Saudi Industrial Investments Rise by 54% Following Exemption from Financial Fees

A factory in Saudi Arabia. (SPA)
A factory in Saudi Arabia. (SPA)
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Saudi Industrial Investments Rise by 54% Following Exemption from Financial Fees

A factory in Saudi Arabia. (SPA)
A factory in Saudi Arabia. (SPA)

The Federation of Saudi Chambers announced that industrial investments in the Kingdom have increased by 54%, reaching around SAR 1.5 trillion. This surge follows a 2019 government decision to exempt the industrial sector from financial fees.

A report by the Federation assessed the economic impact of the government's decision to bear the financial fees for the industrial sector from 2019 until the end of 2025. The study used a comprehensive approach, measuring the decision’s impact based on seven economic indicators: contribution to GDP, the number of industrial establishments, investment volume, employment, non-oil exports, the quality of national products, and foreign investments in the sector.

According to the report, economic data and indicators confirm the positive effects of the exemption on the national economy overall, and the industrial sector in particular.

The sector’s GDP contribution rose from SAR 392 billion in 2019 to SAR 592 billion in 2023, accounting for 14.7% of GDP. The number of industrial establishments grew from 7,625 in 2019 to 11,868 by 2024, a growth rate of 55.6%. Additionally, investments in the sector increased by 54%, reaching approximately SAR 1.5 trillion compared to SAR 992 billion previously.

The report highlighted that foreign investments in the industrial sector have grown, thanks to the decision to bear financial fees. The number of foreign factories increased from 622 to 1,067, reflecting a growth rate of 71.5%. The capital invested in the sector grew from SAR 43 billion to SAR 93 billion, a growth rate of 116.2%.

By the end of the first quarter of 2024, the number of workers in the industrial sector reached around 1.2 million, including 358,000 Saudis, with a localization rate of about 28%. Saudi workers in the industrial sector represent around 12.9% of the total Saudis employed in the private sector.

The industrial sector became the largest contributor to creating jobs for Saudis during the period from Jan. 1, 2023, to March 31, 2024, with the number of nationals increasing by 59%, adding more than 82,000 jobs.

The report also noted that the industrial sector helped boost non-oil exports, which reached an estimated SAR 208 billion, achieving a 12% growth.

Additionally, the report explained that the decision contributed to improving the quality of national products, through the adoption of new business models by industrial establishments, the localization of the latest technologies in manufacturing, the attraction of skilled talent, and the increase in product offerings to meet local market demands.

These efforts resulted in a rise in the percentage of industrial product exports, increased domestic demand for local products, and a higher number of products receiving the Saudi Quality Mark from the Saudi Standards, Metrology, and Quality Organization.

In September 2019, the government issued a decision to bear the financial fees imposed on expatriate workers in industrial establishments. The decision was recently extended until the end of 2025. Over 8,000 industrial establishments have benefited from the move, with the estimated cost of expatriate labor fees on the industrial sector amounting to around SAR 5 billion.



Saudi Real Estate Projects Surpass $40 Bn in 2024

Officials are seen at a panel discussion at the Real Estate Future Forum in Riyadh, Saudi Arabia. (Real Estate General Authority)
Officials are seen at a panel discussion at the Real Estate Future Forum in Riyadh, Saudi Arabia. (Real Estate General Authority)
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Saudi Real Estate Projects Surpass $40 Bn in 2024

Officials are seen at a panel discussion at the Real Estate Future Forum in Riyadh, Saudi Arabia. (Real Estate General Authority)
Officials are seen at a panel discussion at the Real Estate Future Forum in Riyadh, Saudi Arabia. (Real Estate General Authority)

Saudi Arabia’s real estate sector saw significant growth in 2024, with 192 licenses issued for projects valued at 147 billion riyals ($40 billion).

This growth is supported by new regulations and laws that reflect the government's focus on strengthening the market.

Speaking at the Real Estate Future Forum, held in Riyadh from January 27 to 29, Saudi Minister of Municipalities and Housing Majid Al-Hogail said the sector has introduced over 20 new real estate regulations in recent years. These changes aim to boost the sector's appeal, vitality and reliability.

“The real estate sector in Saudi Arabia is no longer just about urban development; it is now a key driver of economic and social change, as well as sustainability and innovation,” said Al-Hogail.

He also pointed out that the forum offers unique global opportunities to grow the real estate sector and improve quality of life by building sustainable cities with services that meet the needs of residents.

On the private sector, Al-Hogail explained it currently manages 39% of the real estate market and aims to increase this to 70%. He also noted that the sector’s revenue has grown fourfold in the past three years.

Abdullah Al-Hammad, CEO of the Real Estate General Authority, said that the real estate sector’s contribution to the gross domestic product reached 12%, reflecting its growing importance in the national economy.

“The real estate sector achieved the highest participation rate in the labor market, with 25% of the participants in the social insurance system,” Al-Hammad said, emphasizing the sector’s role in employment generation and economic diversification.

More than 1,130 licenses for foreign real estate investments were issued during the third quarter of 2024, demonstrating increased international interest in the Saudi market, he remarked.