The Top Growing Business Sectors in Saudi Arabia

The Top Growing Business Sectors in Saudi Arabia

- Mohammad Zreik

Saudi Arabia is quickly becoming a prime destination for entrepreneurs and investors. Traditionally reliant on its vast oil reserves—the second largest in the world—the Kingdom is now undergoing a significant economic transformation. Under the ambitious Vision 2030 plan, Saudi Arabia is diversifying its economy, creating a wealth of opportunities across various sectors.

The government is rolling out numerous incentives to attract foreign investment, including loan programmes, attractive land solutions, tax credits and exemptions, and financial incentives for research and development, making it an opportune time for entrepreneurs to explore this dynamic and rapidly evolving market.

Here is a look at some of the most promising sectors poised for growth.

The Tourism Business in Saudi Arabia

Of all the sectors being revitalised by Saudi Arabia’s Vision 2030, tourism and quality of life are undergoing some of the most profound and visible transformations. In 2019, Saudi Arabia opened its doors to international leisure tourism for the first time, revealing a wealth of unexplored destinations that significantly enhance its already thriving religious tourism market.

Saudi Arabia plans to boost tourism's contribution to GDP from 3% to 10% by 2030. The Kingdom is targeting 100 million annual visitors by 2030, compared to 17 million in 2019, which illustrates the sector's anticipated exponential growth. This ambitious goal is supported by significant government investments and initiatives, such as the $500 billion NEOM mega-city project and the Red Sea Project, which aims to create a luxury tourism destination featuring pristine islands, coral reefs, and a diverse marine ecosystem.

These initiatives provide excellent first-mover advantages for investors eager to enter a nascent, yet rapidly expanding, market.

Renewable Energy Companies in Saudi Arabia

Saudi Arabia’s energy sector, traditionally reliant on oil, is undergoing a significant transformation. Vision 2030 aims to meet over 50% of the Kingdom's energy needs with renewable sources, spurring demand for solar, wind, and other sustainable energy technologies. The announcement of a $270 billion investment in low-carbon energy projects by 2030 highlights the Kingdom's commitment to sustainability and economic diversification.

This shift is supported by substantial government incentives, including tax breaks, subsidised loans, power purchase agreements, and strategic land allocations. These initiatives aim to attract investment and reduce barriers to entry for renewable energy projects.

Investors can tap into a range of opportunities, from large-scale solar and wind farms to innovative renewable energy technologies and component manufacturing.

Healthcare and Life Sciences Industry in Saudi Arabia

Saudi Arabia’s healthcare and life sciences sector is poised for remarkable growth, driven by the Kingdom’s ambitious National Biotechnology Strategy launched in January 2024. This strategy aims to position Saudi Arabia as a biotech leader in the MENA region by 2030 and as a global biotech hub by 2040. The government’s firm commitment to developing a robust healthcare ecosystem is evident, with the sector accounting for 17.7% of the country’s budget expenditure in 2021, making it the third largest recipient of government funding.

The Kingdom’s population of 35 million, with nearly 60% under the age of 35, creates a substantial and growing market for healthcare services and life sciences innovations.

Significant opportunities exist in manufacturing, clinical trial infrastructure, and R&D and these are supported by incentives such as tax breaks, research grants, and the establishment of research and innovation hubs. The government's push for privatisation and new healthcare financing models further expands the potential for private sector participation.

The Logistics Sector in Saudi Arabia

Saudi Arabia’s transport and logistics sectors are central to its developmental goals. Strategically positioned at the crossroads of major international trade routes, Saudi Arabia is optimally located for distributing goods within the Arabian Peninsula, the Levant, and East Africa—regions with a combined GDP of $2.41 trillion and 647 million consumers. The Red Sea alone captures 12% of global container trade annually, highlighting the Kingdom's pivotal role in global logistics.

With a 55% share of the GCC's logistics market and an already robust network featuring 10 ports, over 40 industrial cities and zones, and a railway system spanning more than 5,000 km, the country's infrastructure is highly impressive. However, significant investment is also being directed towards expanding this network, including new airports, freight stations, and 2,000 kilometres of railway lines for both freight and passenger transport, all of which will require significant private sector involvement and create opportunities for logistics companies, infrastructure development firms and technology providers to participate.

The growth of business opportunities in Saudi Arabia

Saudi Arabia is on the brink of a new era of economic growth and diversification. With visionary initiatives under Vision 2030, the Kingdom is transforming into a hub of innovation and opportunity across various sectors. Entrepreneurs and investors willing to seize these opportunities and act now will be well-positioned to thrive in a rapidly evolving market.

How Can PRO Partner Group Help?

Setting up a business in Saudi Arabia can be quite complex with regards to regulatory requirements and compliance. This is where the expertise of a professional corporate services provider becomes invaluable. PRO Partner Group has an experienced team on the ground in KSA who can assist to find the perfect licensing solution for your business.

PRO Partner Group can guide you through every step of setting up your business in KSA, from initial registration with the relevant authority to obtaining your trade licence and ensuring compliance with all local and international regulations.

If you need assistance with this or with any other related company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Saudi Arabia, Bahrain, Oman or Qatar, then please do get in touch with us on +966 (0)535 377 578 for Saudi Arabia or +971 (0)4 456 1761 for Dubai, email us at ksa@propartnergroup.com or complete the contact form below and we will be delighted to assist you.

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