Saudi Arabia will allow foreign companies to own engineering services companies in full, without requiring them to partner with a Saudi-owned firm, the Saudi cabinet announced on this month. The Saudi government took another step along the road to welcoming more foreign investors into the Kingdom with the approval of new measures to encourage outsiders to get involved in the engineering industry, which is expected to become a boom sector as new infrastructure is built under the Vision 2030 strategy.

The foreign company would need to have existed for at least 10 years to qualify, the cabinet statement said. It would also need to be multinational, with operations in at least four countries.

The kingdom’s investment authority, Saudi Arabian General Investment Authority (SAGIA), announced last year that it would accept applications for wholly owned engineering consultancies but did not set out procedures for implementation.

SAGIA added that any exemptions to these conditions will be applied in special cases.

Previously, foreign engineering companies were regulated by the commerce ministry and required to partner with a Saudi engineering firm.

Saudi Arabia is liberalizing its business regulations to attract more investors and diversify its economy away from oil.

The opening of such investment opportunities for foreign companies is rewarding for UAE businesses due to the construction activity and a large number of projects in this sector in Saudi market.

It is a positive step forward. Foreign engineers and consultants are looking to get involved in and benefit from the expansion of infrastructure the Kingdom is experiencing, and the new corporate structure will give them more confidence to proceed.

 

The sources: Riyadh - Sabq