Saudi Business Sector Achieves Trillions in Revenue Thanks to Government Incentives

King Abdullah Financial District (KAFD) in Riyadh (SPA)
King Abdullah Financial District (KAFD) in Riyadh (SPA)
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Saudi Business Sector Achieves Trillions in Revenue Thanks to Government Incentives

King Abdullah Financial District (KAFD) in Riyadh (SPA)
King Abdullah Financial District (KAFD) in Riyadh (SPA)

Government incentives have played a pivotal role in enabling Saudi Arabia’s business sector to achieve operational revenues of SAR 5.3 trillion ($1.4 trillion), with operational expenditures reaching SAR 2.2 trillion ($586 billion).

According to the 2023 Comprehensive Economic Survey conducted by the General Authority for Statistics (GASTAT), employee compensation totaled SAR 544.7 billion ($145 billion), while total fixed capital formation amounted to SAR 867.8 billion ($231 billion).

Legal and commercial expert Dr. Osama Al-Obaidi explained to Asharq Al-Awsat that the increase in operational revenues is largely due to government initiatives aimed at enhancing the private sector’s contribution to the national economy and GDP in line with Vision 2030. These efforts have driven innovation, localized technology, and established Saudi Arabia as a global investment destination while creating high-quality jobs that contribute significantly to wages and benefits.

Al-Obaidi emphasized that economic diversification under Vision 2030 has resulted in positive outcomes through incentives for investments in industry, mining, and strong construction activity. These efforts span residential, commercial, and investment projects while targeting key sectors like telecommunications, technology, artificial intelligence, electric vehicles, transportation, and logistics, as part of the Kingdom’s strategy to become a global logistics hub.

Additionally, Saudi Arabia’s focus on localizing technology, promoting innovation, and fostering tourism and entertainment has driven the growth of national industries and the service sector while boosting employment rates, Al-Obaidi noted.

The government’s commitment to creating a competitive environment, increasing non-oil sector contributions, and providing incentives has strengthened the Kingdom’s ability to attract foreign investments and create new job opportunities. This, in turn, has enhanced operational revenues and improved efficiency, productivity, and quality across industries and services.

Gross Domestic Product Impact

Economist Ahmed Al-Jubeir told Asharq Al-Awsat that the government is offering comprehensive incentives to private sector players, including small and medium enterprises (SMEs), to capitalize on available initiatives and programs. These efforts are designed to promote business growth and help companies achieve their goals, ultimately benefiting Saudi GDP and the broader economy.

The initiatives and programs cover various private sector activities, providing low-interest loans and opportunities to participate in strategic and large-scale projects in health, tourism, real estate, and more. Specialized programs for construction and equipment sectors are also part of these efforts, Al-Jubeir added.

The latest data from the General Authority for Statistics confirms the government’s ongoing support for the private sector, which recorded operational revenues of approximately SAR 5.3 trillion last year.

Moreover, data indicates that the manufacturing sector contributed 30% of total operational revenues, followed by mining and quarrying at 21.8%, and wholesale and retail trade at 16%. Together, these sectors accounted for 67.8% of total revenues. Other sectors, including construction, finance and insurance, information and communications, and transportation and storage, contributed smaller shares.

Operational Expenditures

The report also revealed that manufacturing represented 41.5% of total operational expenditures, followed by wholesale and retail trade at 22.3% and construction at 7.6%. Collectively, these sectors accounted for 71.4% of operational expenditures, with other sectors like information and communications, mining and quarrying, and finance and insurance contributing the remaining shares.

Fixed Capital Formation

Total acquisitions of fixed assets reached SAR 1.5 trillion ($399.5 billion), while sales of these assets amounted to SAR 646.2 billion ($172 billion). Wholesale and retail trade had the highest contribution to total fixed capital formation at 22.6%, followed by manufacturing at 22.4%, mining and quarrying at 14.9%, and construction at 12.2%.

Other sectors, including information and communications, transportation and storage, and finance and insurance, contributed smaller shares.

According to GASTAT, total salaries and wages amounted to SAR 461.1 billion ($122.8 billion), representing 84.6% of total employee compensation. Meanwhile, benefits and allowances totaled SAR 83.6 billion ($22 billion), making up 15.4% of total compensation.



Saudi Arabia Allows Contracting Exceptions for Firms without Regional HQ

The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
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Saudi Arabia Allows Contracting Exceptions for Firms without Regional HQ

The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)

Saudi Arabia has introduced greater flexibility into its investment environment, allowing government entities, under strict controls to safeguard spending efficiency and ensure the delivery of critical projects, to seek exceptions to contract with international companies that do not have regional headquarters in the kingdom.

The Local Content and Government Procurement Authority notified all government bodies of the mechanism to apply for exemptions through the Etimad digital platform.

The step is designed to balance enforcement of the “regional headquarters relocation” decision, in force since early 2024, with the needs of technically specialized projects or those driven by intense price competition.

Under a government decision that took effect at the start of 2024, state entities, including authorities, institutions and government-affiliated funds, are barred from contracting with any foreign commercial company whose regional headquarters in the region is located outside Saudi Arabia.

According to the information, the Local Content and Government Procurement Authority informed all entities of the rules governing contracts with companies that lack a regional headquarters in the kingdom and related parties.

Government entities may request an exemption from the committee for specific projects, multiple projects or a defined time period, provided the application is submitted before launching a tender or initiating direct contracting procedures.

Submission mechanism

In two circulars, the authority detailed how to submit exemption requests and clarified the cases in which contracting is permitted under the controls. It said the exemption service was launched on the Etimad platform in November 2025.

The service is available to entities that float tenders through Etimad. Requests for tenders launched before the service went live, as well as those issued outside the platform, will continue to follow the previously adopted process.

Etimad is the kingdom’s official financial services portal run by the Ministry of Finance, aimed at driving digital transformation of government procedures and boosting transparency and efficiency in managing budgets, contracts, payments, tenders and procurement. The platform streamlines transactions between state entities and the private sector.

Technical criteria

When issuing the contracting controls, the government made clear that companies without a regional headquarters in Saudi Arabia, or related parties, are not barred from bidding for public tenders.

However, their offers can only be accepted in two cases: if there is no more than one technically compliant bid, or if the offer ranks among the best technically and is at least 25% lower in price than the second-best bid after overall evaluation.

Contracts with an estimated value of no more than 1 million riyals ($266,000) are also exempt. The minister may, in the public interest, amend the threshold, cancel the exemption or suspend it temporarily.

More than 700 headquarters

More than 700 multinational companies had relocated their regional headquarters to Riyadh by early 2026, exceeding the initial target of attracting 500 companies by 2030. The program seeks to cement the kingdom’s position as a regional business hub and to localize global expertise.

When announcing the contracting ban, Saudi Arabia said the move was intended to incentivize foreign firms dealing with the government and its affiliated entities to adjust their operations.

It aims to create jobs, curb economic leakage, raise spending efficiency and ensure that key goods and services procured by government entities are delivered inside the kingdom with appropriate local content.

The government said the policy aligns with the objectives of the Riyadh 2030 strategy unveiled during the recent Future Investment Initiative forum, where 24 multinational companies announced plans to move their regional headquarters to the Saudi capital.

It stressed that the decision does not affect any investor’s ability to enter the Saudi economy or continue working with the private sector.

 


IMF Board to Review Staff-level $8.1 Bln Agreement for Ukraine

The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko
The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko
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IMF Board to Review Staff-level $8.1 Bln Agreement for Ukraine

The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko
The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko

The International Monetary Fund on Thursday said its board ​would review a staff-level agreement for a new $8.1 billion lending program for Ukraine in coming days.

IMF spokeswoman Jule Kozack told reporters that Ukrainian authorities had completed the prior actions needed to move forward with the request ⁠of a new ⁠IMF program, including submission of a draft law on the labor code and adoption of a budget.

She said Ukraine's economic growth in 2025 ⁠was likely under 2%. After four years of war, the country's economy had settled into a slower growth path with larger fiscal and current account balances, she said, noting that the IMF continues to monitor the situation closely.

"Russia's invasion continues to take a ⁠heavy ⁠toll on Ukraine's people and its economy," Kozack said. Intensified aerial attacks by Russia had damaged critical energy and logistics infrastructure, causing disruptions to economic activity, Reuters quoted her as saying.

As of January, she said, 5 million Ukrainian refugees remained in Europe and 3.7 million Ukrainians were displaced inside the country.


US Stocks Fall as Iran Angst Lifts Oil Prices

A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid
A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid
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US Stocks Fall as Iran Angst Lifts Oil Prices

A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid
A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid

Wall Street stocks retreated early Thursday as worries over US-Iran tensions lifted oil prices while markets digested mixed results from Walmart.

US oil futures rose to a six-month high as Iran's atomic energy chief Mohammad Eslami said no country can deprive the Islamic republic of its right to nuclear enrichment, after US President Donald Trump again hinted at military action following talks in Geneva.

"We'd call this an undercurrent of concern that is bubbling up in oil prices," Briefing.com analyst Patrick O'Hare said of the "geopolitical angst."

About 10 minutes into trading, the Dow Jones Industrial Average was down 0.6 percent at 49,379.46, AFP reported.

The broad-based S&P 500 fell 0.5 percent to 6,849.35, while the tech-rich Nasdaq Composite Index declined 0.6 percent to 22,621.38.

Among individual companies, Walmart rose 1.7 percent after reporting solid results but offering forecasts that missed analyst expectations.

Shares of the retail giant initially fell, but pushed higher after Walmart executives talked up artificial intelligence investments on a conference call with analysts.

The US trade deficit in goods expanded to a new record in 2025, government data showed, despite sweeping tariffs that Trump imposed during his first year back in the White House.