Do you know which is the biggest free market economy in the Middle East and North Africa? It is Saudi Arabia, as it has almost 25% share out of the total Arab GDP. The biggest advantage is its location as it provides smooth access to export markets like Asia, Africa and Europe. Not only that, it has an expanding local market with an annual population growing at about 3.5 percent, which means more young people who have a good buying power.
The investment environment in the Kingdom shows that it is a liberal market with private enterprise policies and their law regarding the Foreign Investment permits 100 percent foreign ownership of business and also property. Not only that, Saudi Arabia can boast of social, political and financial stability and along with most modern infrastructure.
Advantages of investing in the Kingdom
The pros or investing in the Kingdom are:
- Saudi Arabia is one of the world’s largest economies and it is on the top of the list in the Middle East and North Africa Region – MENA. Fast growth rate with per-capita income forecasted to grow from USD $25,000 back in 2012 to USD $33,500 by the year 2020.
- It’s an open and friendly environment to start a business: The environment for doing business and expand enterprises in Saudi Arabia shows that their economy is open and supports private enterprises. The law too supports this because of 100% ownership possible for foreigners and availability of world-class infrastructure. Our experts in the field of company formation in Saudi Arabia can assist you to start a businessin the Kingdom.
- Duty-free access: Saudi Arabia provides a duty-free right to entry into other Gulf Cooperation Council (GCC) and Middle Eastern and North Africa region (MENA) areas. It has the pros of very good transportation system and infrastructure and it will soon also have a national railway system.
- Stability: Luckily Saudi Arabia has always remained stable and has seen no political or economic turmoil. This is also one of the main reasons that many investors feel that it’s a very beneficial place to start a business. Its currency, Saudi Riyal, is also a very stable currency and that also gives a positive motivation to the investors.
- It can offer huge cost advantages to investors because of the low cost of energy and also low prices of industrial land because of a lot of subsidies and incentives.
- The Kingdom has one of the biggest oil reserves in the world (owning around 26% of the total).
- The Capital Market Authority launched some new regulations in 2016 which allowed the creation of Real Estate Investment Traded Funds (REITs) on the Saudi Stock Exchange. The aim of doing so was to attract more and more investments. Introducing these funds is also a part of the execution of the Saudi Vision 2030 and the National Transformation Plan.
- Sizeable Capital to Spend– The Kingdom can boast of huge account surpluses; all thanks to the revenues of crude oil, which permits the government to lavishly spend on the economy’s development and work on various programs to fuel the economy further.
- Recent developments like Privatizations– The government has taken steps to privatize some industries, like telecom and electricity so that it can attract investments from outside, especially in the non-energy markets.
So let’s look at where all the opportunities lie.
- Oil, petrochemicals and gas
- Power sector like nuclear and renewable energy
- Education, human capital development and training,
- Water, wastewater
- Financial and other professional services
- Transport infrastructure like new rail, metro links
- Environmental technology and related services
- Information and communications technology
- Consumer/luxury goods
- Defence/security services
- Healthcare and other Life Sciences
- Mining
