Saudi Arabia has reminded foreign investors of opportunities in the kingdom, including its mineral resources, after the number of foreign investor licences fell by 47 percent in Q2 2020.

In the Summer Investment Highlights report issued by the Ministry of Investment of Saudi Arabia (MISA), analysis of opportunities available to foreign investors in the kingdominclude a special focus on the mining sector and its new mining law, which it said will help unlock an untapped mineral market worth $1.3 trillion.

The mining law was adopted in May 2020 to stimulate transparency and investment in the sector, and includes a raft of measures designed to make the industry accessible, and to regulate it in line with international standards. 

Post-Covid recovery

The number of new international investor licences granted to international companies fell year on year in Q2 of 2020, according to MISA, but showed signs of recovery towards the end of the quarter. 

The primary sources of investment in H1 were the USA, India and the United Kingdom, and MISA said it had issued 506 new licences in total. Nearly half of all licences issued in Q2 were issued in June, which the ministry said was a sign of recovery from the Covid-19-related slowdown.

There was 20 percent year-on-year growth in licences issued in the first quarter of 2020, but a 14 percent fall overall in H1, as the global economy was severely impacted by the pandemic in April and May, MISA said.

Khalid Al Falih, Minister of Investment of Saudi Arabia said:“The opportunity in Saudi Arabia has not changed – this is still a G20 economy that is undergoing a fundamental transformation. 

“Today’s report highlights a number of tangible examples of how the widespread reforms being undertaken as part of Vision 2030 are unlocking significant opportunities. We look forward to welcoming more investors to share these opportunities as the situation normalises.”

The Saudi Arabian Monetary Authority said that point of sale transactions saw a 78.5 percent year-on-year increase in June to a record level of $9.9 billion, following sharp declines in May and April.

Data released by the Ministry of Industry and Minerals Resources showed investments by newly licensed industrial factories amounted to $581 million in June, also following a sharp slowdown in April and May.

Of the 506 licences issued, 54 were for US companies, 47 for UK companies and 49 were awarded to Indian companies. 

Emerging Sectors, which include entrepreneurship, education, financial services, and housing, continued to see the highest number of new foreign investment projects in Q2, followed by the industrial, manufacturing and ICT sectors.

(Reporting Imogen Lillywhite; Editing Mily Chakrabarty)

(imogen.lillywhite@refinitiv.com)

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