JEDDAH: The Saudi capital is witnessing a surge in business activities since multinational companies announced moving their regional bases to the city.
So far, over 40 multinational companies in sectors including IT, food and beverages, consulting and construction have announced plans to set up headquarters in Riyadh and many more planning to make their move.
Paul Arnold, managing director of Sovereign Saudi Arabia, said the announcement has caused a sudden increase in business activities in the Kingdom.
“From our perspective, foreign direct investment is coming into Saudi Arabia. The regional HQ announcement has got people talking. So the amount of interest in activity and questions that we're building around the necessity to have an HQ in Riyadh, it's been significant,” Arnold told Arab News.
In February this year, the Kingdom gave foreign firms until the end of 2023 to set up headquarters in the country or risk losing out on government contracts. This move has given a new momentum to the economic activities in the Kingdom, particularly in the capital.
Arnold said several ongoing giga-projects are obviously attracting a lot of foreign companies to do business in the Kingdom.
“As the regulatory environment changes here and improves, it means that foreign businesses are registering here in numbers we’ve never seen before,” he added.
Stuart D’Souza, co-founder and director of Arabian Enterprise Incubators, told Arab News that most of the companies operating in the Kingdom already had a significant footprint.
“The fact that they are joining this very high-profile program is good news.”
D’souza said the Saudi Investment Ministry has done very well in attracting foreign companies and in retaining those firms in the Kingdom.
“The direction is very clear. If you want to do business in Saudi Arabia, you need to be registered in the Kingdom. If you’re a significant business, and so much of your regional revenue comes from the Kingdom, you should have your regional headquarters here in the country,” he said.
Pointing to the investment landscape in the Kingdom, he said the existence of a professional services company such as Sovereign in the Kingdom will help foreign businesses in setting up their offices.
“Opportunities for all sorts of other companies have significantly increased in Saudi Arabia in the last couple of years,” he said.
“All of that is driven by these giga-projects, whether it’s NEOM, be it the Red Sea project, AlUla, Qiddiya, Soudah or projects in the Eastern Province. The fact that those projects are spread all over the Kingdom means our clients are actually all over Saudi Arabia and we're supporting them with our services,” said D’Souza.
He added: “These projects are all happening. In Riyadh, you can drive down and see what is happening in Qiddiya in terms of the lower plateau development, and (to witness) upper plateau development, go to the Diriyah Gate Development Authority and you'll see all the construction underway.”