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Saudi Arabia: Business environment at a glance

September 27, 2006
Saudi Arabia: Business environment at a glance. Check it out:
(EIU Viewswire Via Thomson Dialog NewsEdge) COUNTRY VIEW

FROM THE ECONOMIST INTELLIGENCE UNIT

Policy towards private enterprise and competition

2006-07: Although legislative changes will be few, extensive investment requirements should see a rise in the role of the private sector.

2008-10: The private sector plays a greater role in telecommunications, transport, non-oil mining, education, health, utilities and infrastructure.

Policy towards foreign investment

2006-07: Following accession to the World Trade Organisation (WTO), new laws and initiatives on competition, capital markets, corporate taxation, insurance and foreign ownership of banks begin to create a more level playing field.

2008-10: Further labour law legislation and WTO membership enhance flexibility and transparency for foreign investors.

Foreign trade and exchange controls

2006-07: WTO accession and free-trade talks between the Gulf Co-operation Council and the EU, India and China begin to lock in lower tariffs. No exchange controls. Strong commitment to full convertibility.

2008-10: Increased import flows as large capital projects get under way.

Taxes

2006-07: Foreign companies corporate income tax subject to 20% ceiling, but tax in the oil and gas sector remains higher.

2008-10: Efforts to improve tax collection. Possible broadening of tax regime.

Financing

2006-07: The capital markets law gives a tentative start to the development of a capital market, with an increasing number of initial public offerings and gradually improving transparency, confidence and investor protection.

2008-10: Greater use of the stockmarket by companies and the development of a corporate bond market. Foreign banks begin to operate more widely.

The labour market

2006-07: Strong emphasis on Saudiisation of the workforce and greater focus on ensuring Saudis are adequately trained.

2008-10: An additional labour law, which promotes greater mobility between jobs and more transparency in contracts, starts to ease labour market distortions. Government steps up actions to deter recruitment of foreign workers.

Infrastructure

2006-07: Uneven advances towards meeting expansion needs in power, water, housing, transport, roads and railways.

2008-10: Regulatory advances in utilities and infrastructure encourage private investment to help plug the financing gap.

Copyright 2006 Economist Intelligence Unit


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