development 20
KAEC covers over 168 million square
Foreign investment
SAGIA, the apex body of Saudi Arabia in charge of inward
metres and is the single largest private
investments, is the prime facilitator of KAEC. In line with SAGIA’s
sector development in the Kingdom
objective of positioning the Kingdom as one of the ten most
competitive economies in the world by 2010, KAEC is focused on
attracting overseas investors through its various components.
“The current investment regulations that are facilitated by SAGIA
enable foreign investors to have up to 100 percent ownership of their
projects. Investors can own the property necessary to carry out
their business activities in addition to owning private residence and
employee accommodation,” explained Linjawy.
“Also, there are no minimum capital requirements for
incorporation of businesses or restrictions on the movement
of capital in and out of the Kingdom. SAGIA is currently setting
up one-stop-shops within KAEC to offer enhanced services for
investors,” he added.
Despite the global economic slowdown, investor interest remains
strong with several companies, including International Pipes &
Electricity Factory (a subsidiary of Ateyyah Group) and Al Zamil
Trade & Transport, announcing combined investments valued at
SR160 million (US$42.7 million) into KAEC’s ‘Industrial Valley’.
In a move illustrative of KAEC’s growing importance as a hub
for industrial innovation and logistics, the investments are made
partnerships highlight the world-class standards that Emaar.E.C to increase the interested company’s access to a greater portion
is bringing into the project. International partners will work to of the 250 million consumers available through KAEC’s strategic
establish schools, malls, the Sea Port and other components of location on the Red Sea.
the project to ensure a fully integrated community.” Hatem Malawi, general manager at International Pipes &
Some of the prominent partnerships of Emaar.E.C include: Electricity Factory and one of the first investors in the industrial
t SR250 million (US$67 million) construction contract with Huta valley, said: “Some of the most significant reasons for us to
to dredge 3.5 kilometres of water canals invest here are the services and facilities born at KAEC. “The
t SR52 million (US$14 million) contract with International Centre Industrial Valley’s proximity to main land, sea, rail, and air routes
for Commerce and Contracting to build residential villas in the from within and outside the Kingdom are cornerstone benefits.”
Resort Zone and a 32-metre high and 150-metre wide main Other incentives for investors include no personal income
entrance for KAEC taxes and only 20 percent corporate tax rate for foreign
t SR494 million (US$132 million) construction contract with companies. Investors can also carry forward their losses on
Saudi Oger to build four residential towers, including 616 balance sheets indefinitely, which effectively relieves businesses
apartments, in the Residential Communities of the tax burden until they become profitable. “KAEC will also
t Signed SR357 million (US$95 million) contract with Binladin have a customs-free district, wherein all imported raw material
Group to construct three residential towers and facilities in the used for manufacturing products that are intended for re-export
Residential Communities will be exempt from import fees,” said Linjawy.
t Contract with Freysinet to construct office buildings and a SAGIA is also assisting with the availability of equity and
building for SAGIA within KAEC debt to co-finance projects through the SAGIA Funds Initiative,
t Construction contract with Alsaad Establishment to build three a forum for equity financing, and Saudi Industrial Development
main entrances to KAEC on the main roads between Jeddah Fund for soft, medium and long-term financing of up to 50
and Madinah percent of the project cost. This landmark development promises
t Contracted Alsaad Establishment to construct the to lead a new era of economic prosperity in Saudi Arabia. The
Administration building of the Industrial Zone, and residential surrounding area will be transformed with a strong infrastructure
area of workers in phase one of the Industrial Zone that covers telecommunications, logistics, and information and
t Signed a MoU with DP World for development and operation of communication technology.
KAEC’s Sea Port “By bringing in a new investor-friendly era to meet the
t Signed a MoU with Global Educational Management Systems objectives of SAGIA, KAEC will serve as a benchmark for future
(GEMS), to establish the first school in KAEC. The 50,000- development plans in the Kingdom. It will create job opportunities
square-metre school will be operational in 2009, and will help for one million people and will be home to over two million. KAEC
drive KAEC’s objective of becoming the regional centre of will boost the Industrial Zone of the Kingdom, thus diversifying
excellence in education the income streams of Saudi Arabia,” Linjawy concluded.
t
PREVIEW Cityscape Saudi Arabia
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