In a move to support investment and economic activity, the General Investment Authority has adopted the National Classification of Economic Activities for investment licenses, Ibrahim bin Saleh Al-Suwail, Deputy Governor of the General Investment Authority for Investor Services and Consulting, confirmed that the adoption of the classification comes in implementation of the royal decree mandating its adoption as the official and unified classification of economic activities in the Kingdom.
A Comprehensive Framework for Economic Activities
The General Investment Authority has adopted and completed the implementation of the classification for investment licenses ahead of the target date of January 1, 2018.
Al-Suwail stated that the classification aims to provide a comprehensive and consistent framework for economic activities based on the sector in which investment is sought, thereby contributing to the improvement of the investment environment and the accuracy of statistical and economic data, noting that the classification includes sections, groups, branches, and categories of economic activities designed to standardize the economic activities of investment entities across relevant government agencies, and it will take effect across all relevant agencies starting in 2018.
The Deputy Governor for Investor Services and Consulting explained that the classification is the best method for grouping statistical units into homogeneous categories according to a sequential order, to create a general framework for comparing statistical data at the local, regional, and international levels. He noted that the new classification provides a set of statistical data according to aspects of economic activity (such as production, employment, wages,—capital assets—profits and losses—and balance sheets), in addition to providing a comprehensive framework for economic activities to facilitate the automated processing of descriptive formulas.
International Standard Industrial Classification
Al-Suwail also noted that the National Classification of Economic Activities is derived from the International Standard Industrial Classification of All Economic Activities (ISIC4) issued by the Department of Economic and Social Affairs of the United Nations Secretariat and is considered an international reference for productive and economic activities, as it specializes in collecting, generating, and analyzing a wide range of economic, social, and environmental data and information relied upon by United Nations member states.
In this context, Al-Suwail emphasized that the General Authority for Investment is working to strengthen research and analytical capabilities in the fields of investment and information, promote competitiveness, and bolstering confidence in international rankings, as well as developing an action plan with government agencies to support and implement these goals on the ground in a sustainable manner; all with the aim of bringing the competitiveness of the Kingdom’s investment environment up to the level of the world’s best countries according to global competitiveness standards and indicators.
Supporting Economic Activities
It is worth noting that the original version of the International Standard Industrial Classification of Economic Activities was adopted in 1948, and most countries subsequently adopted it as their national classification, making it an important tool for comparing statistical data
on economic activities internationally. In 1958, the first revision of the classification (ISIC_1) was published, followed by the second revision (ISIC_2) in 1968, and the third (ISIC_3) in 1990. The fourth revision of the International Standard Industrial Classification (ISIC-4) was published by the United Nations Economic and Social Council in 2006.
