Saudi Investment Authority Mulls Tax Breaks For Foreign Investors

by Lorys Charalambous, Tax-News.com, Cyprus

16 August 2005

The Saudi Arabian General Investment Authority (SAGIA) is studying new proposals to attract foreign investment, including exemption of investment projects from income tax for 15 years, Arab News has reported.

According to SAGIA Governor Amr Abdullah Al-Dabbagh, the organization is working on the proposals with a number of government departments. The tax breaks would, after approval, apply to various industrial sectors, including mineral, agricultural, fisheries, desalination, railway, road and sewage projects.

“We are also weighing prospects of including foreign companies operating in less industrialized regions among the beneficiaries of soft loans being provided by the Industrial Development Fund,” the SAGIA chief was quoted as saying.

SAGIA has reported a 4,596 percent increase in investments in licensed projects in the second quarter of this year compared to the same period last year. The total amount invested during the first half of 2005 reached SR65 billion (US$17.3 billion).

SAGIA, in cooperation with the World Bank, is currently conducting a complete evaluation of the investment environment in the Kingdom with the goal of measuring improvements made in the investment climate.

Last month saw the approval of 17 agreements between SAGIA and relevant government departments to make Saudi Arabia more investment-friendly and remove obstacles facing investors. These agreements aim to encourage the private sector to set up specialized academic institutions in cooperation with renowned world universities, foster industrial projects by giving exemptions on customs tariffs and grant facilities such as entry visas to foreign investors.

They also streamline judicial procedures for the resolution of trade disputes, strengthen guarantees for investors, and speed up the process of collecting imports from entry ports, the SAGIA chief said.

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