RIYADH: As Saudi Arabia’s economy continues to grow, the Kingdom is seeking to strike the balance between maintaining relationships with established partners while also attracting new players into the market.
Whether it’s allowing international speculators to invest directly in the Kingdom’s stock market without needing to meet previous Qualified Foreign Investor criteria, or reforming rules around real estate ownership for non-Saudis, there is a drive to attract new talent and resources into the economy.
The Regional Headquarters Program, which came into force on Jan. 1 2024, also encouraged global firms to relocate their Middle East bases to the Kingdom.
Such a move made it easier for companies to bid for government contracts, alongside tax breaks and other incentives designed to make Saudi Arabia an attractive place to do business.
Faisal Al-Sarraj, deputy country leader, for professional services firm PwC Middle East, told Arab News the Saudi economy today “is more diversified, more competitive, and more open to investment.”
He pointed to the firm’s latest Middle East CEO Survey, which found that 94 percent of CEOs in the Kingdom are confident in domestic growth, which reflects how strongly business leaders believe in where the economy is heading.
Al-Sarraj added: “Looking back over the past few years, it has been the pace of change that continues to make a difference. It is shown in how quickly different sectors across the Kingdom have expanded, and are exceeding expectations.”
He highlighted tourism, mining, and technology as having “strong momentum,” alongside the continued expansion of the digital economy.
These changes have not just incentivised the creation of new relationships, they have also helped cement longstanding associations.
UK-based hospitality firm IHG Hotels & Resorts, which operates more than 6,600 destinations in over 100 countries, opened its first hotel in Saudi Arabia in 1975.
Today, it has 48 facilities across seven brands, a pipeline of 63 hotels across a diverse portfolio, and in 2023 set up its regional headquarters in Riyadh.
Maher Abou Nasr, the firm’s managing director for Saudi Arabia, told Arab News that the scale and pace of change in the Kingdom’s economy, particularly in tourism, has created a far more dynamic business environment.
“Our Riyadh office has given us an even closer view of this transformation,” he said, adding: “Being on the ground has strengthened collaboration with owners and stakeholders and reinforced our confidence in Saudi Arabia’s long-term growth story.”
Abou Nasr said tourism “has evolved from a supporting sector into a strategic economic driver.”
He added: “As the Kingdom moves towards its 150 million visitor target by 2030, we believe hospitality will continue to play an important role in supporting diversified, sustainable economic growth, and we are proud to contribute to that journey as a long-term partner to the Kingdom.”
Another firm with a longstanding relationship with Saudi Arabia is aerospace manufacturer Boeing.
It has been involved with the Kingdom for more than 80 years, and Asaad Aljomoai, president of Boeing Saudi Arabia, believes the Saudi leadership has delivered huge progress in bringing more tourism and travel to the Kingdom.
“Boeing is proud to support the rapid expansion and modernization of the civil aviation sector in Saudi Arabia, and we are working with the Kingdom’s carriers to provide them with modern, efficient aircraft that will support tourism growth, broader passenger traffic and shipping and logistics targets,” said Aljomoai.
The official highlighted how the Kingdom’s aviation sector has been reshaped by major developments such as large orders for Boeing aircraft by Saudia, Riyadh Air and AviLease, and the localization of advanced manufacturing and key jobs in the industry.
“Localizing maintenance, repair, overhaul and sustainment services has built industrial capability in Saudi and brought more skilled jobs and lifecycle revenue retention, helping move toward a more self-reliant aviation sector,” he said.
Aljomoai added that increased local sustainment and services for Boeing’s defence platforms, such as the F-15 and Apache, have not only expanded local capabilities and expertise by carrying out essential maintenance in the Kingdom, but have also meant greater operational readiness.
Indeed, it is these industry-adjacent sectors that are set to see even greater growth as Saudi Arabia moves from capability building to value capture and export readiness.
“Aerospace supply-chain and parts manufacturing will expand as MRO localization matures, creating clusters in machining, avionics and assemblies,” said Aljomoai, adding that Advanced Air Mobility and new urban or regional transport models will open markets for operations, training and digital air-traffic systems; where Boeing is well positioned for the future, with its unmanned electric vertical take-off and landing “Wisk”.
Other sectors set to see benefits include metals and precision processing, particularly aluminium and titanium, and talent-driven sectors, including research and development commercialization, AI-enabled aerospace systems and university-industry partnerships.
As well as encouraging established global firms into the Kingdom — and enhancing existing relationships — the economic transformation has also prompted home-grown entrepreneurs to seize the opportunities on offer.
This has led to the emergence of so-called “unicorn” startups — those valued at $1 billion or more.
In Saudi Arabia, fintech platforms stc pay, Tabby, and Tamara have all been granted that status, underlining the vitality of the sector.
Paula Tavangar, co-founder of Saudi fintech RIFD, described the Kingdom’s economy as “one of the most ambitious and active markets globally.”
Formed in 2024, the company offers “Securitization-as-a-Service” involving digital tools that make it easier for companies, banks, and investors to structure and manage securitized assets.
It is exactly the sort of company that is flourishing as Saudi Arabia seeks to lead the way across the region and the globe in financial innovation.
Tavangar told Arab News: “We experienced the strong government support firsthand through programs such as Tech Champions led by the Ministry of Communication and Information Technology.
“The success of the regulatory sandboxes by the Saudi Central Bank and Capital Markets Authority, in addition to initiatives led by the National Technology Development Program and Misk can be seen in the fast-growing number of fintech companies in the Kingdom.”
The Kingdom has set the target of having 525 fintech companies operating in Saudi Arabia by 2030, and a 2024 report showed there were already 261 active firms.
Tavangar said the Kingdom provides the perfect environment to build, as decision makers in the Kingdom are not only open to innovation but see it as a requirement.
The attractiveness of Saudi Arabia’s economic landscape is also drawing in entrepreneurs from beyond the borders.
Premium dining platform SPICE was launched in Riyadh by industry veterans Zeid Husban, Wadi Hawi, and Yousef Sawalha — the entrepreneurs who built and exited ifood.jo to Delivery Hero in 2016 and POSRocket to Foodics in 2022.
Husban, originally from Jordan, told Arab News: “We deliberately chose to headquarter SPICE in Saudi Arabia, following our previous two exits.”
He added: “For founders looking to build for the Middle East market and considering global expansion, there’s no better country to be headquartered in.”
• With additional reporting by Nour El-Shaeri
