With globalization and the ever-increasing integration of markets, it’s expected that companies are expanding internationally, now, more than ever. The development of technology, improved transportation, and the mature internet have allowed companies to expand to countries in all corners of the world. Recently, in Saudi Arabia, King Salman’s Vision 2030 has been a catalyst for change, overseen by Crown Prince Mohammed. The modernizing and innovative reforms have helped transition the country from being esoteric to an accessible nation for foreign investors.
Saudi Arabia’s Vision 2030 has brought numerous reforms to the country to allow it to compete in the global economy and counteract the falling oil prices, the main income stream the nation has long been built on. Considering this, the nation has still managed to remain in the top 20 economies in the world and the largest in the MENA region.
Expanding into Saudi Arabia is an opportunity many companies have taken, with many gaps in the market due to their previously oil-dependent economy. The market displays many possibilities for foreign investors as the Kingdom has a young population, an attractive market for foreign investors, and business opportunities that the government encourages foreign investors to fill.
Considering the opportunities, how can your company utilize these in its growth strategy?
The reforms the Saudi government has implemented have been to create an attractive market for foreign investors, one of the Vision 2030 goals. Recently, we have seen reforms that challenge the social and economic standards of the nation, pushing the Kingdom beyond strict norms.
Notably, the lift of the driving ban on women meant that their participation in the workforce has continued to increase as they have easy access to transport. It has also shown positive effects on the economy by reducing the unemployment of women and creating new opportunities for economic growth.
The privatization plan is a government scheme to encourage foreign investors to actively participate in economic growth by privatizing government entities. In this program, companies were able to purchase government entities, some with full control and others on a long-term contract basis.
Additionally, the introduction of the bankruptcy law and the government creating easier requirements to enter the Kingdom through implementing online licenses and permits and faster processes have all assisted companies moving into the Kingdom.
The opportunities available in the Kingdom are growing as the government expands its efforts to reach the goal of becoming a diverse economy. The National Transformation Plan’s (NTP) objectives have a timeline until 2020 and opportunities available include:
We can expect continued growth and development in the Kingdom as they seek to create a “leading nation in all aspects”, in the words of King Salman. As the Kingdom continues to implement reforms, we can expect to see an emphasis on SMEs, as they currently aren’t large contributors to the GDP, but are important elements for economic growth, creating jobs, boosting exports, and supporting innovation.
The government will also support the future of entrepreneurs with business-friendly regulations, access to funding, international partnerships, and access to government tenders. Additionally, public-private partnerships will be supported by the government.
Saudi Arabia is now easier to expand into and with legitimate opportunities for foreign investors, it has proven to be the first choice for many companies expanding in the MENA region. Are your company using Saudi Arabia as a part of its growth strategy and taking advantage of the opportunities available in this growing nation?
If you would like support expanding into Saudi Arabia, contact us at +966 11 411 1127 or [email protected].