For myself and many others like me, Saudi Arabia has long been a preferred destination for investment due to its size, proximity and audience capacity. However, in recent years we have seen the country’s plans to diversify away from oil and broaden its economy.
These changes will have a significant impact on how businesses operate and also bring multiple opportunities as Saudi Arabia is looking to develop a more business-friendly environment and attracting business owners like me.
Keeping the economic expansion road map in mind, it was a no-brainer to expand OWS Automotive in the kingdom. Rapid growth will be ignited by the country’s extensive infrastructure development and economic reforms. It won’t just be OWS Automotive but also businesses under OWS Capital will plan its strategic expansion into Saudi Arabia over the course of the next five years.
As a business owner, the social and economic plans that have been laid out under vision 2030, are not only attractive for investors who already have a footprint in this region but also for global companies as well.
Social and economic reforms
The National Transformation Programme is about halfway through its five-year goals under Saudi Vision 2030, a radical economic and social reform plan that was introduced by the government and we all witnessed its launch in 2016. It is effectively implementing social and economic reforms that are distinctly reshaping the kingdom.
I predict that Saudi Arabia will be one of the main growth engines of the Middle East over the coming decade. The country has recently announced a series of reforms to liberalise its economy and encourage more foreign direct investment. This includes reducing restrictions on foreign ownership and loosening religious constraints on dress codes and social customs.
Fastest growing economy
The International Monetary Fund (IMF) predicted that the kingdom will have one of the fastest-growing economies in the world by 2022 earlier this year. It revised its annual prediction and now anticipates that its GDP would grow by 7.6 percent, the strongest rate in more than a decade. According to the IMF, the kingdom must continue its reform trajectory.
The ongoing execution of Vision 2030 and related policies will aid in the modernisation and diversity of the economy, paving the path for stronger and more consistent growth in the economy. I would advise businesses seeking growth opportunities to see Saudi Arabia as an increasingly attractive option given its unique position in the Arab world: if you want to tap into the Middle East market without having language or cultural barriers, then now is the time for your company to expand into Saudi Arabia.
Foreign firms working in the kingdom can choose from a number of business formations, including subsidiary companies, branch offices, joint stock companies, and technical and scientific services offices (TSOs), each with its own benefits, prerequisites, and distinctive commercial activities and registration requirements.
The most popular form of business entity created by foreign investors entering the Saudi market is a limited liability company (LLC), which can have as few as two shareholders and as many as 50 owners with a minimum capital investment of about $133,100 (SAR500,000).
The country has a young population, with two-thirds of the population being under 35*, and a high level of education, making it an attractive market for businesses looking to grow.
I foresee that the private sector will be an increasingly important driver of economic activity, with increased investment in non-oil sectors such as construction, telecommunications, and transportation infrastructure in an effort to boost economic activity and create jobs for Saudi citizens as well as entice expats over.
KAEC – The economic frontier
I just see so much potential in the Saudi market, and that’s what I find fascinating about King Abdullah Economic City (or KAEC for short), which launched in 2005 and is at only 40 percent complete. Yet, it is still attracting international sports events and global companies. Part of KAEC’s strategy for success is to establish a reputation as a centre for “elite” sports, attracting tourists with unique activities that are hard to find in other places.
Also, through its thriving King Abdullah Port being rated the second fastest growing port in the world by Alphaliner in 2018, KAEC has mostly benefited from its expanding position in logistics and efforts to draw in foreign companies. Existing companies include Swedish retailer IKEA, the pharma giant Pfizer, the French oil firm Total, and the chocolate maker Mars.
We are seeing that these companies, along with KAEC’s excellent beachfront location, are causing a rise in the demand for houses in the region. People are buying here as an investment with the plan to rent the property out or buy second homes, as a beachfront getaway.
To help these rising numbers of property investors, KAEC has, on its part, introduced a number of perks. For instance, during the month of August, KAEC ran a promotion dubbed “Own a Turquoise View and Get a Car Free.” As the name implies, this campaign provided a free car in exchange for buying a property, with flexible, zero percent interest, five-year payment plans, and low 20 percent down payments.
I don’t know of any other similar campaign in the region and I think it’s a great way to illustrate Saudi’s future thinking and its grand plan. The kingdom is really serious about attracting both locals and expats to the area.
Game changer
I can’t mention their future grand plans without dropping in that KAEC may very soon be the home to the hotly anticipated Hyperloop, from California-based Virgin Hyperloop One. Virgin Hyperloop One is pursuing relationships with the nearby King Abdullah University of Science and Technology (KAUST), which suggests that KAEC could play a significant role in the development of the technology. This will be game-changing for Saudi as a whole, not just KAEC.
We are so used to seeing ground-breaking tech or scientific discoveries in other countries such as the US or UK, it’s about time we had the same recognition in the Middle East. Exciting times!
So, with major international golf tournaments, global companies setting up their offices, a logistics hub and a developing residential market, and so much more, it seems that KAEC is fast becoming the destination to show the world what Saudi Arabia is capable of and driving forward the incredible Saudi Vision 2030.
Follow us on
Brand View allows our business partners to share content with Arabian Business readers.
The content is supplied by Arabian Business Brand View Partners.
