MARKET RESEARCH COUNTRY REPORT

SAUDIARABIA

CONTENTS

Main Industry SectorsEconomic OverviewForeign Direct Investment [FDI]FDI Government MeasuresCountry Strong PointsCountry Weak PointsForeign Trade Overview

MAIN INDUSTRY SECTORS

Agriculture accounts for 3% of the GDP and employs 15% of the active population.

Saudi Arabia is not a very productive sector despite the huge state investments.

Saudi Arabia imports most of its agricultural and food product requirements because of the

geographical and climatic constraints.

Water scarcity is a serious regional problem that the country is likely to face in the coming

years, as growing cultivation of wheat presents a strong threat of water depletion.

The industrial sector represents two thirds of the GDP.

Saudi Arabia is dominated by non-manufacturing activities (oil drilling). The industrial sector

portion, other than oil, is growing due to Saudi state investments, to diversify the economy, the

kingdom having tapped into its financial reserves accumulated by the soaring oil prices.

The services represent 22% of the GDP. This sector is mainly dominated by tourism, financial

and insurance services and the banking sector.

ECONOMIC OVERVIEW

The Saudi Arabian economy is entirely based on oil.

Saudi Arabia has the largest oil reserves in the World and is also the World's biggest oil

producer and exporter.

Oil accounts for more than 90% of the country's exports and nearly 80% of government

revenues.

The recovery of the demand in 2010 helped to stabilize growth and offers hope for a

favorable recovery in 2011.

The big construction works policy led by the government as well as direct foreign

investments and the solidity of the banking and financial system have allowed this

country to become the first economy in the region and one of the major ones in the

world. 

Inflation, which had reached a record 10% in 2008, mainly due to the increase in the

prices of food products has decreased.

The kingdom's authorities wish to abolish all the existing subsidies, which will in fact

lead to an increase in prices. 

ECONOMIC OVERVIEW

The government wants to reduce the kingdom's dependence on the oil sector by

diversifying its economic activities and in developing mainly the agricultural, food, and

industry sectors.

The kingdom has a stable and high-quality banking and financial system.

Private investments are supported by generous government financing and incentive

plans.

The standard of living is one of the highest in the region with USD 15,352

GDP/inhabitant.

Saudi Arabia is still marked by an unemployment rate of about 11%. Tourism generates

highly significant revenues (nearly 4 million tourists per year), exclusively on account of

the pilgrimage to Mecca.

FOREIGN DIRECT INVESTMENT [FDI]

Long hampered by its unattractive regulatory framework, foreign investment in Saudi Arabia

recovered thanks to its accession to the WTO in late 2005 and especially thanks to the adoption of a

more favorable investment legislation in April 2000. 

Saudi Arabia is the main recipient of the foreign direct investments in the Gulf and Middle-East with

USD 24.3b.

FDI stocks are constantly on the increase.

The Saudi Arabian government has invested massively in national infrastructures in order to attract

investments.

FDIs are among the most efficient means of diversifying national economy and providing

investment for the young generations.

FOREIGN DIRECT INVESTMENT [FDI]

The authorities welcome FDI according to their capacity to bring in technology, employ and train the

workforce, aid economic development and valorize local raw materials. 

With controlled inflation and relatively stable exchange rates, openness to foreign capital in upstream

gas, as well as extensive privatization programs are among the advantages attracting the investors into

the country.

The dynamic performance of the banking sector is driving the growth of the non-oil sector.

The access to the world's largest oil reserves, very low energy costs and a high standard of living are

decisive factors for foreign investors.

FDI GOVERNMENT MEASURES

According to the law on foreign direct investment, revised in 2000, foreigners are now

allowed to invest in all sectors of the economy, except for specific activities on a negative list. 

Foreign investors are no longer required to take local partners in a number of sectors and

may own real estate for company activities.

They are allowed to transfer their company money outside the country and can sponsor

foreign employees. 

In order to facilitate investments in the Kingdom, the Saudi Arabian General Investment

Authority (SAGIA) has set up an Investment Services Centre (ISC).

The ISC must decide to grant or refuse a license within 30 days of receiving an application

from an investor.

COUNTRY STRONG POINTS

Once Saudi Arabia became a member of WTO in 2005, the foreign investment climate in

the Kingdom substantially improved.

From an investor's point of view, the country's strong points are economic stability, the

large local market with a high spending power (and a population of over 27 million), sound

infrastructures and a well-regulated banking system.

COUNTRY WEAK POINTS

The week points are the inadequate legal framework in resolving

commercial disputes, the lack of transparency in applying the intellectual

property legislation, the government imposed quotas of Saudi employees

in companies, the delayed payment of some government contracts, a

restrictive visa policy for all workers, a very conservative cultural

environment and enforced segregation of the sexes in most business and

social settings.

FOREIGN TRADE OVERVIEW

The foreign trade share in Saudi Arabia is nearly 90% of the GDP.

Saudi Arabia recorded a highly significant trade surplus in 2008.

Despite the falling oil prices, the country should show a positive balance in the forthcoming

years.

Saudi Arabia's main export partners are the United States, China and Japan, followed by Germany

and U.A.E., as well as the Southeast Asian countries

Saudi Arabia exports mainly crude oil (the black gold represents 90% of its exports), plastics,

organic products and chemicals. 

Saudi Arabia’s main import partners are the United States, Japan, China and Korea, followed by

other Asian countries (India, Taiwan, Singapore).

Saudi Arabia mainly imports vehicles, machinery, electrical equipment, iron, steel and food

products. 

In order to promote international trade, attract foreign investment and diversify the non-oil

sectors, the government has announced plans to establish four "economic cities" in different

regions of the country. 

RELATED SAUDI ARABIAREPORTS

Market Opportunities of products and Services in Saudi Arabia.

Export and investment sector opportunities in Saudi Arabia.

Overview of Trade Regulations, Customs and Standards Saudi Arabia.

Saudi Arabia Investment guide for beginners.

Business and Project Financing in Saudi Arabia.

Business Travel Advisory in Saudi Arabia.

Visit us to download for related reports

COUNTRY LIST China Mexico United States India Canada Russia Hong Kong Colombia Brazil Turkey Indonesia Egypt Singapore United Kingdom Italy Japan

Australia

Germany France Spain South Korea Vietnam Saudi Arabia Poland South Africa Nigeria Argentina UAE Netherland Sweden Thailand Israel and more….

Buy 2 reports get 1 report FREE

International Market Research Report on 300+ topics over 100 countries

Need additional reports ?

Market Size

Market access strategies

Market Share

Import and Export information

Market Analysis

Market Trends

Competitions

Domestic production Best sales prospects

Statistical data

Tariffs and regulations

Distribution and business practices

End user analysis

Trade shows and contact points

Instant online

Delivery

Thanking for downloading

For more information visit us

www.worldresearchreport.com

Or Email us

worldresearchreport@gmail.com