Saudi Arabia’s private sector booms: contribution to GDP is growing steadily to reach 65% by 2030, business registrations see 78% annual growth, more than 700 000 Saudis joined private sector in 2024;
Plenty of room for growth: $1.3 trillion is to be invested in the Kingdom’s private sector to foster collaboration and knowledge sharing and cultivate an enabling business environment;
National initiatives, PIF programs and diverse platforms were launched. If implemented effectively, these economic programs promise great earnings with growth perspectives for those attuning to the strategic priorities of the government.
Under Vision 2030, private companies play a central role in driving the economy of Saudi Arabia forward. Significant progress has already been made.
Private Sector Contribution to Saudi Arabia’s GDP, 2016-2030 (%)
More than 120 000 commercial registrations issued by the Saudi Ministry of Commerce in the second quarter of 2024 is another accomplishment. With such indicators business registrations see 78% annual growth as the KSA’s private sector booms.
Despite the success in meeting interim targets under Vision 2030, further initiatives will require much effort. For example, other roadmaps for the national strategy include attracting $100 billion in annual foreign direct investment (FDI) by 2030 in a bid to boost the private sector in the long run. To achieve ambitious goals, numerous programs, funds and forums fostering a supportive business environment were established, granting multiple opportunities for private companies to contribute to promising industries, hence most worth attention.
Dedicated to major actors’ expansion, Shareek helps eligible companies to accelerate planned projects and identify new opportunities. By 2040, their investments’ impact on GDP is forecasted to reach SAR466 billion ($126 billion).
One of the key initiatives under the National Industrial Strategy (NIS), released late last year, is to provide incentive packages to ensure the KSA’s leading role in intellectual property (IP) for the industrial sector and to support increased exports in targeted industries.
In an effort to develop the manufacturing of products not currently produced in Saudi Arabia and secure national resources and talent, the Standard Incentives Programme offers funding of up to 35% of the initial project investment.
Initiated in 2018, the Privatization Program identifies government assets and resources in a number of sectors for privatization (transport, health, education and municipal affairs), with the aim of improving the quality of services offered to citizens and businesses, as well as reducing costs.
1. MUSAHAMA Program enables the private sector’s growth through the Supplier Development Program, investments in talent and technology, fostering innovation and supply chain localization. The local content aspirations PIF adheres to are based on four strategic pillars:
Incorporating local content considerations in procurement practices;
Investing in developing local industries;
Supporting the competitiveness of local industries;
Engaging the ecosystem to drive pride and innovation in local materials and designs.
2. Accelerated Manufacturing Program is a targeted initiative introduced to empower emerging manufactures to develop competitive, innovative products and services and grow their businesses in the Kingdom so that a thriving ecosystem within the country could be cultivated.
Program Offers and Help
The program offers:
extensive training in business, product development and production management, as well as personalized mentorship and coaching sessions.
This will help:
to develop more competitive products, navigate growth strategies and, above all, reach out to strategic partners and experts.
By launching the Contractor programPIF endeavours to facilitate the registration process for its development companies’ projects, extend funding and enhance capacity and capability across the sector to boot. The three enablers in these programs are:
Contractor Pre-qualification Program (PQP), serving as one of the channels for registration and pre-qualification, complementing the regular tools available within each company’s system;
Contractor Engagement Program, increasing awareness of the upcoming projects, building capabilities and educating on portfolio companies’ requirements and enhancing the level of engagement of established contractors;
Contractor Financing Program (CFP), tailored to further support contractors in securing financing, enabling them to successfully participate and execute a development company’s projects.
A total of 9000 attendees participated in the second edition of the Private Sector Forum, held on February 6-7th, 2024. Acting as a bridge between PIF, its portfolio companies and the private sector, the event promotes and strengthens localization and supports the development of stable supply chains in key sectors. The next one – the Private Sector Forum 2025 – will take place on February 12-13, promising to showcase business opportunities, signal areas of potential growth for investors and suppliers and maximize the windows of cooperation.
The Real Estate Future Forum has just finished in Riyadh. Running from January 27 to 29, 2025, it gathered together industry leaders, policymakers and investors to highlight Saudi Arabia’s ongoing focus on property development, investment strategies and tourism expansion.
From September 8-10, 2025 the Kingdom will also host the Global Future Projects Forum which serves as a global platform that brings together contractors and stakeholders with more than 37 project owners from both the public and private sectors. 3000+ attendees will explore details of upcoming programs and plans of various sizes, get acquainted with the requirements and learn about the application processes.
The private sector: growth perspectives
Vision 2030 is creating favourable conditions for private businesses to expand and diversify in alignment with Saudi Arabia’s long-term strategic ambitions. Oxford Business Group uses the example of Al Othaim Investment to illustrate how a long-standing company with a strong reputation in its core sector can capitalize on the opportunities presented by the national vision to develop new avenues of corporate growth.
Although it is your choice only whether to break new ground, as long as the private sector’s role tops the agenda, the opportunities are nearly endless. However, while enjoying this fertile environment, various bureaucratic and cultural challenges should not be underestimated. Taking into consideration these specific intricacies and performing due diligence will not be superfluous.