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Tax-free advantages add to international appeal

Article - July 21, 2016

Funds hold outstanding opportunities for international investors, according to Damman’s corporate finance solutions provider BMK


The six economic cities currently under construction and the opening up of the Saudi Stock Exchange (Tawadul) in June to foreign investors bear testament to the kingdom’s push for greater diversification and international participation in its economy.

“There is depth now offered in the Saudi Arabian stock market that you do not see elsewhere across the Middle East, and you can see more funds coming,” says Mohammed Ahmed Rashed Al Dossary, Chairman of Bait Al Mal Al Khaleeji (BMK).

“They are investing in different sectors like heavy industry, chemicals, real estate development, and agriculture. Every day we see new funds coming to the market. This is the only country in the Middle East where you see business families that have been in the market for 50, 60 or 70 years.”

The government is making it easier than ever for foreigners to invest. Mr. Al Dossary advises that funds are an especially advantageous method for international investors to be a part of the largest free economy market in the Middle East. “A good thing about Saudi Arabia is that most foreigners do not pay any tax if they go through funds. This really is an outstanding opportunity,” he explains.

Rising incomes and a rapidly expanding youthful population are driving expansion in the country’s built environment in particular, with increasing demand for real estate and infrastructure.

There has been relatively little research into the real estate market of Eastern Province itself. But a report released in November 2014 by JLL, the world’s leading real estate investment and advisory firm, states, “There is a significant shortage of high quality residential accommodation in the Eastern Seaboard at present, particularly expatriate compounds. Strong demand is creating opportunities for the development of both additional expatriate compounds and further labour and staff accommodation,”  

BMK’s Real Estate Investment Funds Dept. targets the exceptional opportunities for maximum returns in this burgeoning sector as part of the company’s comprehensive asset and portfolio management services it provides investors. “We have never lost in real estate,” the chairman comments.

The Dammam-based financial institution also offers a raft of premium corporate finance, custodial and advisory services. “International firms are now looking at Saudi as the future,” Mr. Al Dossary adds. “As a company, as a group, we develop opportunities in France, Morocco, the Far East, etc., but we have never found anything like Saudi Arabia in terms of rates of return.”