ECONOMY

Saudi opens retail sector to more foreign investment

People are seen at the Faisaliya Center shopping mall in Riyadh, Saudi Arabia Oct. 31, 2003. (File photo: AP)

Saudi Arabia has approved rules opening its retail sector to greater foreign investment, official media said on Tuesday, as part of wide-ranging economic reforms.

The cabinet approved rules “for foreign companies to invest in (the) wholesale and retail trade sector with 100 percent ownership,” the Saudi Press Agency said.

It added that the decision is in line with the Vision 2030 plan to wean the kingdom off oil.

The previous foreign investment limit was up to 75 percent.

Crude oil has dropped in price by about half since 2014 but is still Saudi Arabia’s biggest revenue source.

Vision 2030 and the National Transformation Program (NTP), which sets targets for implementing it, seek to boost non-oil revenues and employ more Saudis.

As part of the effort, Vision 2030 talks of “attracting both regional and international retail investors and... easing restrictions on ownership and foreign investment.”

The plan calls for an additional one million Saudi jobs by 2020 in a growing retail sector, while increasing the relatively low proportion of e-commerce.

Cabinet also approved rules for implementing a 2.5 percent tax on undeveloped urban land.

Revenue will go to the ministry of housing which, under the NTP, wants 52 percent of Saudis to own their own homes by 2020.

The current home ownership level is 47 percent.

At an NTP press conference last week in Jeddah, Housing Minister Majed al-Hogail said he wants both local and foreign investors to develop the housing sector, which has traditionally depended on government spending.

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Last Update: Tuesday, 14 June 2016 KSA 22:47 - GMT 19:47
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