence (SP2). Premium Residency holders benefit from a host of attractive rights and privileges, including:

A successful first batch of Premium Residency applicants

Issuing of visitorvisas for relatives

Recruitment ofdomestic workers

Access to a geographic informationsystem that simplifies the review of new electrical connection requests

The ability to own real estatefor residential, commercial, and

industrial purposes

The ability to investin securities listed on

the Saudi Stock Market

The right to engage in businessactivities in accordance with the

Foreign Investment Law

The right to enter and exitthe Kingdom as desired

Usufruct rights onproperty located in the

cities of Mecca and Medina

Ownership of private meansof transportation

In November, the Premium Residence Center announced it had approved

applicants of 19 nationalities

The first group was comprised predominantly of doctors, investors, and engineers.

BUSINESS REFORMS HIGHLIGHTS

The world’s top talent can now benefit from a groundbreaking new citizenship program open to top innovators and leading scientific talent. On December 5, a royal decree was issued offering citizenship to experts, innovators, and talented creatives. Innovators’ citizenship is open to experts in forensic and medical science, technology, agriculture, nuclear and renewable energy, oil and gas, and artificial intelligence, as well as distinguished scientists in areas such as desalination.

The new scheme will play an important role in supporting Vision 2030 objectives, including the Kingdom’s transformation into a knowledge-based economy.

Saudi Arabia launches innovators’ citizenship program

Winter 2020


NEOM to train workforce of the futureIn December, NEOM and the Technical and Vocational Training Corp. (TVTC) formed a partnership aimed at creating thousands of new jobs in the Tabuk and NEOM regions. Recognizing that NEOM will require thousands of vocational workers for construction, development, and management, the partnership seeks to provide training and education to up to 6,000 residents, with a focus on key industries including energy, construction, operations and maintenance, hospitality, transportation, and logistics. Following graduation, NEOM will provide students with contractor positions within the development.

Also in December, NEOM partnered with the University of Prince Mugrin to provide job opportunities in the hospitality and tourism sector for hundreds of students from the NEOM and Tabuk regions. Beginning in January, up to 250 students will be selected to participate in a Hospitality undergraduate degree program at the university, which is offering the program in partnership with the École Hôtelière de Lausanne (EHL), the world’s most prestigious hospitality school. Successful graduates will be provided with job opportunities at NEOM after finishing their studies.

Expected to attract up to 5 million visitors annually, NEOM will play a key role in propelling tourism to become a major economic driver in the coming years.

GIGA-PROJECTS UPDATE

Red Sea Airport contract signedIn an important milestone for the Red Sea Project, the Red Sea Development Company awarded a design contract for the destination’s planned international airport to leading architecture and design firm Foster + Partners in late October.

In partnership with its design subconsultant WSP Global, Foster + Partners will design the airport using eco-friendly and sustainable principles. Its architecture will be informed by the colors and textures of the Red Sea and its surrounding natural landscape, acting as a calm and luxurious gateway to one of the world’s most unique resorts.

Construction of the airport is expected to finish in 2022, with capacity to handle 1 million passengers annually and a peak of 900 per hour. The Red Sea Project itself will come online in the same year, with its first phase offering 14 hotels and 3000 rooms across five natural islands and two inland sites.

Qiddiya powers ahead with new site officeand strategic partnership with SamsungInnovation is accelerating at Qiddiya entertainment city project just outside Riyadh, after the October announcement that the Qiddiya Investment Company (QIC) and Samsung signed an MoU establishing Samsung as Qiddiya’s primary technology sponsor, and for collaboration in the design, engineering, and construction of Qiddiya’s upcoming sports complex. The wide-ranging agreement also includes co-branding and naming rights for some anchor facilities at the new sports complex and will support QIC’s work with multiple businesses operating under the Samsung umbrella. The two companies are seeking to develop one of the world’s most technologically advanced entertainment, sports, and arts destinations.

On December 11, the Qiddiya Development Company, QIC’s investment arm, announced it had completed the first of two onsite offices ahead of schedule. The 21,000 sqm office complex will house 150 employees working on phase one of the Qiddiya project, which is expected to open in 2023.

Winter 2020

INVESTMENT INITIATIVES


The foundation stone for Saudi Arabia’s $17 billion Diriyah Gate Project was laid in November. The project will restore Saudi Arabia’s ancient and historic city and UNESCO World Heritage Site, which was built on the banks of Wadi Hanifa in 1446, transforming it into a cultural and lifestyle destination.

On completion, the 7 sqkm project will comprise 20 luxury hotel brands including Aman Resorts, as well as 5 iconic squares, a 15,000-seat arena, and a Formula-E racetrack. Its construction and operation will create 55,000 jobs, 15% of which will be for Diriyah residents.

Major $17 billion project to restore Diriyah UNESCO World Heritage Site

In November, The Nature Park project in Riyadh was officially unveiled. Located in the southeastern area of Riyadh’s Diplomatic Quarter, the 200,000 sqm park will feature multiple elements inspired by the area’s natural landscape. Works will include sand and rock features, illuminated pedestrian pathways, and integrated irrigation systems for trees and vegetation beds.

Riyadh goes green

Winter 2020


Riyadh becomes the Arab world’s first digital capital cityOn December 19, the Council of Arab Ministers of Communications and Information Technology named Riyadh the Arab world’s first ever digital city. The decision came about as a result of the city’s efforts to adopt and promote the use of digital technology to enhance socioeconomic development, improve healthcare and education, and boost community welfare.

Following the launch of Vision 2030, the last few years have seen a significant acceleration in the proliferation of digital transformation initiatives. Highlights include:

Saudi Arabia became 2nd among G20 countries for radio spectrum liberalization

Saudi Arabia became the 1st adopter of commercial 5G technology in the Middle East and North Africa and the third largest globally

Saudi Arabia became the 5th G20 country in internet speed and jumped 91 places from 105th to 14th in the relevant global rankings, with a 51.8Mbps average speed

These achievements helped the ICT sector boost its GDP contribution to 4%, with the Kingdom also rising 16 places in the World Economic Forum’s Global Competitive Index “ICT adoption” category. Today, Saudi Arabia is the region’s largest ICT market and ranks 13th globally, with a value of $28.7 billion in 2019 and strong growth in both the consumer and enterprise segments.

Supported by a young and tech-savvy population, Saudi Arabia is a market of early technology adopters, with one of the highest social media penetrations in the world. Mobile subscribers stood at 43.8 million in 2019, representing a 129% penetration of the total population. Earlier this year, the Ministry of Communications and Information Technology (MCIT) launched a five-year strategy aimed at accelerating the sector’s growth by 50% and elevating its contribution to GDP by $13.3 billion.


Winter 2020


The world’s largest IPOSaudi Arabia made history on December 5 with the world’s largest initial public offering (IPO). Saudi Aramco, the world’s most profitable company, sold 1.5% of its capital, or $25.6 billion of shares priced at SAR32 ($8.53) each, the top of the range at which they are marketed. The company had orders for $119 billion of stock on the day of its IPO, and roughly 4.9 million investors, 15% of whom are Saudi citizens, applied for shares. As of January 13, the IPO size further increased to $29.4 billion.

The IPO significantly augmented the Tadawul’s market capitalization, which stood at $506 billion two days before it listed. At closing on January 1, 2020, the Tadawul’s market capitalization was over $2.4 billion. This means Saudi Arabia’s bourse has the highest market capitalization in the MENA region and seventh largest in the world.


16.0

17.4

17.4

18.4

20.1

20.5

21.9

22.1

23.5

25.0

29.4

0.00 5.00 10.00 15.00 20.00 25.00 30.00

FACEBOOK (2012)

ENEL (1999)

VISA (2008)

NTT DOCOMO (1998)

GM (2010)

AIA (2010)

ICBC (2006)

AGBANK (2010)

SOFTBANK CORP. (2018)

ALIBABA (2014)

SAUDI ARAMCO (2019)

The World's Largest IPOs ($ billion)

Source: Statista, Bloomberg Source: Bloomberg, Moody’s Investor Services

20.8

23.4

30.7

30.7

35.1

59.5

111.1

0 20 40 60 80 100 120

EXXON MOBIL

SHELL

ALPHABET

JP MORGAN

SAMSUNG

APPLE

SAUDI ARAMCO

The World's Most Profitable Companies by Net Income (2018, $ billion)

33.4

6.9 6.45.2 3.3

2.6 2.4 2.3 2.2 2.1

0

5

10

15

20

25

30

35

40

USA CHINA JAPAN HONG KONG

UK FRANCE SAUDI ARABIA

CANADA GERMANY INDIA

The World's Largest Capital Markets by Market Cap (Dec 2019, $ trillion)

Source: Bloomberg

Winter 2020

Number of foreign entrepreneurs licensed bySAGIA keeps growing

STARTUPS

Saudi Arabia is already home to a burgeoning startup community, with SAGIA unveiling the Entrepreneurship License back in late 2017. The license allows start-up founders from all over the world to launch their business ideas in Saudi Arabia without the need for a local partner.

More than 200 startups have been licensed since then, an average of nine each month. In 2019, we welcomed 179 innovative foreign entrepreneurs.

Misk Entrepreneurship World Cup inpartnership with Invest Saudi

The Entrepreneurship World Cup (EWC) global finals were hosted at the fourth annual Misk Global Forum in Riyadh in November.

Featuring 100,000 entrepreneurs from 170 countries, the EWC is the largest and most diverse startup pitch competition and support program of its kind. Winners and finalists are offered life-changing prizes and support including training, resources, networking opportunities, and $5 million in cash prizes. At the close of the EWC, Invest Saudi announced that all 100 finalists would be granted an entrepreneurship license.

50 179258%2018 2019


Winter 2020

25+ Major Events planned for 2020

Saudi Arabia’s sports sector has undergone a complete overhaul since the launch of Vision 2030, driven by three main objectives:


allocated government investments in the

next five years

$1.8B

mass participation and activity levels

increase in 2019, up from 13% in 2015

23% clubs participating

in 10 different sports, up from 9

clubs in 2018

51 internationally-

recognized sports events in 2019, up

from from 9 in 2018

19 internationally

recognized sports events planned

for 2020

25+

committed to support sports clubs in achieving financial maturity and privatization

$670Mprivate sector investment committed through clubs sponsorships until 2023

$320M

Sports sector takes the spotlight in 2019

Number of internationally-recognized sports events hosted in Saudi Arabia

2018 2019

199majorevents

majorevents

2019 major eventsSaudi Pro-Golf ChampionshipWWE Super ShowdownBattle of the Champions (BMX & skateboarding)Saudi International Championship for ParachutingSaudi International Meeting for Disabilities SportFiba 3x3International Handball Federation Super GlobeFormula - E, E-PrixClash of the DunesDirriyah Tennis CupDirriyah Equestrian FestivalItalian Super Cup

1. Achieve 40% participation rate by 2030 by inspiring the community to engage in sports2. Develop Saudi elite athletes performance at international competitions3. Grow and empower the sports economy

SPORTS

Winter 2020

SPORTS


How has the Saudi sports industry evolved in the past 5 years? We have set out to completely uplift the industry. Recently, we have seen a multitude of new federations established that are now spreading awareness on more than 50 different types of sports. As a result, the numbers are positive, hinting at the opportunity. In simple terms, thanks to new opportunities to engage, mass participation and activity levels have increased from 13% in 2015 to 23% in 2019. The sporting ecosystem has also received significant financial support to enable a sustainable framework to help community sport flourish. Under a strategy announced in 2019, 170 clubs in Saudi are benefitting from direct financial support as well as performance-based support to the value of $650 million. Furthermore, the country has proven its ability to learn and adapt quickly and has, in two short years, established a proven track record of hosting global sporting events, building solid relationships with global sporting bodies in the process. These partnerships and events have also helped us to improve and further develop the frameworks that support athletes, sports administrators, and the industry as a whole. The ambitions are clear. Internationally-recognized events in Saudi Arabia more than doubled from 9 in 2018 to 19 in 2019, with more than 25 events planned for 2020.Where do you see the biggest investment opportunities within the sports sector in Saudi Arabia?Sports investment opportunities are massive across the board. Awareness and demand of sports is growing tremendously. With that growth comes an ecosystem that must grow in parallel, presenting an opportunity for the private sector to fill in any gaps in the ecosystem. Our direction s to enable the private sector to do exactly that. This presents lucrative opportunities in every part of the value chain from sponsorships, clubs, sports professionals, facilities, merchandising, and many others. Additionally, a

growing number of large-scale, internationally-recognized events present lucrative partnership and sponsorship opportunities. There is a massive youth market in Saudi Arabia that is energetic and ready to explore new sports. There is a significant increase in the amateur-level practice of sports such as motorsport, mixed martial arts, boxing, and tennis among others. The governance and financial support strategy of clubs will be rolled out to diversify sporting interests beyond football.In what ways is Saudi Arabia facilitating business in the sports sector? Facilitating business in the sports sector has many levels. The base level is establishing the framework, regulations, and the legal pathway for a business to enter this sector. One of the simplest examples of this is the regulations and licensing processes for gyms that were established in 2018. An enabling framework and regulation, combined with a commitment to grow mass and elite sports and host large-scale sports events presents lucrative opportunities for the private sector to play a part. The scale, speed, and ambition of the Saudi sports journey provides an open door to private sector support. What is your 2020 outlook for Saudi Arabia’s sports industry?Robust and rapidly expanding. The world can see potential in the Kingdom and we are quickly earning our place among the major sporting events destinations in the world, with a growing community of participants at the grassroots level. In 2020, we want to increase our momentum in developing infrastructure, athletes, leaders, and administrators. Our goals are to further enable our federations to create more opportunities and to engage and grow mass participation in sports. We have started to see the return on our investment and will continue to grow with private sector involvement locally and internationally.

Interview withPrince Abdulaziz bin

Turki Al FaisalChairman of General Sports Authority (GSA)

Winter 2020


ENTERTAINMENT

Riyadh Season events generate big returns

Diriyah Season brings major sporting events to KSA

Riyadh Season is one of 11 Saudi Seasons that have been shaking up the country’s tourism and entertainment sector. Seasons feature global entertainment acts, sporting events, and shows, all of which are set to transform Saudi Arabia into a leading destination for tourism.

The General Sports Authority (GSA) opened the Diriyah Season on November 11, kicking things off with the launch of the sixth season of the ABB Formula-E, the world's leading electric-only motorsport championship. This was followed by Clash of Dunes, labelled as the biggest boxing event on the planet, between heavyweight champions Andy Ruiz Jr. and Anthony Joshua. The season closed with the Diriyah Tennis Cup, featuring 8 of the world’s top tennis players, and the Equestrian Festival. In addition, the Diriyah districts included a variety of unique entertainment experiences, ranging from outdoor concerts to heritage tours.

Revenues$270M

Tickets sold 50k+

Total international attendance

35%Nationalities80+

International artists performing

18Viewers of Clash of Dunes

100M+

Seasonal jobs34k+

Indirect jobs17k+Visitors10.3M

Tourist visas issued

206k

MDL Beast Festival - a party to remember On December 19 to 21, the MDL Beast Festival – the largest music, arts, and culture festival the Kingdom has ever seen – was hosted for the first time just outside of Riyadh. Headlined by the biggest DJs from around the world including Martin Garrix, David Guetta, Tiësto, Afrojack, and Steve Aoki, performing alongside the best of Saudi Arabia’s EDM DJs including Cosmicat, DJ Baloo, Vinyl Mode, and Dish Dash – the event featured five stages, dozens of art installations, VIP cabins, pop-up shops, performance spaces, and restaurants.

Concert-goers400k

Unique stages5

DJs and artists70+

Districts5

Winter 2020

INTERNATIONAL EVENTS

400

Saudi-RussianCEO Forum Riyadh – October 14th

business leaders

17MoUs signed

300

Saudi-JapanVision 2030Business ForumTokyo – October 23rd

business leaders

12MoUs signed


Winter 2020

January 2020Guangzhou Municipal Government delegation lead by Guangzhou MayorRiyadh - KSA (17 Jan)Arab Health ExpoUAE (27 - 30 Jan)Saudi GOLFJeddah - KSA (28 Jan - 2 Feb)Biban Riaydh 2.0Riyadh - KSA (29 Jan - 1 Feb)

February 2020SAFEJeddah- KSA (2-5 Feb)Deal Makers / EndeavorRiyadh (9-19 Feb)Retail Leaders CircleMENA Summit 2020Riyadh - KSA (10-11 Feb)Asia House - Conference'The Asia House Middle EastTrade Dialogue'Riyadh - KSA (20 Feb)

Global Educational Suppliesand Solutions - GESS UAE (25-27 Feb)FPF 2020Riyadh (25 Feb)Energy Solar Conf.)Riyadh

February 2020INDABASouth Africa (3-6 Feb)

March 2020Middle East ElectricityUAE (3-5 Mar)Foodex Japan 2020Japan (10-13 Mar)Gateway Gulf InvestorForumBahrain (11-12 Mar)

April 2020Saudi MalaysianBusiness ForumJeddah - KSA (2 April)Arabian Travel MarketUAE (20-19 April)

June 2020Symposium on MENAEconomic ReformsRiyadh - KSA (Jun)

September 2020Global FDI SummitRiyadh - KSA (20 Sep)

October 2020EXPO 2020UAE (20 Oct)

November 2020IKTVA forumDhahran - KSA (25-23 Nov)

ASIA

SOUTH AFRICA

INTERNATIONAL EVENTS

You can find us at events all over the world.


Winter 2020

EUROPE

January 2020Davos | World Economic ForumSwitzerland (21-24 Jan)BETTLondon - UK (22-25 Jan)

February 2020ICIS 24th World Base Oils &Lubricants ConferenceLondon - UK (19-21 Feb)

Saudi Italian Business ForumMilan - Italy

March 2020MIPIMFrance (10-13 Mar)LogiMat 2020Germany (10-13 Mar)

May 2020Transport Logistics 2021 MunichGermany (4-7 May)

NORTH AMERICAMarchRoadshow US 1st City DC USA (2-3 Mar)Roadshow US 2nd City LAUSA (4-6 Mar)

MayOTC 2020USA (4-7 May)


Winter 2020

Invest in Saudi ArabiaGetting an investor license takes just: • Find out more at InvestSaudi.sa

• Contact the investment team:Email: [email protected]: 800 244 9990International: 00966 11 203 5777

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