TRAVEL AND TOURISM: NEW LAWS TO BOOST INVESTMENTS

With the objective of diversifying its economy away from oil, KSA enacted a new law to encourage the growth of its tourism industry, draw more investment, and increase tourist traffic in the Kingdom exponentially. According to a resolution passed by the Council of Ministers, the new tourist law would create a new regulatory environment to “attract tourism innovators and promote ease of doing business” in the kingdom.

The National Tourism Strategy of Saudi Arabia has advanced significantly since the kingdom’s recent release of the Regional Tourism Development Councils Regulation. According to Saudi Arabia’s Minister of Tourism Ahmed Al Khateeb, the new tourism law will “promote business and investment, support innovation, and attract tourists, in accordance with international best practices.”

By providing a one-stop shop for all tourist stakeholders, it will also expedite the licensing processes and procedures and enable “new or experimental tourism enterprises to get special permits” to operate in the nation.

According to a recent assessment by the World Travel and Tourism Council, Saudi Arabia’s travel and tourism industry will expand an average of 11% annually over the next ten years, making it the Middle East’s fastest-growing market. In order to increase the current economic contribution of the tourist industry from 3% of its GDP to 10% by 2030, Saudi Arabia is currently working on a number of tourism projects.

These include Diriyah Gate, a seven-square-kilometer area with the At-Turaif UNESCO World Heritage Site at its centre, and Neom, a $500 billion futuristic city with a natural reserve, coral reefs, and heritage sites on a number of islands in the Red Sea. A mega-tourism project is also being built along the Red Sea coast by the Red Sea Development Company, which is owned by the kingdom’s Public Investment Fund. The first phase will include 16 hotels spread across five islands and two inland locations.

As per the new resolution, the minister of tourism will be empowered to enable expansion in the tourism sector and support businesses by offering tax and custom exemptions and reductions in conjunction with associated governmental organizations. This new framework will not only improve the quality of services in the tourist sector but also promote Saudi Arabia as one of the top five worldwide destinations. Additionally, it will hasten the accomplishment of the objectives outlined in the Kingdom’s National Tourism Strategy and Vision 2030, including 100 million additional visitors, tourism’s 10% GDP contribution, and 1 million additional jobs in the industry.

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