Bracewell’s Ibrahim Siddiki spoke with Arabian Business on the emergence in the GCC of special economic zones, or economic free zones, as a way to attract foreign direct investment.
“The advantage would be Saudi is a bigger market, even if you’re just servicing the domestic market,” said Siddiki.
Saudi Arabia’s population of nearly 35 million dwarfs the other GCC states, where the United Arab Emirates is the second largest with nearly 10 million inhabitants.
Similar to the UAE, Saudi Arabia has also offered up a 50-year tax exemption for companies registered in the special economic zone.
“You’re getting exemptions from a lot of these costs … whether they’re direct or indirect taxes, like the customs [fees] or the VAT (value-added tax), and you’re going to benefit from that for 50 years,” Siddiki said.