Establishing a vibrant and thriving private sector is one of the Kingdom's national priorities, and is the driving force behind the creation of a large corporate investment program. The program, called “Shareek”, is a cooperative government framework led by His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince, Deputy Prime Minister and Chairman of the Council of Economic and Development Affairs, and aims to release up to SR5 trillion of private sector investment by 2030. The program is designed to provide support via various pillars including financial, monetary, operational and regulatory cooperation and asset investment.
"Shareek" Program, which is headquartered in Riyadh under the management of the General Secretariat of the program, aims to enhance the development and resilience of the Saudi economy by increasing the gross domestic product, providing job opportunities and diversifying the economy, in addition to launching private sector as well as the accumulated investments across all economic aspects with a target of SR5 trillion by 2030, and add up to SR2 trillion to the GDP by 2025 and provide hundreds of thousands of new job opportunities. The program will also help, as a strategic enabler, to accelerate investment plans for major companies.
Saudi Arabia’s government will manage "Shareek" under the directives of HRH the Crown Prince, while the large companies investment board will be tasked with overseeing the implementation of the program, which includes in its membership the Ministers of Investment, Tourism, Finance, Communications, Information Technology, Human Resources and Social Development, the Governor of the Public Investment Fund, the Secretary of the Council of Economic and Development Affairs and Deputy Minister of Economy and Planning.
The program’s name embodies the promotion of the spirit of partnership between the public and private sectors, as the philosophy guiding the new program, which was established to achieve enormous benefits for large private companies in the Kingdom.
The program was established to accelerate the growth of business opportunities within the Kingdom and support the achievement of Vision 2030. The program is not a direct response to the negative economic impacts of the COVID-19 pandemic, but rather it achieves a number of goals, most notably to support the sustainable growth of the Kingdom's economy. The launch of the program is another step for the Kingdom paving the way towards a resilient and diversified national economy.
The responsibilities of the "Shareek" Program are in line with the priorities of Vision 2030, as the program is designed to promote the development and diversification of the national economy. The program also seeks to maximize the flexibility of the Kingdom's economy by launching vital projects that contribute to the development of the main economic sectors. The program will also create opportunities for interaction with small and medium enterprises and cumulative impacts on value chains as a whole within a wide range of sectors of the national economy.
The program will become an essential part of the national investment strategy and the broader economic development plan, and it will enhance the Kingdom's reputation as a business-friendly environment that attracts investments seeking remunerative returns, in addition to providing practical and accurate support to accelerate the growth of large companies' projects in the Kingdom, given the framework of the large companies investment board and clear guidelines for large companies that qualify them for support, and enable them to participate in the plan voluntarily which is designed to achieve major benefits for these companies.
Each company will receive special support and benefit from government support that is most closely linked to it, which will accelerate its investment plans and programs. The broad-based support will cover many areas that may include regulatory, financial, operational affairs, asset investment, and cooperation based on the specific needs of each major company with a view to achieving its long-term investment ambitions.
To benefit from the program, large companies must prove their ability to invest a minimum of SR20 billion over the next decade, and the ability to invest SR400 million in each additional project, to possess the necessary qualifications to obtain the program's support.
The Public Investment Fund constitutes a leading party from the newly created General Secretariat to assist in managing the program, and the Fund Governor, Yasser Al-Rumayyan, holds the position of Chairman of the Executive Committee for Large Corporate Investments.
"Shareek" Program is one of the main pillars of the Saudi economic development plans. It measures its performance based on the successful implementation of projects of national importance. It aims to contribute up to SR2 trillion to the Kingdom's GDP growth by 2025 and create hundreds of thousands of jobs over the next five years.
The program is expected to enable large companies to increase their investment targets by more than 50% of their current plans. There are no specific investment targets for the program due to the specific nature and requirements of each large company, however, the program was established to ensure that ambitious investment strategies are leveraged and achieved much faster than before.
With regards to the program’s final budget, and the government agencies involved in providing support, it will depend on the type of incentives required. In principle, the following entities that are likely to participate in providing incentives include the Ministry of Finance, the Ministry of Transport, the Ministry of Energy, the Ministry of Commerce, the Ministry of Human Resources and Social Development, the Saudi Customs, the Saudi Industrial Development Fund, the Local Content and Government Procurement Authority, the Capital Markets Authority, the Saudi Central Bank, the General Authority for Zakat and Tax, the Royal Commission for Jubail and Yanbu, the Ministry of Communications and Information Technology, the Communications and Information Technology Commission, the Ministry of Industry and Mineral Resources, the Ministry of Environment, Water and Agriculture, the Saudi Authority for Industrial Cities and Technology Zones (MODON), the Ministry of Interior, and the Economic Cities and Special Zones Authority.
Any direct financial support will be provided to large companies within the "Shareek" Program as needed, and based on what is negotiated between the concerned parties later, so that both loans and grants are available, but the effect of these incentives is likely to reduce the cost of investment projects depending on the nature of each project.
Regarding support for large companies, it will be studied on a case-by-case basis. A number of factors will be taken into consideration, such as job creation, infrastructure development and the company's investment history. However, large companies must implement plans to invest SR400 million in each project in order to qualify for support.
The program provides support through access to assets, operational, organizational and cooperative support, as these forms are the most important areas of support that enable projects to be launched at an early stage compared to current plans. The program also provides a flexible mechanism that helps accelerate the pace of investment to meet the requirements of large private companies in the Kingdom of the various economic sectors in which they operate.
The program supervisory committee is responsible for providing strategic direction on investment and revision of project proposals and supervise required support and work to ensure that large private companies are able to partner with relevant government and ministerial bodies.
The program is currently open to large private sector companies with projects that will have a significant impact on the national economy by large. Accelerating the pace of important investment projects will have a broad and positive impact on the private sector and will allow companies of various sizes, including small and medium companies, to benefit from the new projects that are being implemented. Currently, the program is open to large Saudi companies only, but the program will help international companies to secure cooperation opportunities with the Saudi private sector and take advantage of new investment opportunities in the future.
The program contributes to doing business by launching mega projects to boost GDP growth and provide advantages for the economy as a whole. It will also, through quick approvals and other incentives, facilitate the investment environment and improve the ease of doing business in the Kingdom.
The program is supervised by a council that includes various stakeholders from the investment sector. There are also plans to communicate with 50 major companies listed on the stock market and private sector companies.
Large companies have generally expressed support for the program. There is consensus among these companies about the feasibility of the proactive government outlook and dynamic efforts, and that such initiatives will contribute to strengthening cooperation between the public and private sectors to increase economic activity and prosperity in the Kingdom.
Regarding the provision of various incentives or options if the large companies are private companies or listed on the stock exchange, the advantages and opportunities available to the large companies depend on the criterion based on the necessity of those companies showing the ability to invest amounts in excess of SR20 billion during the year 2030 and invest SR400 million riyals in every major project to become eligible for the program’s support.
It is worth mentioning that this program is voluntary, but in light of the ability to provide dedicated support to meet the specific investment and project requirements of large companies, the program is confident that it will be proven attractive to both the large companies listed on the stock exchange and the large companies from the private sector. Instead of setting specific goals, the program’s General Secretariat and its members will actively participate in separate meetings with major companies to discuss the available opportunities.