Saudi Arabia announces record number of business licences
Figures support the government's assertion that non-oil economic activity is increasing.
Dubai: Saudi Arabia’s Ministry of Investment issued a record number of business licenses in Q1 2024 as the country seeks to attract foreign investors to support its economic expansion plans.
The ministry granted 3,157 licenses, marking a 9 per cent increase from the 2,884 licenses issued in the last quarter of 2023. In the first quarter of 2020, only 351 licenses were issued, as the policy to encourage business growth was just beginning. The construction and manufacturing sectors led the way, with 864 and 620 licenses respectively, according to data from the Saudi business portal Argaam.
These figures support the government's assertion that non-oil economic activity is increasing, despite the oil production cuts that resulted in a 0.8 per cent decrease in gross domestic product (GDP) last year. Non-oil activity constituted 50 per cent of the GDP in 2023.
The government now mandates that foreign companies establish regional headquarters in Saudi Arabia to qualify for contracts worth $270,000 (Dh991,000) or more. Despite this, foreign direct investment is not meeting government targets, adding financial pressures that have prompted reconsideration of some key giga-projects central to Saudi Arabia’s extensive economic transformation program.
In the financial sector, 21 licenses were issued. Notably, in February, investment bank Rothschild & Co opened an office in Riyadh’s King Abdullah Financial District to manage advisory services including mergers and acquisitions, debt advisory and restructuring, and private equity.