Saudi Arabia will allow full foreign ownership of engineering firms in the Kingdom, according to a Reuters report. The decision was announced by the Kingdom’s Cabinet on the evening of August 7, and says that partnering with a Saudi-owned firm is no longer required.
Prior to the announcement, foreign engineering companies were regulated by the country’s commerce ministry, and were required to partner with a Saudi engineering firm. The move is expected to boost the country’s infrastructure sector.
The Commerce and Investment Ministry and the Saudi Arabian General Investment Authority (Sagia) are said to have been in consultation for a year prior to the announcement being made. Details of the new proposals are still in the process of being finalised but are expected to be released in a week or so, the report said.
There are a number of pre-requisites that firms must satisfy prior to beginning operations in Saudi, including having a proven 10-year track record, and having a presence in at least four other countries. Sagia also has the ability to waive the restrictions if the applicant firm’s presence are found to be in the best interest of the Kingdom.
The authority, under chairman Majid Al Qasabi, has been pushing for a more flexible approach to foreign investment in recent times, since a 2015 policy initiative that highlighted 100% foreign ownership in most sectors in the long term.