In The Name Of Allah, The Most Merciful, The Most Compassionate Arriyadh holds a strategic and pivotal role as the capital of the Kingdom of Saudi Arabia which is the birthplace of the Message of Prophet Mohammed (Peace be upon Him) and the location of the Two Holy Mosques. The dynamic capital hosts diplomatic, Islamic, political, economic, financial, trade, scientific, technological and educational institutions and is a fast developing national, regional and international center. Arriyadh is also a hub of administration with national cultural and heritage bodies and activities. the Custodian of the Two Holy Mosques King Salman Bin Abdulaziz (may God bless him) has over many decades actively supported Arriyadh and its remarkable development. Today, with his Crown Prince, Deputy Prime Minister, Minister of Interior; and the Deputy Crown Prince and Defence Minister; King Salman is ably guiding the development of the Kingdom, its capital and provinces and ensuring the welfare, security and prosperity of the nation’s population. Evidence of this is seen in the range of visionary development and infrastructure projects, which are helping to transform the Kingdom and the wider region. The development process in Arriyadh does not focus on specific areas or sectors. Rather it embraces a wide and comprehensive range of projects and needs. These include ambitious programs in transportation. The King Abdulaziz Public Transport Project in Arriyadh City is the largest of its kind and will provide a network of metro and bus services in the capital. The King Khaled International Airport Development Project will considerably expand passenger and airfreight capacity; and national and regional projects to develop railroad and road networks will soon offer remarkable improvements in transportation within the Kingdom and GCC. The King Abdullah Financial District, the City of Communication and Information Technology, nano- technology and research centers are also emerging and helping to provide new and exciting opportunities for our youth. Other major projects in health, education, environment, infrastructure, housing, manufacturing, sport, welfare, culture and heritage are helping to make Arriyadh a favored destination of leading projects and secure inward investment. The Investment Climate Report is part of the ongoing efforts of the High Commission for the Development of Arriyadh to annually provide up to date information and highlight the numerous and emerging opportunities provided by the city. As well as revealing the progress in our capital and nation as a whole, this report in its English edition, is a welcome and valuable reference and resource for those around the world who are keen to learn of the investment opportunities in Arriyadh as well as for the general reader interested in the remarkable story of our capital and nation. Faisal Bin Bandar Bin Abdulaziz Governor of Arriyadh Chairman of the High Commission for the Development of Arriyadh Arriyadh has become a favorite destination for both regional and international investors seeking promising and rewarding opportunities in a secure urban environment that offers sophisticated infrastructure and a quality lifestyle ideal for achieving aspirations. Our nation’s leadership, may God bless them, has ensured that the capital has been given attention through careful and effective planning to provide expanding and ever broadening economic development prospects. The visionary and ambitious plans, programs and projects for the city also open the doors wide to welcome local, regional and international investors in a wide range of economic sectors. Arriyadh’s favourable position is enhanced by a comprehensive range of strategic mega projects, which are being executed under the leadership and supervision of His Royal Highness Prince Faisal Bin Bandar Bin Abdulaziz President of the High Commission for the Development of Arriyadh, may God bless him. These multi- sectoral projects, along with localisation and diversification of the economy are promoting and accelerating Arriyadh’s pace and quality of development. The High Commission for the Development of Arriyadh publishes the Investment Climate Report (ICR) in both Arabic and English editions every year. It serves to introduce readers to the investment environment of the capital. It highlights facilities and available privileges as well as presents current economic indicators. It also explains systems and procedures and provides a valuable guide to bodies that are concerned with investment in the city. The High Commission for the Development of Arriyadh, government agencies and the private sector are actively engaged in the planning and continuing development of the capital. It is our hope that this edition of the Investment Climate Report will provide a useful and informative resource for all those interested in the numerous opportunities that our capital offers to businesses and entrepreneurs. Ibrahim bin Mohammed Al-Sultan President of Arriyadh Development Authority Member of the High Commission for the Development of Arriyadh Contents Kingdom of Saudi Arabia: General Information 17 Basic Law 18 The Saudi Emblem 18 Membership in Political, Economic, Regional and International Organizations 18 The Kingdom’s Regions 18 Main Cities 18 Geographic Features 18 Working Hours 19 Official Holidays 19 Currency 19 ARRIYADH CITY CONTINUOUS DEVELOPMENT AND PROMISING INVESTMENT OPPORTUNITIES 21 Theme One: the Importance of Arriyadh 22 Arriyadh is the Capital of the Kingdom of Saudi Arabia 22 Arriyadh is the Headquarters of Central Governmental Agencies 22 Arriyadh is the Location of Headquarters for Banks and Major Corporations 22 Arriyadh is the Largest Population Center in the Arabian Peninsula 22 Arriyadh is the Location of Central Gulf Bank 22 Other Aspects Relating to the Importance of Arriyadh 22 Composition of Population 22 Population Pyramid 23 Gender 24 Households 24 Labour Force 24 Cost of Living 24 Theme Two: Infrastructure in Arriyadh 25 Development of King Khaled International Airport (KKIA) 25 Ports and Railroads 27 Telecommunications, Communication and Information Technology 27 Post 28 Electricity 28 Water and Sanitary Waste 28 Theme Three: Economic and Service Sectors in Arriyadh 30 Industrial Sector 30 Agricultural Sector 31 Trade Sector 32 Construction and Building Sector (Contracting) 33 Real Estate Sector 33 Education Sector 34 Tourism Sector 35 Health Sector 37 Finance and Banking Services Sector 38 Telecommunications and Information Technology Sector 39 Theme Four: The High Commission for the Development of Arriyadh and its Role in the 40 Development of the City Introduction to the Commission 40 The Comprehensive Strategic Plan for Arriyadh 40 Sub-Centers 42 Development of the Eastern Sub-Center 44 Development of both Northern and Eastern Suburbs 44 High Committee for Environment Protection 45 Public Services Coordination Plan 45 Intersection Tunnel of Makkah Road with Salah Edden Al Ayoubi Road 45 Upgrade of Abu Baker Asseddik Road Project 45 Comprehensive Plan of Public Transportation in Arriyadh 46 Wadi Hanifa Rehabilitation Program 52 Wadi Namar Development Project 52 Wadi Laban Development Project 53 King Fahad Library Expansion Project 53 Comprehensive Plan for Storm Water Drainage in Arriyadh City 53 Development of Thumamah Park 53 Riyadh Public Park 53 Theme Five: Riyadh Chamber of Commerce and Industry 54 The Chamber’s Role in the Enhancement of the Investment Climate 54 The Role of the Investment Center in the Chamber 54 The Role of the Chamber’s Other Centers and Departments 54 The Kingdom of Saudi Arabia and the Enhancement of Investment Climate 57 Theme One: Macro-Economic Indicators in the Kingdom 58 State Budget for the Fiscal Year 2015/2016 58 Future Vision of the Saudi Economy 59 Realized Standard Financial Surpluses 59 Gross Domestic Product (GDP) 59 Contribution of the most Important Economic Sectors 59 Balance of Payments 59 Foreign Trade Relations 60 The Volume and Development of Exports and Imports 60 Cost of Living Index 62 Wholesale Index 62 Per Capita Income 62 Labour Market Structure 62 Transport and Telecommunications Infrastructure 64 Major Producing Sectors 67 Theme Two: Policies and Measures Supporting Investment in the Kingdom 71 Economic Strategy and Privatization 71 The Privatized Sectors 72 Projects Supporting the Kingdom’s Transfer to a Knowledge-Based Economy 72 Economic Cities 73 Economic Freedom and the Enhancement of Investment Climate 75 The Kingdom and the World Trade Organization (WTO) 77 Saudi Arabia’s Capital Market 78 Real Estate Investment, Companies and Funds 79 Banking System Development 80 Theme Three: Rules of Investment in the Kingdom and Related Procedures 83 Labor Law, Nitaqat System and Hafez System 83 Nitaqat System 83 The Foreign Investment Act 83 Capital Market Law 84 Corporate Law 85 Commercial Register Law 85 Trade Agencies Law 86 Trademarks Law 86 Commercial Papers Regulations 87 Customs Law 87 Income Tax Law 87 Calibration and Standards Law 88 Cooperative Insurance Law 88 Social Insurance Law 88 General Environment Law 89 Intellectual Property Rights 89 Commercial Mortgage Law 89 Competition Law 90 Mining Investment Law 90 Electronic Transactions Law 90 Theme Four: Higher and Major Investment Authorities in the Kingdom 92 Council of Economic and Development Affairs 92 Saudi Arabian General Investment Authority (SAGIA) 93 The Saudi Commission for Tourism and National Heritage (SCTH) 93 Royal Commission for Jubail and Yanbu 93 The Capital Market Authority (CMA) 94 Communications