Riyadh: The New Business Destination
Global MNCs such as Schlumberger, PepsiCo, Bechtel, and Boston Scientific announced plans to establish their regional headquarters in the Saudi capital on the second day of the Future Investment Initiative (FII). The decision of 24 such multinational corporations has underlined the increasing attractiveness of Riyadh as an international financial and investment hub.
The information came after Crown Prince Mohammed Bin Salman revealed ambitious plans to speed up the development of the city into one of the world’s top 10 urban economies and double its population size by 2030.
The president of the Royal Commission for Riyadh City informed the FII that a key priority was to make it easier to operate in the Kingdom for global businesses. The establishment of the King Abdullah Financial District special economic zone opens the door for international corporations to move to Riyadh. Now, at the heart of their largest regional market, they can leverage the first-mover advantage and take complete control. Riyadh’s efforts to make the city more livable were also highlighted, with plans for more sports and leisure facilities, large green spaces, as well as arts and cultural events.
A number of primary reforms relating to the creation and governance of special economic zones, labor and education laws will be ratified in the first half of this year, according to the information available.
For ten years, businesses operating in the zones can enjoy a variety of tax exemptions, benefits, changes in labor law and related exemptions from labor law, as well as quick and easy commercial licensing. These ventures will be accomplished primarily by the private sector, and they will be successful.
Approximately $220 billion has already been spent or allocated to projects in and around Riyadh as government investment, but the majority of the rest of the necessary investment will come from the private sector. The government collaborates as partners with the private sector. Detailed proposals for the city’s expansion would be ready by the second quarter. By that time, additional funding information would also be available.
In the long term, investment is crucial for enhancing productivity and improving the competitiveness of an economy. Without investment, an economy could have high levels of consumption, but this will lead to an unbalanced economy. Riyadh’s ambitious growth plans will favor the region as a whole, including other cities that serve as hubs for global businesses operating in the Middle East.