The Saudi Arabian General Investment Authority (SAGIA) is pleased to announce the implementation of a new program measuring the impact of foreign investments to the Kingdom. It will be launched on 1st Muharram, 1436 AH (24 October 2014). The program will measure the impact of licensed entities according foreign investment identified objectives as per the below:
- Transfer and localization of technological know how
- Diversification of the Kingdom’s economy
- increasing of exports and decreasing of imports
- Developing the Saudi human resources
- Reinforcing economic competitiveness and its products in both the domestic and foreign markets
- Balanced development among the different regions of the Kingdom.
The firms which demonstrate the above will be granted special incentives and privileges to help promote and motivate excellence and sustainability. According to this program, firms will be divided into the following categories: Strategic, Distinctive, Advanced, Limited, Innovative and Promising, and Contracting. The categories are based on specific and objective quantitative and qualitative indicators. The table below gives further details on the categories.:
1. Strategic
Firms committed to deepening the value chain across targeted sectors, such as: transportation, healthcare, education and technology that are bringing in associated investments
2. Distinctive
Firms employing not less than 10 Saudis, with monthly wages of a minimum SR10,000 each, and are within the “platinum” category prescribed by the Ministry of Labor; firms with a labor force that exceeds 100 employees and a Saudization rate of over 50%; and finally, the top 10 firms in different sector based on their capital.
3. Advanced
Publically listed companies or international consulting firms with no less than 25 employees, in which the Saudization range is within the “platinum” category; contracting companies with more than 300 employees with monthly average wages of not less than SR5,000 per employee, and in the “green” category prescribed by the Ministry of Labor.
4. Limited
Contracting companies with less than 300 employees with monthly average wages less than SR5,000 per employee; individual establishments, firms working in the restaurant industry, and technology companies that are not internationally classified and industrial workshops
5. Innovative and Promising
Innovative firms which have registered patents
6. Non-Classified Contracting Entities
Contracting companies without classification, will be granted a temporary license to help them establish a sustainable foundation and obtain categorization from MOMRA
SAGIA’s board of directors approved resolution No. 359/1, dated 19/09/1435 AH, that states the advantages and benefits granted to licensed projects which includes license duration, service priority in the business centers, and the annual financial fees associated with their services.
| Category | License period (Year) | Service priority in Business centers | No. of represen- tatives that can be listed to represent the firm | Listing in the website of SAGIA | Identify customer relations represen- tative for the firm | Annual fee Due in Adv upon renewal |
|---|
Strategic | 5 | 1 | 4 | Yes (profile and success story) | Yes | 30,000 |
Distinctive | 3 | 2 | 3 | Yes (profile and success story) | Yes | 30,000 |
Advanced | 2 | 3 | 2 | Yes (profile) | No | 45,000 |
Limited | 1 | 4 | 1 | No | No | 60,000 |
Innovative and Promising | 1 | 1 | 1 | Yes (profile) | No | 10,000 |
Non-Classified Contracting | 3 | 3 | 2 | No | No | 500,000 (For the three years) |
SAGIA is currently developing formulas to measure the impact, based on quantitative data derived from the balance sheets of these firms, as well as the qualitative data derived from their work on the ground. These standards are added to the above mentioned criteria, so as to be automatically calculated by the system currently employed in the investors' services without the need for human intervention. Furthermore, the developed criteria will be revised periodically and refined for the purpose of developing effective measurement mechanisms. The standards that will be programmed in the system automatically will include (and not limited) the following:
1. Profit rate growth and reversible losses.
2. Rate of sales or exports of the firm's products out of the total sales.
3. Rate of the local content consumption of the materials out of the total raw materials used.
4. The stock/inventory turnover rate, compared to average ratios of different sectors.
5. Rate of the operational revenues out of the total revenues.
6. Presence of technological content, or patents.
7. The product is manufactured according to the international standard specifications.
8. There are research laboratories or training centers.
We trust this program will come to your satisfaction and help boost development in the national economy.
For questions and inquires you may log them on your entities account in SAGIA’s electronic portal for services.