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The recent fall in oil prices means that the energy sector’s contribution to Saudi Arabia’s economic growth will be limited in 2015, with expansion to be driven more by the non-oil sector, which is forecast to increase by about 5% in 2015. Saudi Arabia’s crude oil production averaged 9.71m bpd in 2014, compared to 9.63m in 2013 and 9.76m in 2012. However, despite lower oil prices, the Kingdom has increased production in 2015, with its output climbing above 10m bpd to reach 10.3m in March. The country had proven oil reserves of 269.5bn barrels, or 15.8% of the world total, at the end of 2013, and natural gas reserves totalling 290.8trn cu feet, or 4.4% of the global total. In the face depressed prices, and in a bid to expand and diversify its offering, the sector is continuing to invest in new downstream technology, feeding state-owned Saudi Aramco’s transformation from an oil and gas producer into an integrated energy company, with a growing emphasis on oil refining and petrochemicals.

This chapter contains an overview of the legal framework in which local and foreign investors operate in Saudi Arabia. It includes a run-down of dispute resolution and bankruptcy rules, an outline of the regulations affecting foreign investors in Saudi Arabia, and an examination of the evolving regulatory framework in place across the Kingdom.

This chapter contains an overview of the tax framework in which local and foreign investors operate in Saudi Arabia, including an outline of the various tax systems in place for different ownership structures and a look at the June 2014 updates to the regulations for zakat, a religious tax based on sharia. This chapter contains a viewpoint from Jacques Fakhoury, KSA Country Leader, PwC

Tourism is estimated to have directly contributed $12.7bn to the Saudi economy in 2013, equivalent to 1.7% of GDP, and this was forecast to rise by 5.2% to $13.3bn in 2014. Although religious tourism still dominates the industry, government efforts are under way to expand the sector’s offering, with opportunities available in various segments, including heritage and business tourism. Domestic tourism has surged in recent years with spending seeing a compound annual growth rate of 15% between 2010 and 2014. Indeed, current ambitions for non-religious tourism are directed towards serving the domestic market – both Saudi and expatriate – for whom spending almost doubled between 2010 and 2014, from $15.7bn to $27.4bn.

The government represents the biggest provider of health care services in Saudi Arabia, accounting for about 75% of the country’s health spending. In 2015 the government increased its budget for health and social affairs by 48% to $42.64bn. Indeed the Kingdom’s health sector has witnessed rapid growth in recent times as the government looks to meet its 2020 targets of 264 hospitals, 70,694 beds, 2750 primary health care centres and 27 specialist medical centres. Central to realising these ambitions are five new medical cities that are set to spring up across the country. The e-health programme is also gaining traction and now includes more than 70 projects ranging from quick wins to major multi-year endeavours, such as the roll-out of automated systems at primary care centres. This chapter contains an interview with Saleh Al Tamimi, CEO, King Saud Medical City.

Education continues to be a major focus for Saudi Arabia, with an estimated $399.75bn spent on education between 2005 and 2015. This trend is set to continue, as the creation of a knowledge economy forms the third objective of the Kingdom’s 10th Development Plan. Private instruction continues to gain in popularity – the number of pupils at private schools grew by about 9% a year between 2008 and 2011 and currently makes up around 14% of the K-12 sector. Under the Kingdom’s Colleges of Excellence programme, meanwhile, international training providers run a range of vocational courses and build their own curricula to be taught at purpose-built facilities supplied free of charge by the Saudi government. Regionally, the e-learning market in the broader Middle East is set to expand by 8.2% annually as governments invest to support the segment. This chapter contains interviews with Azzam Al Dakhil, Minister of Education; Ali Al Ghafis, Governor, Technical and Vocational Training Corporation (TVTC); Abdullah Al Mosa, CEO, Saudi Electronic University (SEU); and Badran Al Omar, Rector, King Saud University.