Saudi Arabia is fast becoming a popular destination for global businesses, including European companies.
With almost $1 trillion in assets under management, Saudi Arabia stands out as a compelling destination for European firms seeking to expand their reach and tap into new markets.
The country has a lot to offer thanks to the Kingdom's ongoing efforts to strengthen cross-border collaborations and attract foreign investment. These efforts include sweeping regulatory reforms to ease business operations, such as simplifying licensing procedures, improving transparency, and offering tax incentives.
As a result, more and more European companies are finding that expanding into Saudi Arabia allows them to not only access a growing domestic market but also leverage the Kingdom’s geographical position for further expansion across the region.
This article explores potential opportunities for European companies across various sectors in Saudi Arabia.
Germany
Germany has long maintained a strong economic presence in Saudi Arabia; in 2013, it was recognized as the top employer of Saudis in the Kingdom.
Ever since the establishment of the German Saudi Arabia Liaison Office for Economic Affairs (GESALO) in 1978, there has been a steady increase in the local companies setting up operations in the Kingdom. Today, over 800 German firms operate across various sectors, from manufacturing and technology to services and consulting. Many of them operate through local partners.
In March 2023, both countries signed seven Memoranda of Understanding (MoUs) during the German-Saudi Investment Forum held in Berlin. The MoUs cover various sectors, including chemicals, waste management, renewable energy, and advanced engineering.
One area of particular focus of bilateral cooperation has been manufacturing. Germany's advanced engineering capabilities and technological innovations have complemented Saudi Arabia's abundant natural resources and ambitious development plans.
The "German-Saudi Symposium on Innovation in the Glass Industry," held in June 2024, highlighted the potential for collaboration in this sector, emphasizing the opportunities grounded in shared sustainable development goals.
France
France has emerged as a significant economic player in Saudi Arabia, with a growing number of French companies establishing operations and contributing to the Kingdom's development.
In a recent statement, the French ambassador to Saudi Arabia noted that many French companies have relocated their regional headquarters to Riyadh to capitalize on the opportunities presented by the Saudi market.
With France, Saudi Arabia signed 24 Memoranda of Understanding (MoUs) and investment agreements valued at approximately $2.9 billion in 2023. These agreements span various sectors, including clean energy, healthcare, and advanced manufacturing.
One area where French companies have made the most significant strides is in the healthcare sector. Unanime, a prominent French architecture firm, has expanded its operations in Saudi Arabia and internationally, focusing on designing state-of-the-art medical infrastructure.
Similarly, a joint venture between Saudi Arabia's SmartHealth and France's Visiomed will establish 40 healthcare centers across the Kingdom.
Other key deals include an MoU between Shurfah Holding Company and Hoffman Green Cement Technologies to produce decarbonated cement and Saudi Arabian Military Industries (SAMI)’s deal with France’s Figeac Aero to manufacture aircraft parts.
Italy
Saudi Arabia and Italy have recently intensified their bilateral relationship, marked by the signing of 21 agreements and Memoranda of Understanding (MoUs) during the Saudi-Italian Investment Forum held in Milan in September 2023. These agreements span various sectors, including clean energy, real estate, healthcare, waste management, and technology.
Key highlights include a partnership between Saudi Arabia's ACWA Power and Italy's A2A to develop green hydrogen projects across the Middle East and North Africa.
Another significant agreement involves the collaboration between Continuus-Properzi and Bahra Electric to localize the manufacture of copper and aluminum rods in Saudi Arabia.
Additionally, there was an MoU in the real estate sector between the Cipriani Group and Alkholi Holding Company to develop a luxury project in Riyadh called Casa Cipriani.
This year, the countries are discussing joint investments in many sectors, including automotive, mining, oil and gas, defense, hydrogen, and space.
Spain
The Saudi-Spanish Business Forum, held in April 2024, highlighted the growing economic ties between the two nations, with Spanish investments in Saudi Arabia surpassing $3 billion.
These collaborative efforts between Saudi Arabia and Spain have yielded positive results across various sectors, including construction, civil engineering, finance, energy, and water desalination.
One notable example of Saudi-Spanish cooperation is the partnership between Saudi Arabia's National Housing Co. and Urbas Middle East Real Estate Co. This collaboration will result in the construction of nearly 600 housing units in the Al-Fursan suburb, further enhancing the Kingdom's urban development efforts.
