All you need to know about Shareek center’s objectives

Private Sector Partnership Reinforcement Center (formerly, Shareek Program)

Saudi Arabia’s Cabinet approved, on Feb. 28, the transformation of the Shareek program into a center named the Private Sector Partnership Reinforcement Center (Shareek).

It has been structured to enable large companies’ local investment, which benefits the whole economic ecosystem of Saudi Arabia. This includes indirectly benefiting small and medium enterprises (SMEs) and other business operations, through its impact on the overall value chain that results from increasing large companies’ investments.

The responsibilities of Shareek align with the priorities of Vision 2030. The program was designed to promote the development and diversification of the national economy.

The center will create opportunities for interaction with SMEs and cumulative impacts on value chains as a whole within a wide range of sectors of the national economy.

It will become an essential part of the Saudi National Investment Strategy and the broader economic development plan.

Shareek will enhance the Kingdom's reputation as a business-friendly environment that attracts investments seeking remunerative returns.

It will also provide practical and accurate support to accelerate the growth of large companies' projects in the Kingdom, given the framework of their investment boards and clear guidelines for large companies that qualify them for support. This is besides enabling them to voluntarily participate in the plan, designed to achieve major benefits for these businesses.

Each company will receive special support and benefit from government support that is most closely linked to it, which will accelerate its investment plans and programs.

The broad-based support will cover many areas that may include regulatory, financial, operational affairs, asset investment and cooperation. This is based on the specific needs of each large company to realize its long-term investment ambitions.

Direct financial support will be provided for large companies under Shareek, when necessary. Based on negotiations, all loans and grants will be available, but this could reduce the cost of investment projects being implemented by large companies due to the nature of each project.

To benefit from the program, large companies must prove their ability to invest a minimum of SAR 20 billion over the next decade, pump SAR 400 million in each additional project and possess the necessary qualifications to obtain the program's support.

Shareek is expected to enable large companies to raise their investment targets by 50% above the current plans.

Meanwhile, there are no specific investment goals for Shareek due to the different nature and requirements of each company. It was, however, established to ensure benefit from ambitious investment plans and help deliver these plans in a much faster manner.

The final budget of Shareek and the participating government authorities depend on the type of incentives required. Ministries of finance, transport, energy, commerce, human resources and social development, communications and information technology, and industry and mineral resources may help provide incentives, along with Saudi Customs, Saudi Industrial Development Fund (SIDF), the Local Content and Government Procurement Authority (LCGPA), the Capital Market Authority (CMA), Saudi Central Bank (SAMA), the Zakat, Tax and Customs Authority (ZATCA), among others.

Shareek is overseen by a board that comprises several stakeholders. Plans are developed for liaison with 50 major companies listed on the Saudi stock market, amongst other private firms.