Prime Highlights
- Nine out of ten UAE-based international businesses plan to invest in Saudi Arabia over the next five years, showing strong confidence in the kingdom’s growth.
- Technology, innovation, and sustainability are top sectors attracting investment, reflecting Saudi Arabia’s focus on long-term economic development.
Key Facts
- The HSBC study surveyed 4,000 international businesses with annual revenues between $50 million and $500 million, covering Saudi Arabia’s trade links with eight major global markets.
- Saudi Arabia’s Vision 2030 plan aims to reduce dependence on oil, grow non-oil sectors, and boost foreign investment, creating new opportunities for international businesses.
Background:
Nine out of ten international businesses operating in the UAE plan to invest in Saudi Arabia over the next five years, betting on the kingdom’s continued economic growth, according to a new HSBC report.
The New Networks of Capital: Saudi Arabia study surveyed 4,000 international businesses with annual revenues of $50 million to $500 million. It looked at trade and investment links between Saudi Arabia and eight major markets, including the UK, China, the US, India, Germany, the UAE, Hong Kong, and Egypt.
More than three-quarters of UAE businesses see Saudi Arabia as important for growth and want to increase trade and investment in the next six months. Respondents highlighted Saudi Arabia’s economic stability (59%), growth potential (58%), and strategic position as a gateway to other Gulf markets (42%) as key reasons for investment.
Mohamed Al Marzooqi, Chief Executive UAE at HSBC Bank Middle East, said: “As Saudi Arabia’s leading trading partner in the GCC and its third largest globally, the UAE continues to play a pivotal role in strengthening trade and investment flows. This intra-Menat investment reinforces confidence in the region’s economic future.”
The International Monetary Fund (IMF) recently upgraded its 2025 economic growth forecast for Saudi Arabia to 4%, up from 3%, following a faster-than-expected recovery in oil production. The IMF expects this growth pace to continue next year.
According to HSBC, nearly half of UAE businesses prefer private equity and venture capital funds (48%) to enter the Saudi market, followed by mutual funds (46%) and joint ventures (45%). Technology and innovation remain the most attractive sectors, with 47% of current and 46% of future investments directed there. Project finance (52%) and risk management (46%) were seen as the main ways for businesses to invest in Saudi Arabia.
The report also showed that 96% of UAE businesses see Saudi Arabia’s focus on sustainability as a reason to invest, and 94% consider the country a reliable place for trade, even in uncertain times.
