Hundreds of companies consider Saudi Arabia

Reuters/Nicholas Maeterlinck/Belga Photo

A survey of 660 companies described as high-growth and from more than 50 countries around the world found more than two thirds were considering expanding into Saudi Arabia.

Of the 450 across 37 sectors looking to move into the kingdom, half of them plan on doing so within the next six months.

Ease of doing business in Saudi Arabia has dramatically improved since 2018, according to the survey, which was conducted by AstroLabs, a company that advises businesses on entering Saudi Arabia and the United Arab Emirates.

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“As we stand at the midpoint of Saudi Vision 2030, the kingdom has become a pivotal hub for global and regional companies,” the 2023 Saudi Market Entry Report concluded.

“Amid rapid infrastructural advancements, the demand for cutting-edge technologies is being met by visionary companies entering the market, contributing to the development of Saudi Arabia’s smart cities,” it said. 

Thirty percent of companies who have already expanded into Saudi Arabia are from the United States and Britain, Astrolabs said.   

Astrolabs, which is based in Dubai, added that red tape reduction meant companies can set up within two months, against the eight to 12 months it took in 2018 when Saudi Arabia was first embarking on a massive reform plan to diversify its economy away from oil. 

The Saudi government is trying to drive up annual foreign direct investment to $100 billion, from $33 billion in 2022. 

Regional companies are now required to open Saudi offices for access to any government contracts worth SAR1 million ($270,000) or more. A new commercial code was introduced in December to ease an opaque legal system. 

“Companies looking at Saudi Arabia as their next leg of expansion are motivated by the sheer size of the market, a supportive business environment and economic stability,” the report said. Companies also feel a sense of urgency to seize a piece of the pie. 

Saudi Arabia was described by one real estate consultancy as the world’s biggest ever construction site as the country pushes ahead with mammoth projects such as Neom, Qiddiya, Diriyah, Jeddah Central and Red Sea Global, as well as a series of special economic zones. 

The government wants to make Riyadh a welcoming global capital by 2030, when it is due to host the World Expo. 

Astrolabs said the technology, construction and consulting sectors were attracting the most interest, and companies were able to find and hire local skilled labour with ease. 

Although Saudi Arabia ranked first in regional venture capital funding, securing a total of $1.4 billion in 2023, the report said there was still room to provide more funding for incoming businesses. There was also a need for more office space, it said.