The Saudi government’s determination to diversify its economy away from oil, coupled with its need for economic reform due to its young and rapidly growing population, bode well for Singapore companies who are willing to take a plunge there, said Mr Feroz Siddiqui, Centre Director for IE Singapore’s Riyadh Overseas Centre.

However, he warned that the Kingdom, where religious customs and the Arab culture collide to create a unique business environment, is a very unique market, and only those who can patiently traverse the market will be able to succeed there.

Speaking at the IE Partnership Day, Mr Siddiqui said that Saudi Arabia has changed over the years and it is now one of the easiest places to conduct business in the Middle East. The World Bank’s “Doing Business 2009” report ranked the Gulf nation as the 16th easiest place to do business in the world, up from 24th in the 2008.

This puts Saudi Arabia ahead of neighbours Bahrain (18th), Qatar (37th) and Kuwait (52th). In addition, the report also ranked the Kingdom 28th for ease of starting a business, up from 38th in 2008, and 24th in terms of investors’ protection, a significant jump from 49th a year earlier.

Furthermore, the upcoming Double Tax Agreement (DTA) with Saudi Arabia and the GCC-Singapore Free Trade Agreement (GSFTA), coupled with a strong legal framework, make it an even more attractive destination for Singapore companies.

With a booming young population, low private home ownership rate and a shrinking household size, providing affordable housing for its citizens remains one of the key priorities of the Saudi government.

Mr Nordin Yatim, Centre Director for IE Singapore’s Jeddah Overseas Centre, said that Saudi Arabia suffers from a huge shortage of housing and it needs at least one million new homes in the next few years to address this need.

He said that only 50 per cent of the national target of 200,000 units of housing per year from 2004-2009 was completed, leading to Jeddah facing the problem of growing slums.

To address this issue, the Saudi government is introducing new laws and a regulatory framework to ensure viable growth of the Kingdom’s real estate sector. It is aiming to attract $120 billion worth of investment in the sector over the next five years.

Singapore, which is known as a showcase for good urban solutions, is definitely in a good position to capitalise on this growing need.

Singapore already enjoys positive mindshare in Saudi Arabia and there exist enormous opportunities for local companies that are able to provide urban solutions in building design and construction; urban planning and consultancy; development and management of townships; and waste management and water treatment.

To make Saudi Arabia more attractive to foreign investors, the Saudi Arabia General Investment Authority (SAGIA), which facilitate foreign investment, also provide tax reliefs of up to 20 per cent for non-GCC companies.