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choice for investors in saudi arabia








Investment as a process is the key to the creation of Saudi Arabia as an economic power. Since the middle of the 1970s, when the kingdom decided growing income using oil to industrialize by investing in processing plants that used the country's hydrocarbon resources, this policy decision requires at least a decade of large investment plants and the necessary infrastructure to build. To build a downstream processing industry is capital intensive. However, the decision perfectly match the kingdom's economic and demographic profile in the sense that enormous oil reserves in relation to the potential income they generate a small population. The government sees the logic in adding value oil exports by processing them in the country - especially through the use of natural gas reserves and gas-to late 1980s burned. Some Saudi planners had industrialization as a good opportunity for the participation of both foreign and local
companies the Kingdom's level of economic activity expand, encourage.Joint ventures with foreign companies became common and mutually beneficial. A big bonus for the Saudi economy was the transfer of technology that came with the investment. As one local commentator put it recently, Saudi Arabia's industrial revolution in a box and follow the instructions in English.The Kingdom has used his wealth to capitalize on the growth of the available skills and technology to promote their own skills and knowledge base for future generation. Thirty or so years later, the Kingdom is still an attractive investment destination. The landscape of the narrow but lucrative confines of the petrochemical industry in a highly developed market expanded with a variety of areas that a long-term potential. Perhaps the days of the "quick buck" return on investment has passed, but medium and long-term investment in the social and industrial projects is very much alive. Tal Nazer, the chief executive of BUPA Arabia.The first business between BUPA and the Nazer Group in 1997 began. This is a post-oil tree company that specializes in catering to the health and care needs for the rapidly changing demographics and social infrastructure in the Kingdom. "We are one of the few companies that have international shareholders and one of the oldest companies in the insurance industry in Saudi Arabia," said Nazer, indicating that the company has a long way from the traditional partnership of 70 and 80. As a result of the increase in population, changing age profile and rising expectations of the increasingly affluent population, the company addresses various aspects of the healthcare industry. For BUPA hospitals, insurance, health care homes and dialogue is the core of the business, while BUPA Arabia, the safety of health as its main focus, an area that reflects the change in social issues and infrastructure as a result of a petrochemical fired social development in the Kingdom. Nazer's advice to an incoming investor was "specialize and do good." Investment in new business requires capital and compliance with existing local regulations. In 1997, for BUPA Middle East was relatively easy because there was little if any specific security. But in 2003, insurance laws and regulations took effect. This, said Nazer, means that existing shareholders and the company has to make adjustments to comply. They have a minimum capital of SR100 million, a requirement for a public listed company and a capital input to the solvency of the Saudi Arabia Monetary Authority (SAMA). Meet the requirements, the paperwork completed and one of the most successful IPOs in the Kingdom - nine times more than registered - BUPA Arabia in 2008 formed the launch. Nazer reflect the changes brought about by the formation of the current company. "We have benefited from the local experience and international expertise," he said. "We went through the process to any insurance company to continue, capital, management, business plan and due diligence for example, but it's OK," he said. "The regulations are of a high standard and the reason is that the government wants an insurance industry of a high standard similar to the banking industry to build," he added. Nazer said that, as with any single company to invest in any country, local know-how was important, or using a local partner or a good quality local people to guide the investor through the challenges. Changes in the local legal service can produce many positive results. The Saudi government makes health insurance compulsory for expatriates. "It increases the release of 1 to 7 million customers," he said. He noted that it led to a domino effect on the Saudi market, producing customers the benefits of health insurance have seen. The Saudi population is predominantly young with 80 per cent under 39 years old and 60% under 21, according to generally accepted figures.This, the age and medical inflation "will be an important factor in the insurance to be. The compulsory medical insurance for expatriates and Saudis working in private sector health care more accessible to people. These factors, said Nazer, had combined to put pressure on the existing hospital, medical inflation that resulted. His concern is the world-class service and a growing need for hospital facilities to cope with future demand be shown. He will facilitate foreign investors and to encourage them to look to invest in the provision of physical infrastructure such as hospitals, to deal with current and future demand. The need for local knowledge, but obtained and transparency, but the complexity of the regulations was confirmed in the experience of Bariq Mining Ltd, the first private company granted exploration rights to the minerals in the Kingdom. Graham Pratt, Bariq's general manager, said that the application and registration process, although a bit slow and the enormous, was just laid out and transparent. In the kingdom for five years, since the implementation of the new national mining code, and originally founded as an exploration company by the Ministry of oil and mineral resources, hold various mineral tenements (licenses) and license to amining copper mine south of Madinah. Saudi Arabia is massively rich in minerals. The Arabian shield which comprises the western half of the country hardly rich, but initial findings indicate the "Gold Rush" potential, not only in gold. Moreover, it is the intention of the Saudi government mining declared as the "third pillar of the economy after oil and petrochemicals to reach and there is a positive investment climate for mining in other countries in the Kingdom's corporate world. Pratt mining potential in the Kingdom is described as "large" and a real opportunity for local and international investments. Ma'aden bauxite and phosphate in the northeastern part of the country were identified, but the Arabian shield, although they are well studied, hardly touched. The Saudi authorities are actively encouraging the opening of the doors to investors 100% ownership of licenses and a generous attitude towards the repatriation of profits. "Within 12 months we have buyers of our flagship mine production," says Pratt. "We will be the first privately owned production company for the buyer or indeed the base metal or gold producer in Saudi Arabia, like all metals previously by the state mining company (Ma'aden)." An outside investor seeking themselves to independently establish Bariq have no experience of the processes of registration in the Kingdom work. Urban business stories of the problems law and government procedures, but Pratt remember that he was pleasantly surprised with the various regulatory authorities. The process of the initial approach to the granting of licenses, said Pratt, a time consuming thing in any country. "Mining is a long term investment, and we have to think strategically Every country has its own regulations and it is a time consuming affair. It is perhaps a little more than a few other places bureaucratic and automation and digitization in some areas will benefit, but for us as a mining company, five years is indeed a typical and reasonable, "he said. The process of registering a business, but considerably more than in other parts of the world where in many places in an hour can be done. "You can reduce homework and get hold of a good local accountant and lawyers," said Pratt noted. Potential investors are often advised that the only way to send things in the Kingdom's strong personal relationships developed in the choice of partners and managing the necessary formalities.Pratt said the process was not as well defined as, but by makinggood relationships, he found that a commitment is a good understanding of mining and its potential. "And it's always nice to the man you are dealing with on a personal basis as well as official should know." In a response to a similar investigation, AXA Cooperative Insurance Company proposed that an investor spends time making sure that any prospective partner value to bring to a relationship, not only in monetary terms, but in experience and active support of the operation. The most important thing for Pratt was that there was a clear structure and process. "In our experience, the process is as transparent as clear and as good as anywhere in the world and by far the best in the MENA region," he added. This is perhaps another example of the decline of the "quick buck" investment and the emergence of the long term, a controlled and measured positive development is the beginning of the Kingdom's investment scene characterize. The legal system of Saudi Arabia, Shariah, is sometimes considered a source of concern in the West and among large investors. In Bariq experience, although all the operations are Shariah compliance, there is no distinction in practice no. "Within the framework within which we work, you are not aware of any legal system working the framework is there, the rules are there - the end of the story," says Pratt."Certainly the Shariah principles of equality and fairness in the game, but in the final analysis, it has no effect on our operations." Long-term capital investment needs, especially in high-risk mining industry.Traditionally, an investment in the Kingdom by individuals who choose not to long-term projects are implemented to apply. Mining is by nature a long-term investment and no guarantee of the main returns.Pratt estimated that 90 percent of exploration and mine development projects do not yield eight percent will survive and a varying degree of profit and perhaps two percent to return to a windfall back. "I feel that the local investor looking for more security in the use of its capital," he said. Speaking from the perspective of the mining industry, Pratt felt that a large inward investor challenges in hiring labor would encounter. While the general tradesmen and administrators were available, there was, he thought, a lack of high level technically competent people available. "It is understandable, as mining is still a young industry, but other drivers to talk, I think it is applicable to other industries as is," he said. While there is a step in the Kingdom of industrial technical skills, notable examples are the general organization for technical education and vocational training (GOTEVOT) development program and the work done by Jeddah Technical College and the Saudi-Japanese Higher Institute among others, the output is not sufficient. In-house training and on-the-job training that many companies are provided as a burden and many industrial interests, would be a ready supply of well trained local people are welcome with a high-level skills that integrate well with the needs of the industry. Therefore skilled labor in the country be brought. The process and the issuing of visas for labor, even skilled labor is not available locally, is thought to Pratt, a major challenge for any business setting up business in the Kingdom. "A review and relief in the restrictions on visa issuance and eligibility rules will be most welcome," he said. "I want an education system which is part of the local labor with the skills to welcome the incoming industries to produce." If it can be to come, then the kingdom will be able to create an industrial base and national labor force that would be in a position to add value to the Kingdom's core products and the need for the job for future generations to build to create. It looks like the great feeling to have finished aluminum products using cheap energy for a sample to perform, rather than the export of raw bauxite or batons. The issue of availability of specialist staff and a visa will apply to the AXA Cooperative Insurance Company. In a written reply said that the two things the company with a theoretical "magic wand will change," said an easing of the visa restrictions currently recruiting quality expatriate staff limited to the Kingdom and an improvement in theprocess of granting of the business and visit visas specified in the kingdom. Established in the Kingdom in 1972, the company early last year, a 100 percent Saudi company. Their focus has always been commercial insurance, both on a direct basis and also through intermediaries. In recent years, the development of a compulsory medical insurance is an important factor, and look forward, say they will be more attention given to personal lines can be. An incentive to the insurance industry with the government to move for all insurance companies as a whole Saudi companies and the imposition of compulsory medical insurance and a car registration. During his time working here, AXA has noted an increasing awareness and responsibility to hire and the development of Saudi citizens in the workplace, now a regulatory requirement for insurance companies SAMA. With training and support, the company said its Saudi staff is as good as any other nationality. Currently, 39 percent of the staff is a Saudi and that figure is growing at an annualized basis, as the company says it is committed to developing an effective Saudi staff capable of managing the company in the coming years. However, a big hurdle AXA an international company and business communications worldwide in the face. A major challenge for personal progress in an international company is able to effectively speak and write in English, it says. Again, people power in the Kingdom are available and are fully able to acquire necessary skills to contribute to an incoming investor.But in many cases the skill set that one would expect of a broad-based Education system is not available. As with BUPA, the quality of service at the center of AXA's business. However, the company said that Saudi Arabia remains a market where the quality of product and service is often seen as secondary prize. That said, a security policy perspective, Saudi Arabia is still a developing market. "But as the economic driver of the region, the KSA market has a great potential," said a spokesman for AXA. "There are about 30 insurance companies in KSA, a figure well over and no doubt some of these companies as a result of poor performances include or merge with others in the coming years." The investment environment in the Kingdom's health, development and profitability of the business be.Drafting in the experience of several companies, including our contributors, a long and complicated process, but one that is structured and transparent. There remains a challenge, not least the non-availability of trained personnel in the occupational or professional skills and field, especially in the case of companies outside the Kingdom as a matter of course in English literacy. Saudi Arabia has a stable government, with enormous resources and a healthy credit rating and cash flow, it has a well developed regulatory structure that looks transparent time-consuming, by working. But as the economic powerhouse of the region, the Kingdom remains and will surely be the investment destination of choice, especially with a more sophisticated and growing population and an almost untapped reserve of mineral resources that can be used in the long term as supporting as its oil reserves.
                                                                                                 

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