Saudi Arabia urged to revise laws further to achieve Vision 2030
Achieving Saudi Arabia’s ambitious Vision 2030 requires consolidation of regulations to attract foreign investment, create new jobs and transfer private sector skills to the public sector, senior executives have said.
This was the consensus during accountancy and finance body ICAEW’s Corporate Finance Faculty roundtable held in Riyadh.
Panellists included Ahmar Azam, chief operating officer of Leejam, Anand Rohatgi, chief operating officer of Synergy Consulting, Daniel Royle, corporate partner at Abuhimed Alsheikh Alhagbani Law Firm and Imad Matar, ME deals partner at PwC.
Speakers agreed that the regulatory laws used in the kingdom are currently below international standard, especially when compared to more developed markets.
They emphasised the importance of revised laws and the adoption of International Financial Reporting Standards (IFRS) to attain a thriving economy.
Under its Vision 2030, the kingdom is looking to attract foreign investors who could share their expertise in developing and growing local companies.
But panellist said that in order to achieve this, Saudi businesses must make themselves more marketable by showing an equal level of competency, transparency and disclosure. They must have the right team and structure in place, and they should strive to not only compete locally but also globally.
Speakers advised that the Saudi Companies’ Law should be amended to allow a higher ownership percentage for foreign investors, especially in the priority sectors such as the healthcare.
Panellists also agreed that cost-cutting is essential to improve the overall performance of Saudi businesses. A major strategy to achieve this is by providing economies of scale which can be achieved in the short term through mergers and acquisitions.
Michael Armstrong, ICAEW regional director for the Middle East, Africa and South Asia (MEASA), said: “Vision 2030 sets out a blueprint for the future of Saudi Arabia.
Pleasing progress has already been made as a result of sweeping social and economic reforms in the kingdom.
“However, there is always room for improvement. By amending laws supporting private companies, we will see an increase in foreign direct investment which will lead to greater economic sustainability and long-term benefits for the economy.”