Saudi Arabia has many relatively high advantages in some strategic sectors at regional and global levels, which make it attractive for international investment. For example, the Kingdom is ranked first with regards to prices of energy provided for investment projects. (Saudi energy report link 2007).
Generally speaking, investment in Saudi Arabia realizes high profit ratios for local, foreign and shared projects, with low risk exposures, and a simple form of taxes and property registration fees. Here, the Kingdom, globally, occupies the fifth position regarding taxes and forth in property registration costs, according to business performance reports 2006/ 2007 issued by the International Bank.
According to a comprehensive study published by Arab Forbes Magazine’s in late 2006 assessing the performance of (1616) joint-stock companies in the Arab world, the first three positions were Saudi companies, and among the best 50 companies, 22 were Saudi companies, including Saudi and joint companies, applying a number of standards such as: operational efficiency, market value, sales, revenues, dividends, return on equity, return on two last year assets (2004 - 2005), in addition to the company expected growth.
Another example in the banking services sector is that the ten Saudi banks are of the best banks, most growing and profit realizing in the Arab World. These Saudi banks comfortably rest within the list of biggest 1000 banks of the world, according to the Financial Times 2006. Also the 3 biggest banks in the Arab world are Saudi.
The Kingdom of Saudi Arabia is the biggest free economic market in the Middle East. It acquires 25% of gross national Arab product and has the biggest oil reserve in the world (25%). Saudi Arabia is the most ideal environment for projects depending on energy consumption because it provides energy for investment projects with the least prices at global level. In addition, there are many natural resources in mining that are supported by the geographical location of the Kingdom making them of easy access to European, Asian and African markets. Saudi market has a high purchasing power and of continuing expansion.
The Saudi Riyal is one of the most stable currencies in the world. There was no significant change in its exchange value during the last 3 decades. There are no restrictions on foreign currency exchange and outgoing money transfers. Inflation rates in Saudi Arabia are very low and the Kingdom is endeavoring to sign bilateral agreements with an increasing number of countries regarding investment encouragement, protection and arrangement of taxation issues.
All the above mentioned advantages made the report issued by Milken International Corporation in Feb. 2007 to classy the Kingdom of Saudi Arabia in the first rank worldwide with respect to total economic environment classification i.e. environment capability for project management and financing. Milken Corporation focused on the low and stable interest rates, low inflation and low taxes, compared with international standards.
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