Saudi Arabia’s commercial sector is growing rapidly. This is mainly due to generous government incentives such as the provision of long-term interest-free loans and support services and facilities. In addition, chambers of commerce and industry in the major cities and regions promote commercial ventures.
There are some 584,000 licensed firms involved in commercial activities in the Kingdom. Their total invested capital is estimated at more than $54 billion.
The sector is overseen by the Saudi Arabian General Investment Authority (SAGIA), which offers private entrepreneurs free consulting and support services and publishes lists of investment opportunities. In November 2005, SAGIA announced plans to open offices abroad, including in China, the United States, Britain and Germany to attract investment in infrastructure projects.
The role of the private sector in commerce is substantial – private companies account for some 48 percent of the nation’s GDP of $248.82 billion. They manufacture, distribute and sell domestic products.
Private companies also handle most imports of consumer and industrial goods and the bulk of the exports of non-oil products. Saudi Arabia is among the top 20 export and import markets in the world, and exports of non-oil products to some 90 countries average around six billion dollars per year.
Foreign investment is also growing in the Kingdom. Investors from all over the world are joining Saudi partners to set up ventures, attracted by the Kingdom’s political, economic and social stability, modern infrastructure, inexpensive energy supplies and strategic geographic location.
On April 11, 2000 Saudi Arabia made it easier for foreign investors in the Kingdom by introducing a new law giving foreign investors the right to the same benefits, incentives and guarantees offered to Saudi individuals and companies. It also allows foreign investors to own property and real estate.
The future of the commercial sector is promising. Saudi Arabia’s membership in the WTO boosts commercial activity and provides Saudi products with more opportunities in global markets. Another positive development is the formation of free-trade zones that Saudi Arabia has undertaken with several neighboring countries.