Prime Highlights:
42 percent of Saudi adult’s plan to start a business within the next three years, a record level since 2016.
Saudi Arabia aims at increasing the contribution of the private sector to GDP from 40% to 65% by 2030, and that SMEs are expected to rise from 20% to 35% of GDP.
The key reforms include 100% foreign ownership in most sectors and simplified business registration processes, making the Kingdom a top destination for entrepreneurs.
Key Background:
The entrepreneurial landscape in Saudi Arabia has been changing, mapped out by strategic reforms responding to the Kingdom’s Vision 2030. This transformation is starting to change the entire nation’s economy and place it as one of the fast-emerging centers for global business. According to a report from the Center for International Communications, 42% of Saudi adults had plans to start their own business in the next three years, showing the highest entrepreneurial intent since 2016. Indeed, it is seen that 25% of businesses in the country are still young. This signals a strong future for economic diversification in the Kingdom through the entrepreneurial ecosystem.
In furtherance of this broad economic diversification strategy, Saudi Arabia also hopes to increase the contribution of the private sector to GDP from its present 40% to 65% by 2030. As part of these efforts, it is encouraging an entrepreneurship and innovation-based business environment that is primarily aimed at promoting the role of small and medium enterprises.
Regulatory reforms that have made it easier for businesses to operate, attract foreign investment, and also ease the way of business establishment have accelerated this shift. Saudi Arabia was recently ranked by the Global Entrepreneurship Monitor as a top destination for startups, given its ease of business establishment and abundant opportunities.
Additional factors that have improved the Kingdom’s attraction to international entrepreneurs include government policies like 100% foreign ownership in most sectors, tax exemptions, and fast-tracked licensing processes. The strategic location, advanced infrastructure projects like NEOM, and lively venture capital activity make Saudi Arabia an attractive market for global investors.
Funding and mentorship as well as capacity-building for start-ups will also be sourced through institutions such as Monsha’at, with venture capital activities on the increase, putting Saudi Arabia to lead the global list of places to foster entrepreneurship. Startups have not only helped drive the growth of Saudi Arabia’s economy but also work toward sustainability in key sectors including clean energy and smart infrastructure set to align with Vision 2030. This wave of entrepreneurial growth, along with government support, will help put Saudi Arabia on the road to
diversifying its economy, creating jobs, and cementing its global position as a center of innovation and commerce.
