Since its launch in 2016, Vision 2030 has consistently represented a transformative and ambitious plan to leverage the Kingdom’s vast potential. The goal? To create a diversified and globally influential nation.
Over the years, this vision has thrust Saudi Arabia into the global spotlight, playing a crucial role in shaping the region as a strategic hub for business expansion.
The driving forces behind this influx of businesses are multifaceted, believes Alex Nicholls, Director of Expansion at AstroLabs. “The influx of new businesses in Saudi Arabia is driven by a synergy of Vision 2030 goals and strategic global collaborations. The framework is not just a blueprint for economic diversification. It’s a gateway to hyper-growth opportunities across various sectors. Vision 2030’s transformative agenda is pivotal, moving the economy towards sectors like manufacturing, technology, and renewable energy, among many others.”
Saudi Arabia’s growth is apparent in significant infrastructure investments, plans for 400,000 high-tech units by 2025, and developing regions like NEOM and AlUla. A strategic partnership with South Korea reflects a move toward high-tech industries, seen in initiatives like automated vehicle plants and advancements in electric vehicle manufacturing.
Also, the country’s second position on the 2021 Global Competitiveness Index is driven by digital governance and diversified economic strategies, adds Nicholls.
A 17% YoY growth in e-commerce and over 95% internet penetration boosts digital sectors. Incentives, infrastructure improvements, and a new regulatory environment allowing 100% foreign ownership actively promote foreign investment. Setting up involves engaging with entities like the Ministry of Commerce, MISA, and the Ministry of Human Resources, with AstroLabs in Riyadh aiding foreign businesses in overcoming challenges and enhancing growth.
These developments highlight Saudi Arabia’s dedication to transforming into a global innovation hub, actively inviting skilled and experienced global businesses to establish operations in the Kingdom.
REFORMS & STRATEGIES TRANSFORMING SAUDI ARABIA
In recent years, Saudi Arabia has undergone socially and economically significant reforms, leading to a surge in foreign investment, believes Nicholls.
A key example of this transformation is the allowance for 100% foreign ownership of companies, which was virtually unthinkable just five years ago.
He says, “These changes reflect the Kingdom’s commitment to creating a more open and flexible environment for global businesses. The introduction of the RHQ scheme has been a game-changer, offering incentives that extend beyond tax benefits, including strategic advantages like easier access to regional markets.”
Creating Special Economic Zones (SEZs), customized for specific industries and offering benefits like reduced corporate tax rates and flexible Saudization quotas adds to Saudi Arabia’s favorable business environment.
Combined with the RHQ scheme and broader economic reforms, these zones signify the country’s transition to a more dynamic, private-sector-driven economy. This strategy not only attracts global corporations but positions the Kingdom to leverage its expanding market and strategic location in line with the ambitious goals of Vision 2030, adds Nicholls.
Some of these companies, increasing regional investments, are from sectors like technology, fintech, tourism, renewable energy, and manufacturing.
The trend seen through AstroLabs Talent and HRO services is that most companies are increasing the number of employees within their Saudi entity. He adds, “Some of the companies that we have scaled into the Kingdom that are active contributors to the Saudi economy include Sweden’s leading engineering and architecture consultancy Sweco, Checkout.com, RSK, Kitopi, Artefact, and Grankraft – among many others across various sectors.”
The trend of multinational corporations entering Saudi Arabia is directly linked to the Kingdom’s efforts in economic diversification and nurturing a highly skilled workforce.
Lastly, Saudi Arabia requires foreign companies to establish regional headquarters to enhance economic integration. This strategic move fosters stronger commitments, benefiting both the kingdom and businesses. The requirement offers Saudization and visa exemptions, premium residencies, and eligibility for government tenders, making it an attractive proposition for foreign companies.
RIYADH – THE NEXT GLOBAL STARTUP HUB?
Riyadh is rapidly evolving into a major hub for startups and global businesses. Fueled by a vibrant VC community and government backing, the supportive ecosystem creates an ideal environment for innovation and entrepreneurship.
Nicholls says the city’s transformation into a business hotbed is crucial to Saudi Arabia’s broader economic strategy, aligning with the Kingdom’s vision to lead digital innovation and entrepreneurship.
The city, backed by a trillion-dollar investment, aims to globally reposition Saudi Arabia, transforming its King Khalid International into the King Salman International, projected to accommodate 120 million passengers annually by 2030.
And with the Kingdom’s commitment to a sustainable yet fast-tracked growth journey will create additional incentives to attract global startups to expand their operations to Saudi Arabia.
The Public Investment Fund’s strategic investments in sports, technology, and renewable energy also contribute to Saudi Arabia’s shift to a post-oil economy. Beyond sports development, these investments foster an ecosystem involving tourism, construction, entertainment, and media. Nicholls says, “This approach creates new avenues for economic growth and diversification, shaping the Kingdom’s economic landscape.”
THE ROAD TO 2030
As with any major economic transformation, there are challenges, particularly in adapting to the rapid pace of regulatory and market changes. However, these challenges also present opportunities for innovation and growth.
Nicholls says, “I am very optimistic about the growth potential in Saudi Arabia. The Kingdom’s strategic vision and commitment to diversifying its economy and investing in future-oriented sectors positions it well for sustained growth. This trajectory is not just about economic expansion. It’s about redefining Saudi Arabia’s role in the global economy and creating a legacy of innovation and progress.”
Saudi Arabia’s vision also extends beyond 2030, illustrated by hosting the 2034 FIFA World Cup. This showcases untapped opportunities as the Kingdom positions itself as a top destination for sports, tourism, business, and entertainment.
The revised target aims for 150 million annual tourists by 2030, up from the initial 100 million. The anticipation of the Saudi 2040 Vision by 2027 underscores that 2030 is only the starting point, with unexplored opportunities extending far into the future, believes Nicholls.
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