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Makkah and Medina are situated in western Saudi Arabia, near the coast of the Red Sea and roughly 350 km apart. The cities are home to Islam’s holiest sites, and are thus important to the religious lives of many of the world’s 1.2bn Muslims. Makkah is the birthplace of the Prophet Muhammad and the location of the Masjid Al Haram, also known as the Grand Mosque, which houses the Kaaba, a shrine that Muslims consider the most sacred spot in the world. Medina, meanwhile, became the destination of the Prophet Muhammad’s flight from Makkah, and it was in this new city that he helped to build the Mosque of Quba – the first in Islamic history – and was later buried.

Corporate income tax rules are governed by the Income Tax Law, which came into force in 2004. The Ministry of Finance issues ministerial resolutions concerning aspects of tax and zakat, a payment under Islamic law that is used for charitable or religious purposes. The General Authority of Zakat and Tax (GAZT) regularly issues circulars and responses to frequently asked questions containing its interpretation or position on regulations. The GAZT generally prefers to take a substance-over-form approach in dealing with tax matters. The GAZT often scrutinises transactions and challenges taxpayers if they view transactions as being motivated by non-commercial tax reasons. This chapter contains a viewpoint from Wadih AbouNasr, Head of Tax, KPMG KSA Levant Cluster.

As a result of recent drops in oil prices, Saudi Arabia’s insurers have been operating in a challenging environment. The sector has faced stability issues over the last decade, and smaller players in the market are under increased scrutiny. For the better capitalised insurers, however, the market is a young and increasingly promising one. Insurance penetration in the Kingdom remains low, at approximately 1.7% of GDP according to Fitch credit ratings agency, and business is concentrated in the compulsory segments of motor and health cover. In some areas there have been encouraging signs of growth: data from the Kingdom’s central bank shows that insurance penetration expanded at a compounded annual growth rate of 12% between 2014 and 2019. This chapter contains an interview with Abdulaziz Al Boug, CEO, Tawuniya.

Nestled between two seas and two continents, Saudi Arabia stretches over 2.1m sq km, an area as large as Western Europe. Its diverse landscapes offer a wide variety of scenery, while its rich history, culture and significance to Islam attract visitors from around the globe, making it one of the most-visited countries in the world. However, the tourism and entertainment sector in Saudi Arabia is on the cusp of a major change. Under the umbrella of the Vision 2030 programme, the government has set out ambitious tourism development initiatives, as well as ushering in a series of multi-billion-dollar investment projects to build new resorts, hotels and cultural attractions. This chapter contains an interview with Amr Banaja, CEO, General Entertainment Authority.

Alternative asset activity in Saudi Arabia is taking place across an increasingly diverse range of investment instruments. The Kingdom is a regional leader in mutual fund activity, with the deepest and most varied investment pool in the GCC. The size of the Kingdom’s fund market means that its key participants are some of the largest and most influential in the wider MENA financial sector. Meanwhile, in the venture capital arena, the domination of state-funded programmes is giving way to private capital, which has until now been largely focused on private equity opportunities. While 2018 was a quiet year for deal-making across the region, the government’s bold programme of economic reform is expected to generate new opportunities over the short to medium term.

Saudi Arabia’s health sector is currently facing a combination of demand-led growth and major structural change as the government seeks to privatise hospitals and other medical service providers. The interplay of these two forces is likely to have an influence on the sector in the coming years. Since 2016 two primary strategy documents have been guiding health care policies: the National Transformation Programme, which runs until 2020, and the Vision 2030 development blueprint. The former calls for increased private sector participation in the health sector, while the latter is an overall strategic plan for the country that highlights the need to modernise and diversify the economy. This chapter contains an interview with Hisham bin Saad Aljadhey, CEO, Saudi Food and Drug Authority.