(Bloomberg) --

Saudi Arabia plans to create special economic zones offering incentives to invest in sectors including health care, manufacturing and cloud computing.

More details about the zones and the incentives they’ll offer will be announced once they receive final approval later this year or early next, the kingdom’s investment minister, Khalid Al-Falih, said at an event in Riyadh on Monday. Officials are also willing to review taxes and fees and grant limited exemptions to boost the country’s competitiveness, he said.

Investment in the kingdom has been “less than hoped for,” Al-Falih said. “We want to import capital -- and bring back Saudi capital that didn’t find opportunities inside our kingdom.” 

The foreign investors that Saudi officials want to attract are those who will help transfer technology and expertise to Saudis, he added. One focus is health-care, life sciences and biotechnology, with the goal of becoming a global destination for businesses by offering research and development zones and manufacturing hubs, said Sara Althari, an adviser at the ministry.

Saudi Crown Prince Mohammed bin Salman is trying to turn the conservative Islamic kingdom into an investment powerhouse and a global hub for business as part of his Vision 2030 plan to diversify away from oil. On Monday, officials unveiled a plan to boost annual foreign direct investment to 388 billion riyals ($103 billion) by 2030, from $5.5 billion last year, while lifting domestic investment to 1.7 trillion riyals.

The ramped-up targets are increasing competition with neighboring United Arab Emirates, where Dubai -- with a slew of special economic zones -- has long served as a regional center for multinational companies. At the outset Saudi Arabia plans to build four or five zones, al-Falih said. 

Some of the zones will be created by adding new incentives and regulatory frameworks to existing projects, like King Abdullah Financial District in Riyadh, a logistics zone at the Riyadh airport, and King Abdullah Economic City. The last, a Red Sea mega-project launched over a decade ago, was assailed for years as a white elephant and was satirized in a novel-turned-movie starring Tom Hanks, though businesses and residents have gradually moved in.

Each zone “will have its own fiscal, regulatory and labor incentives, designed to fit for the particular needs of that sector,” Al-Falih said. 


©2021 Bloomberg L.P.