This methodology coincides with Saudi Arabia’s implementation of a package of economic and legislative reforms, which pushed the economy to achieve unprecedented growth rates last year.

G20 countries

The highest among the economies of the G20 countries, in addition to sparing the economy from many negative repercussions that could have occurred due to, The uncertainty, geopolitical tensions, and tightening of monetary policies that the world is witnessing today.

The adoption of the new methodology, which follows international standards regarding the flow of foreign investments, comes at a time when Saudi Arabia is preparing to host a group of major global events, including, for example, “Expo 2030” and “World Cup 2034”, which are occasions and events that expand the horizon of investment opportunities in… Several sectors.

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Increase foreign investment in output

In this context, the United Nations Trade and Development Organization (UNCTAD), the body that issues the World Investment Report, confirmed that the anticipated new methodology follows international standards.

According to the Balance of Payments Guide issued by the International Monetary Fund. The World Bank also welcomed this approach, agreeing with the Fund’s recommendations contained in its report on the Kingdom, which in turn forms the basis of the new methodology.

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This certainly demonstrates the seriousness of the Saudi Ministry of Investment in working carefully and striving to increase the attractiveness of the local investment environment.

Saudi Vision 2030

In order to achieve the goals of Saudi Vision 2030 in increasing the contribution of foreign direct investment to the gross domestic product, to reach 5.7 percent, and raising the private sector’s contribution to output from 40 percent to 65 percent by 2030, making the Kingdom among the 15 largest economies in the world.

In the language of investment, convincing an investor to direct his capital to a particular economy or sector is considered one of the most difficult steps in the journey of any entity responsible for attracting these investments.

As investors in the world are always monitoring developments in the legislative environment, especially investment data, the size of the economy’s growth, and opportunities.

Available, they also give security a basic criterion in their investment decisions, all of which are pillars that characterize the Kingdom of Saudi Arabia.

This opinion is supported by local data confirming that foreign direct investment flows recorded a growth of 10.2 percent during the first quarter of the current year, on an annual basis, and the balance of this investment recorded a growth of close to one percent during the first quarter of 2023. Despite the uncertainty surrounding the global economy.

The Saudi Arabian General Investment Authority (SAGIA):

The Saudi Arabian General Investment Authority (SAGIA) plays a crucial role in facilitating foreign investment in the Kingdom.

SAGIA has recently introduced a new methodology that aims to streamline the investment process, making it more efficient and investor-friendly. This methodology focuses on three key pillars:

a) Simplified Procedures:

b) Enhanced Investor Support:

c) Sector-Specific Opportunities:

Incentives for Foreign Investors:

To further incentivize foreign investment, Saudi Arabia offers a range of attractive incentives. These include:

a) 100% Foreign Ownership:

b) Tax Benefits:

c) Access to Regional Markets:

Infrastructure Development:

Saudi Arabia has been investing heavily in infrastructure development to support economic diversification and attract foreign investment.

The Kingdom’s ambitious projects, such as NEOM, the Red Sea Project, and Qiddiya, offer immense potential for investors.

These projects aim to create new economic sectors, generate employment opportunities, and enhance the quality of life for residents and visitors.

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Data transparency

In this regard, the Minister of Investment, Engineer Khalid Al-Falih, says that the new methodology is part of a series of ongoing reforms to improve the quality and transparency of data in the Kingdom, under the umbrella of the Kingdom’s Vision 2030.

And to achieve the goals and initiatives of the National Investment Strategy, which contributes to enabling investors and decision-makers to make better decisions.

Their decisions are better, and supports enhancing the attractiveness of the investment environment in the Kingdom, in line with the goals it seeks through launching the national investment strategy, developing special economic zones, the national initiative for global supply chains, and launching mega projects.

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Kingdom’s performance

Al-Falih states that the data shows the progress of the Kingdom’s performance in fixed capital formation and foreign direct investment.

Which strengthens the Kingdom’s position as a leading investment destination, adding that the Kingdom is keen to keep investors constantly informed of the most important indicators and data in the Saudi economy, and the investment opportunities available in it.

Quality, through the “Invest in Saudi Arabia” platform, which displays investment opportunities throughout the Middle East.

In light of these confirmations, it is expected that the new methodology will draw the attention of investors around the world to some investment sectors and untapped opportunities, which means that the year 2024 may witness a clear development in terms of the flow of global investments to Saudi Arabia, and in different sectors.

Five dimensions that stimulate investment

It is expected that the new methodology will be reflected in the Saudi investment environment according to five main dimensions:

First

First , the new methodology is consistent with followed international standards, and this means greater reliability in the numbers and data issued by the country’s investment system.

Secondly

The second dimension is based on the fact that it will give the local investment environment greater vitality. Instead of concentrating foreign investments in specific sectors, this methodology will open the eyes of foreign investors to other investment opportunities and subsequently increase their appetite for pumping more investments.

Thirdly

As for the third dimension , it concerns investments that come with Saudi capital, that is, local investments, as the new data issued by the investment system and the standards followed will have a clear impact on the decisions of Saudi investors in light of the announced numbers, which means more seizing investment opportunities on the one hand, and from partnerships. Quality with foreign investors on the other hand.

Fourth Dimension

The fourth dimension focuses on the fact that international think tanks and international classification agencies will be more comfortable dealing with the issue of foreign investments flowing into Saudi Arabia.

At a time when Riyadh is preparing to begin implementing its decision that requires the Kingdom to host the main headquarters of the international companies that it deals with, which means more investments that it needs. To careful follow-up from international expert houses.

Fifth dimension

In the fifth dimension , Saudi Arabia confirms that it is moving forward in developing the investment system, stimulating the investment environment, and implementing more reforms that create fertile and solid investment ground that can be relied upon and started from.

Accurate and detailed methodology

The head of the General Authority for Statistics, Dr. Fahd Al-Dosari, confirms that the methodology for calculating the foreign direct investment index was adopted after technical consultations with the IMF.

Explaining that it will contribute to enhancing the level of accuracy, detail, and comprehensiveness of foreign direct investment indicators, in a way that serves decision makers in designing policies that will provide An attractive investment environment that highlights investment opportunities in the Kingdom.

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It is reported that the Authority seeks, through this methodology, to diversify data sources and publish more detailed statistics, such as the balance and flows of foreign direct investment according to economic activity and countries investing in the Kingdom.

The Authority also works to provide indicators more periodically through specialized quarterly surveys.

Dr. Saad Al-Shahrani

For his part, the Undersecretary of the Ministry of Investment for Economic Affairs and Investment Studies, Dr. Saad Al-Shahrani, states that access to high-accuracy data is extremely important, not only to measure progress and development, but also to monitor and improve the performance of the local economy, and follow up on the performance of investment, which constitutes about 25 percent of GDP in the Kingdom.

It is noteworthy that during the past two years, the Saudi Ministry of Investment has worked on analyzing more than 70,000 financial statements for many companies, covering the past fifteen years, while the results of this huge project will support decision makers, analysts, and specialists in preparing studies and analyses, as well as It will form the infrastructure to work on determining investment priorities and monitoring the performance of sectors and countries investing in the Kingdom.

Kingdom’s Vision 2030.

The preparation and development of the new methodology is based on the unprecedented economic transformation that the Kingdom is witnessing, as it is considered one of the fruits of the Kingdom’s Vision 2030.

which represents the road map and plan for economic growth and diversification, and includes the Kingdom’s endeavor to adopt the best international practices to achieve the highest levels of transparency and governance.

The Kingdom is considered a pioneer in updating foreign direct investment data by analyzing financial statements as a source of annual data, at a time when few countries follow this methodology.