Apr. 4, 2016


HE Abdullatif A. Al-Othman

Saudi Arabia

HE Abdullatif A. Al-Othman

Former Governor and Chairman of the Board of Directors, SAGIA

"Due to Saudi Arabia's demographics and its unique location on the map, almost all sectors are open for business."

BIO

HE Abdullatif A. Al-Othman brings over 30 years of experience in planning and managing oil and gas projects to his current position with SAGIA. He began his career with Saudi Aramco in 1981 as an engineer in. During his tenure, he worked on the Gas Gathering Project, the Ras Tanura Refinery Modernization Project, the Qasim Refinery Project, and the Southwest Refinery Project, amongst others. In June 2001, he was named the Executive Director of Saudi Aramco Affairs before being appointed Vice President of Saudi Aramco Affairs in September 2001. He later served as Senior Vice President of Finance for Saudi Aramco and as Chairman of the Board of Directors for the Sadara Chemical Company. He earned a degree in civil engineering from King Fahd University of Petroleum and Minerals and a master’s degree in business administration from the Massachusetts Institute of Technology as a Sloan Fellow in 1998.

A number of legal developments emerged in 2015 in Saudi Arabia, particularly interest from a FDI sources. How would you assess the regulatory environment for business in the Kingdom?

The Kingdom is home to one of the world's most progressive regulatory environments for doing business. All sectors are open except for those related to national security. We allow 100% foreign ownership in most sectors, with no income, sales, or property taxes. Companies can enjoy a competitive corporate tax rate and the full repatriation of profits, capital, and dividends. The government is committed to maintaining this, as well as introducing new initiatives to support the Kingdom's business-friendly environment. Most recently, we have announced that retailers and wholesalers will be able to own 100% of their business in Saudi Arabia. With other national programs to make our economy more competitive on the horizon, I anticipate that this trend of increasing the ease of doing business in the Kingdom will continue.

One of SAGIA's objectives is to encourage the role of the private sector by reducing bureaucracy. What are the sectors that offer the best opportunities to local and global investors?

Due to Saudi Arabia's demographics and its unique location on the map, almost all sectors are open for business and have great opportunities for both local and international investors to enjoy. The Kingdom has a population of approximately 31 million with significant purchasing power. It is also has a young population, with 70% under the age of 30. In many currently developing sectors, investors have the chance to gain significant domestic market share before their competitors can. Using the Kingdom as their launch pad, investors and companies can expand their reach. Riyadh is a two-hour flight from 150 million people, and a four-hour flight from a total of 1.5 billion people in some of the world's fastest growing consumer markets. With these facts in mind, there is a clear and lucrative export opportunity for established companies in Saudi Arabia. As part of our economic diversification strategy, however, there are a number of priority sectors in which we are focusing on attracting investments through leveraging spending. This integrates the value chain and increases the competitiveness of the Kingdom's sectors. Under the National Investment Plan (NIP), we have worked with a number of government ministries to harness their yearly spending. With each, we have created, or are creating, investment plans that identify investment opportunities vis-à-vis annual ministerial procurement practices. These opportunities are worth hundreds of billions of dollars. For example, in the transportation and healthcare sectors alone we have investments worth approximately $400 billion for the coming decade. You can also expect to see similar opportunities in industrial spare parts, downstream chemicals, ICT, and much more. To enjoy these opportunities, we are inviting foreign and local companies to make direct investments in Saudi Arabia.

What are the main guidelines of SAGIA's plan to increase competitiveness in specific sectors?

I believe it is important for SAGIA and Saudi Arabia to have a positive reciprocal relationship with our local and international investors. For those investors who want to help us add value to the Saudi economy, we want to help them add value to their business here in the Kingdom. As part of the RFP process in government entities for megaprojects, we are advocating that companies submit localization plans as part of their proposals. These plans will be taken into close consideration when evaluating the overall strength of each proposal. Ultimately, we believe this approach is the right one and that it will be mutually beneficial for all parties involved. For investors in particular, the immediate financial benefit of many investment opportunities is only the beginning of the overall value present. The transportation sector illustrates this. Many of its investment projects are developing a single set of manufacturing standards that will be used henceforth. The Jeddah and Mecca metro project is an example of where this “common envelope" has been found. These same specifications will be used in all Saudi metro projects moving forward. We are taking this approach for other investment projects where appropriate. The company that decides to invest early on will be the first in line to enjoy a steady stream of business from subsequent projects using the same standards for years to come.

Saudi Arabia has been ranked as the Middle East and Africa region's largest FDI magnet, attracting 75 ventures by the end of 2014. What is SAGIA doing to continue delivering inviting investment?

Much of what we have done in recent years has focused on making sure that companies enjoy a seamless process when investing and operating in environments that are continuously evolving alongside global business standards. From inception to operation, we want to make the investor's life in the Kingdom as easy as possible. It starts with being available to answer any questions that a potential investor might have. We are prepared and excited to speak to anyone that is seriously considering Saudi Arabia as their next investment destination. In addition, we have taken a number of measures to remove barriers and streamline the licensing process. All investors—whether they are a large multinational or an SME—will receive an investment license in five days or less. Recently, we reached a record of taking only one day to make licensing decisions. All applications can now be submitted online, and the number of supporting documents required for each application has been reduced from 12 to three. We are also making it easier for potential investors to get visas to fully explore the Kingdom's investment environment and incentives before establishing an entity in Saudi Arabia. Along with these improvements, we're offering investors competitive property solutions in our economic cities and industrial lands, competitive financing opportunities through equity investment, loan, and grant schemes, and financial assistance for human resource development.

As Governor of SAGIA, what are your expectations and goals for 2016?

This will be a landmark year for Saudi Arabia on several fronts. The launch of the National Transformation Plan will set the Kingdom on a new trajectory toward growth and development. We at SAGIA are excited about what it will offer investors, both in terms of opportunities and ease of doing business in the Kingdom.

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