Saudi Arabia launched a new business park in Riyadh this week, backed by more than SAR1 billion ($270,000) in funding, to stimulate foreign investment and local job creation.
The Boulevard Business Park is located in Riyadh’s Boulevard district which was recently host to the first e-sports ‘World Cup’, adding 60,000 square meters to the city’s office space.
Riyadh already has a financial district, a business zone near the airport, and a technology park. However, the kingdom is still struggling to attract foreign direct investment which lags far beyond a 2030 goal of $100 billion per year.
The government has created a series of special zones including business parks offering tax incentives and a simplified regulatory environment to attract international enterprises and investment.
The number of companies setting up headquarters in Saudi Arabia slowed sharply in the second quarter of 2024, after a rush to Riyadh at the start of the year, official statistics issued this week showed.
The government is pushing foreign companies to set up offices to ensure access to contracts. They include dozens of projects managed by subsidiaries of the Public Investment Fund as part of the kingdom’s Vision 2030 economic reforms.
But weakening demand in Saudi Arabia’s commercial sector suggests the market could be reaching a plateau, a report by the UK’s Royal Institution of Chartered Surveyors (Rics) said last month.
It found that demand for space rose by only 20 percent in the second quarter of 2024, compared with a 53 percent rise in Q1.
The government has also introduced a new commercial code to ease judicial processes for foreign businesses and is trying to reduce red tape.
Despite the teething problems, Saudi Arabia has become the region’s center for venture capital, with funding for small companies from banks, financial institutions, and venture capitalists up 159 percent to $2.36 billion in 2023.
