LONDON (Reuters) - A requirement for foreign firms to have a regional HQ in Saudi Arabia to qualify for state contracts from 2024 is the latest in a series social and economic reforms intended to modernise the conservative kingdom and diversify its oil-dependent economy.
Here are some of the main reforms implemented by Crown Prince Mohammed bin Salman, as well as some leading investor concerns and reforms yet to be implemented.
Saudi Arabia curbs the powers of the religious police who once patrolled public spaces, neutering their ability to impose strict rules on women’s dress or enforce bans on alcohol, music, prayer-time closures and the mixing of men and women.
The government ends a 35-year prohibition on cinemas, plans to open more than 300 movie theatres by 2030.
Saudi Arabia lifts a decades-old ban on women driving cars. However, authorities arrested several women’s rights activists before and after the move amid a broader crackdown in which scores of critics have been arrested.
A royal decree allows music to be played in restaurants as public entertainment flourishes around the kingdom and the ban on gender-mixing eases.
A new tourist visa regime seeks to attract holidaymakers. A modest dress code is set for visitors, ending the requirement that women wear all-covering robes. Foreign men and women are permitted to rent hotel rooms together without proving they are related. Alcohol remains banned.
Stock market reforms double ownership limits to 10% for foreign institutional investors.
New labour regulations restrict certain jobs to citizens and raises quotas for companies to hire Saudis.
Power and water subsidies are cut under fiscal reforms.
The National Project Management Organization is set up to reduce costs on state infrastructure projects.
Saudi Arabia detains scores of senior princes, ministers and top businessmen at Riyadh’s Ritz-Carlton hotel in an anti-corruption campaign seen by critics as a power play and shakedown of the crown prince’s rivals. Authorities say they seized more than $100 billion through financial settlements.
A 5% value-added tax (VAT) is imposed to improve non-oil revenue generation.
Foreign investors are granted full access to NOMU, a parallel market for small- and medium-sized enterprises.
New bankruptcy law regulates procedures such as settlements and liquidation.
The Capital Market Authority and Debt Management Office reduce fees and commissions to encourage secondary market debt trading.
Sin tax on electronic cigarettes and sugary drinks imposed in bid to diversify revenue streams.
Saudi Arabia relaxes a 49% limit for foreign strategic investors in companies listed on the main Tadawul stock market.
The capital market law is amended to allow the establishment of other exchanges alongside Tadawul.
Saudi Arabia begins accepting licence applications in the military industrial sector, a major target for diversifying the economy away from oil.
Saudi Arabia sells shares in state oil giant Aramco in the world’s biggest initial public offering (IPO), raising a record $29.4 billion.
Saudi government triples VAT rate to 15% in austerity push to counter oil slump, COVID-19
Kingdom eases ease foreign workers’ contractual restrictions, abolishing a controversial seven-decade-old sponsorship system known as kafala.
Saudi Arabia launches a new law that widens the scope of the central bank (SAMA) to include economic growth support in addition to maintaining monetary and financial stability.
Crown prince reveals plans to approve a set of new draft laws designed to improve the efficiency and integrity of the kingdom’s judicial system in a step that would eventually lead to an entirely codified law.
*INVESTOR CONCERNS AND AWAITED REFORMS
The Iran-aligned Houthi movement, which has been battling a Saudi-led military coalition that intervened in Yemen in 2015, has repeatedly launched missile and drone attacks towards Saudi Arabia, mostly the kingdom’s southern region but also Riyadh.
In 2019 an unprecedented missile and drone attack hit the energy infrastructure of oil giant Saudi Aramco. Riyadh blamed Iran, a charge Tehran denied.
Bureaucracy and ease of doing business:
Some investors told Reuters that even with the support of the government it took them 9 months to open a bank account.
Closure of shops and entertainment venues during prayer times.
Allowing access to alcohol for foreigners. Alcohol of any kind is banned in Saudi Arabia. Those who break the law are subject to hundreds of lashes, deportation, fines, or imprisonment.
Lack of availability of foreign housing compounds at relatively fair prices, where expats have access to pools and sports facilities.
Education and work:
There are fewer than a handful of international schools that offer an international curriculum separate from that of the government and their fees tend to be much higher than government and private schools, and are also slightly higher than schools elsewhere in the region.
Dependents of foreign expats are generally not allowed to work and there are generally fewer work opportunities for spouses under the Saudisation drive.
Reporting by Marwa Rashad; Editing by William Maclean
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