From France to Saudi: Business Expansion Opportunities for French Firms
Saudi Arabia’s business landscape has created a robust foundation for French companies to expand and grow.
France has consistently secured its place as the Kingdom’s third-largest foreign investor. Official data showed a whopping 113% growth in French investments in the Kingdom for the year 2023 compared to the preceding year.
A vast consumer base, economic competitiveness, and an array of incentives beckon French businesses to expand operations to Saudi Arabia. This is all while benefiting from an ever-expanding, economically vital corridor between the two nations.
This article outlines the evolution of Saudi Arabia-France trade relations and potential areas for investments covering Saudi Arabia’s hotbed sectors under the context of Vision 2030.
Strong Saudi-France Economic Linkages and Investment Ties Fueled by Vision 2030 Roadmap
Saudi Arabia’s rapid economic transformation has set the stage for a broader format of economic cooperation and investment interaction. It comes as no surprise that the Saudi market proliferates with high-growth French businesses looking to tap into the $1.1 trillion market.
These investment trends represent a vote of confidence among French institutional investors in the business conditions in the Kingdom and the market’s overall bullish sentiment.
Reflecting the country's appeal for business and economic opportunities is the rapid increase in licenses being granted to French investors. As of April 2024, 433 investment licenses were issued to French companies.
Further, the continued strategic partnerships between Saudi Arabia and its French counterparts are further solidified with a myriad of MoUs.
Last year, the Saudi-French Investment Forum witnessed the signing of 24 MoUs with a total value of $2.9 billion. These MoUs are focused on exploring investment opportunities in strategic sectors such as clean energy, culture, healthcare, and tourism.
A stark illustration of deepening ties is the recent state-level visit of Saudi Finance Minister Khalid Al-Falih to France, which is expected to provide a fillip to bilateral ties in the foreseeable future. As well as acting as a trade booster, such significant endeavors will ultimately result in an upswing in targeted investments from French businesses in Saudi Arabia, as they seek to leverage unique investment opportunities to generate sustainable financial returns.
Saudi Arabia’s Construction & Technology Sectors Attract French Businesses with Regional HQs
Saudi Arabia offers a compelling value proposition for a growing number of French companies, leveraging its position as a commercial, innovation, and logistics hub.
The growth and resilience of the local economy, supported by rising investments in tourism, logistics, and manufacturing, make Saudi Arabia an ideal home to over 30 French firms with regional headquarters (HQs).
All in all, around 175 French businesses have already established operations in Saudi Arabia, creating 13,500 employment opportunities. Major companies like Air Liquide, Airbus, Alstom, Crédit Agricole, L’Oréal, Sanofi Aventis, Thales, Total, and Veolia now have global or regional head offices in the Kingdom.
Many French businesses in Saudi Arabia are concentrated in important hubs like giga projects, notably Al-Ula, led by the Royal Commission for AlUla (RCU) and the French Agency for the Development of AlUla (AFALULA).
The culture-led giga project has increasingly been attracting French firms operating within creative industries, event management, and technology.
Among them is Thales Group, a leading cybersecurity company that has recently partnered with the Royal Commission for AlUla (RCU), aiming to safeguard digital platforms against potential threats.
On a broader scale, Saudi Arabia’s reputation as a robust IT hub positions it as an attractive springboard for French key players in cybersecurity, who are actively seeking local partnerships with Saudi entities to cater to the evident demand for cyber risk management solutions, particularly amidst preparations to host major events like the 2034 FIFA World Cup and Riyadh Expo 2030.
Similarly, green construction is fast becoming a key sector of interest among French firms, helping the Saudi construction sector achieve Net-Zero emissions in line with Vision 2030 while supporting technical capacity building.
As many as 18 companies specializing in green buildings have recently unveiled plans to establish local manufacturing through joint partnerships with local entities and set up regional headquarters in the Kingdom.
Artefact's Saudi Market Expansion: Pioneering the Future of Kingdom's AI-driven Innovation
For French businesses, having Saudi Arabia as a regional headquarters represents a stepping stone to accessing a world-class talent pool and game-changing financial opportunities.
As part of its growth plans, Artefact, a global innovator in the AI and data consulting space that originated in France, has been focusing on ramping up its footprint in the Kingdom by accelerating IT infrastructure modernization for private and public agencies as well as giga projects including Al-Ula.
The Artefact Saudi expansion was facilitated by AstroLabs, the Gulf's leading business expansion platform.
Highlighting the impact of AstroLabs’ on-ground team in fast-tracking Artefact’s Saudi market entry, Rahul Arya, managing partner of Artefact MENA, added: “AstroLabs played a pivotal role in helping us build our team in Saudi Arabia. From sourcing top talent to facilitating the hiring process and assembling a skilled and dedicated workforce that aligned with our company culture and goals.”
Talent aside, French businesses with global growth aspirations require country-specific approaches to remain in compliance with regulatory frameworks, which ultimately support the company’s future business growth plans in the ever-evolving Saudi economy.
An experienced on-ground team with a deep understanding of the local landscapes can serve as the company’s navigator, allowing them to strategically capitalize on growing opportunities in various sectors through valuable insights and industry connections to ensure a successful market entry with resonating impact.
