U.S. giant Dow Chemical has said it is the first company to get a license under new Saudi rules allowing for 100 percent foreign ownership in the trade sector. The kingdom's powerful Deputy Crown Prince Mohammed bin Salman, who is on a visit to the U.S., presented the license to Dow Chairman Andrew Liveris in Washington, the company said in a statement published Thursday. Prince Mohammed is the driving force behind Vision 2030, an economic diversification plan that he released in April.
It aims to wean Saudi Arabia off its dependency on oil revenues, which remain its biggest source despite falling global prices that have decreased by nearly half since 2014. Vision 2030 and the National Transformation Program has set targets for implementing the plan, aiming to boost non-oil revenues and employ more Saudis. In line with the vision, ministers on Monday approved rules for foreign companies to invest in the wholesale and retail trade sector with 100 percent ownership, up from 75 percent.
Dow said the trading license furthers its ability to deliver products in the areas of sustainable development, energy efficiency, oil and gas, alternative energy and water. After Prince Mohammed met with Treasury Secretary Jack Lew and other top U.S. economic policymakers on Wednesday, the White House "underscored the United States' desire to be a key partner in helping Saudi Arabia implement its ambitious economic reform program." Dow calls itself Saudi Arabia's largest foreign investor. Its stakes include Sadara Chemical Co., a joint venture with Saudi oil giant Aramco.
Commerce and Investment Minister Majed al-Qasabi, who accompanied Prince Mohammed on his trip to the U.S., said on Tuesday that the new ownership rules "take us a step further" towards the vision's goal to make Saudi Arabia an investment powerhouse. Investors will now have the flexibility to structure their company optimally to benefit from the Saudi market, the Saudi Arabian General Investment Authority said. "They may seek 100 percent ownership or operate through a joint venture," it said.