THE World Bank and the International Finance Corporation (IFC) have recently released its ‘Doing Business' report for 2009, and there was good news for Saudi Arabia. The report lists the Kingdom and Bahrain as the best places in the Gulf to conduct business with ease. Foreign investors in the country unanimously welcome the report's overview and say that it jibes with their experience of doing business here. “I traveled to almost the entire world including the US, Europe, Africa, Far East and the Middle East but I found that Saudi Arabia is the most rewarding place for investment,” said Mohammad Asghar Qureshi, CEO of Qureshi Telecom and Contracting Company Limited (QTCC). “Every place has its pros and cons for doing business. But the plus point here is the stable economic situation and the Islamic rules and regulations,” said Qureshi, who has been running his business in the Kingdom for the past 26 years. The World Bank and IFC report is based on the speed and level of reforms in the countries. According to it, Saudi Arabia has reformed the most. The report also ranks the Kingdom ahead of advanced economies such as that of Germany and Austria. Qatar is listed third, followed by the UAE while Kuwait and Oman feature last on the list. The six Gulf Cooperation Council (GCC) countries have emerged among the top 60 countries in the world with regards to their favorability for successful businesses. Seconding Qureshi, M. Mumtaz A. Kahloon, the CEO of City Link Establishment for Cargo, Travels and Tours, said the Kingdom has one of the strongest economies in the region backed by its oil rich resources. “Saudi Arabia is fast progressing in production of goods and commodities. Availability of resources in the local market coupled by a very low taxation rate makes the Kingdom a lucrative place to invest in,” he said. Kahloon said that while opportunities abound, the lack of skilled labor and visa issues can be a hindrance. “The region may not be able to take full advantage of its potential for a blooming investment market unless a balance is created between the both,” he said. Kahloon assumed that the new cities of Rabegh, Jubail, Jizan and Hail, where construction work is under progress, will open up new avenues for investment and business opportunities in the region. The Kingdom is the largest economy in the Middle East with its gross local production exceeding $300 billion, and a growth rate of 6 percent during the last three years. A leading oil producer in the world, Saudi Arabia is making efforts to diversify its economy, paving the way for new business and investment opportunities. Shamshad Ali Siddiqui, Managing Director of Amaq Contracting and Secretary General of Pakistanis Investors Forum in Riyadh, made business trips to various countries. He said, “Saudi Arabia is the only country in the Middle East where you can run your business without any bureaucratic hurdles. You can transfer your profits to not only your country, but to anywhere in the world.” According to the Saudi Arabian General Investment Authority (SAGIA), the Kingdom doesn't impose multiple taxes, except 20% profit taxes on foreign companies and carrying over the losses of unlimited investments. Although Siddiqui didn't think there were any teething troubles faced by businessmen in Saudi Arabia, he said the government can take further steps to facilitate private enterprises. “The government should permit easy visas for manpower, remove the sponsorship system and give a multiple exit re-entry permit for at least 5 years,” he said. According to SAGIA, Saudi Arabia's foreign investment swelled by nearly $25 billion to smash the $400 billion mark for the first time in July this year, and is further expected to surge by the year end. It is a 12-fold increase in the last five years, and the investments are expected to leap to nearly $1trn by 2018. “An investor should visit the Kingdom prior to starting a business. He should meet government officials and the local business community, get a legal license and thereafter, abide by the rules and regulation of the Saudi government,” Siddiqui said. Saudi Arabia represents the largest consumer market in the GCC. “Saudi Arabia is different from Dubai or other Gulf markets; it is the safest business center where foreign investors like us feel confident about investing,” said Zulqiurnain Ali Khan, CEO of Zultec International Co. Ltd and Zultec Fleet Management Co. Ltd. Liberalization in the Kingdom accelerated in 2005 with the launch of the national “10x10” program consisting of reforms to enhance its business environment. Pointing that Saudi Arabia comprises 67 percent of the Middle East market, Khan said the country has a good strategic location facilitating business with Europe, Africa and other countries. He, however, said there may be some difficulties for small and medium scale private enterprises. “It is not easy to find trained staff or get them from other countries; we have to respect the Saudization policy. Banks are not flexible, but it should be only a matter of time that all things get streamlined,” he said. Khalid Aziz Shah, CEO of Raqam International Labels and Ribbons Factory, said there can be an uncertainty in clearance of payments in some business dealings. “This is a major concern as there are no proper government rules and regulations to clear payments. If some one does not pay or deposit a check which later on bounces, then there is nothing that can be done. The government should take strong steps to protect businesses,” he said. Shah also called for easy visa procedures for foreign workers. “You cannot run your business without labor and it is very hard to find them here. The labor department should issue visas to foreign investors and restrict them from transferring the sponsorship to any other local company; this will control the fake visa market,” he said. The SAGIA lists Saudi Arabia as among the first five countries in the world to have easy labor recruitments, flexibility of work hours and no history of labor strikes. It is also among the first 25 countries having the highest total cash savings (Index of Economic Freedom), among the first 24 countries to have the least cost loans from Saudi Industrial Development Fund and to have provision of assistance and consultancy by the General Investment Authority. All business units in Saudi Arabia are required to obtain membership of their local Chamber of Commerce which are well resourced and are a source of business information. The process of getting a business license is simple but can take long, said Shah. “There are no official hurdles in the one spot operation by SAGIA officials who are very polite,” he said. Shah said land for commercial purposes is obtained by registering with the SAGIA and the land transfer department. “This will not take very long. It is easy as there are no government restrictions or hidden costs like in other GCC countries,” he said. “The Kingdom has low cost operations even than that of China. But you must take care of your credits,” said Shah. Calling Saudi Arabia ‘a gem of a place', Kahloon said, “Anyone thinking of investing in the country should know that this is one of the best places to live with your family in the most secure and religious environment.” __
