UAE is the country we all used to hear about when we talk about thriving countries. But, things have pivoted today.
Now, the spotlight has shifted to Saudi Arabia. With its Vision 2030 initiative, large consumer base and investor-friendly policies, Saudi Arabia has become a hotspot for entrepreneurs looking to set up business in the Middle East, not to mention the support by the government.
If you are someone on the fence about whether to start a business in Saudi, you must read on. We are about to tell you why, it’s the perfect place to launch your business.
1. Strong Economic Growth and Stability
Saudi Arabia is known worldwide as the hub of oil. However, they’re diversifying now, resulting in strong economic growth. Plus, the Vision 2030 has brought more investment to the non-oil industries. This makes Saudi a dynamic business environment.
- GDP Growth: Saudi Arabia’s GDP is expected to grow by 4.9% in 2025, according to the World Bank. This shows how stable the country’s economy is.
- Inflation Control: The inflation rates have been reduced to 1.7%. This gives businesses a predictable and stable environment for long-term planning.
2. Business-Friendly Environment and Reforms
The Saudi government now encourages entrepreneurs to do business by introducing major regulatory reforms. Basically, these reforms allow businesses to be set up and operated without much hassle.
Also, Saudi Arabia now ranks in the 62nd position in the World Bank’s Ease of Doing Business index. They were 30 positions backwards previously. A lot of factors go into this growth. This includes:
- Streamlined licensing
- Improved online services
- Simplified business registration processes
Other highlights:
- Foreign Investment: In the third quarter of 2024, Saudi Arabia had a 37% increase in net foreign direct investment. This emphasises its value as an investment hub.
- Simplified Company Formation: The government has implemented online business registration and expedited permit clearances, dramatically lowering bureaucratic barriers to business setup in Saudi Arabia.
3. Strategic Location and Access to Key Markets
Since Saudi Arabia is strategically situated at the crossroads of Asia, Europe, and Africa, it is considered an essential trade gateway to the Middle East.
Saudi Arabia also has the largest economy in the GCC, allowing businesses to reach over 50 million consumers across the region.
Furthermore, as a member of the World Trade Organisation (WTO) and the Gulf Cooperation Council (GCC), Saudi Arabia’s firms benefit from beneficial trade agreements and policies that improve market access.
4. Government Initiatives and Funding Support
Vision 2030 has paved the way for numerous opportunities for new businesses, particularly in technology, tourism, entertainment, and renewable energy.
Here is an interesting stat:
In 2023, SMEs in Saudi Arabia secured over $3.2 billion in funding. The Kafalah program has played a significant role in helping startups access crucial financing.
Furthermore, organisations such as the Saudi Industrial Development Fund (SIDF) provide financial assistance and guidance. This makes it easier for entrepreneurs to grow their enterprises.
5. Youthful and Tech-Savvy Workforce
Another highlight of Saudi Arabia is that it has a young, educated, and tech-driven population.
Here is a little yet massive stat: More than 90% of Saudi citizens are literate. This is due to the fact that the government is heavily investing in education and vocational training.
As for technology, mobile internet penetration in Saudi Arabia is projected to reach 74.52% by 2029. This offers better opportunities for digital businesses, e-commerce, and fintech.
6. Thriving Startup Ecosystem and Tech Advancements
Saudi Arabia’s startup ecosystem is growing tremendously. This is mainly fueled by the increasing venture capital investments and technological advancements.
According to a 2024 report, 42% of adults in Saudi Arabia intend to start their own businesses within the next three years, reflecting a strong entrepreneurial spirit.
That’s not all, the government is heavily investing in artificial intelligence (AI), including a $1.5 billion commitment to AI chip startup Groq and a $500 million investment from Salesforce to expand AI-related technologies.
7. Expanding Consumer Market and Industry Growth
Saudi Arabia’s growing middle class and increasing disposable income present immense opportunities for businesses across multiple sectors.
Statistics show that the e-commerce sector is set to grow to $13.3 billion by 2025, with a growth rate of 11.7% annually.
It’s also said that Vision 2030 aims to attract 100 million visitors annually by 2030, boosting opportunities in the hospitality, travel, and entertainment sectors.
Conclusion
It’s clear that Saudi Arabia is rapidly growing into a thriving hub for entrepreneurs, offering massive opportunities in various industries. Firstly, the country’s economy is apparently going upward. Secondly, the entrepreneurs have strong backing from the government. Also, the consumer market is continuing to grow. All these make Saudi Arabia a golden spot for business owners.
If you want to start a business in Saudi Arabia, it’s best you connect with one of the expert business consultants in Saudi Arabia, so that the process would be easier for you.