With its Vision 2030 plan, Saudi Arabia is inviting domestic and foreign investors to invest in its economy as it tries to diversify and wean itself away from an oil-based economy.
As per a presentation made by senior officials at the Capital Market Authority (CMA), Saudi Arabia’s markets regulator have loosened licensing rules for asset management and other investment firms.
The revisions reduce the requirements for obtaining a “management activity” license in the kingdom, and are aimed at boosting the number of asset managers as well as increasing venture capital investment and private equity in the country, said the officials.
As per the revised rules, in order for a firm to be considered an “investment company” its net assets requirements have been reduced to $3 million (10 million riyals) from the earlier $13 million (50 million riyals), as per a statement made during the presentation.
The revisions have also permitted two new types of activities: managing non-real estate investment funds and managing the portfolios of small but experienced investors.
The work experience and certification requirements to be considered a “specialized investor” who are approved to invest in private equity funds and private placements have also been broadened.
All of these plans by the CMA are aimed at opening up its markets to domestic and foreign institutional investors as part of the Kingdom’s Vision 2030 plan which is aimed at diversifying the Saudi economy beyond that of an oil economy.
The CMA is also planning new listing rules, to be made public this fall, with emphasis on lowering debt levels.
($1 = 3.7501 riyals)