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Saudi Arabia Aims for $100 Billion in FDI by 2030 Amid Regulatory Improvements

Saudi Arabia aims for $100 billion FDI by 2030, focusing on regulatory reforms and mega projects to diversify economy away from oil.

By Athena Xu

5/15, 04:30 EDT

Key Takeaway

  • Saudi Arabia aims to attract $100 billion in FDI by 2030 to support economic diversification, highlighting the need for regulatory improvements.
  • The kingdom is advancing mega projects like Neom and The Line as part of Vision 2030, despite facing challenges in supply chains and labor.
  • Global firms, including General Atlantic with $400 million invested, are expanding in the Middle East, drawn by favorable policies and market potential.

FDI in Saudi Arabia's Future

Saudi Arabia is on a path to attract more foreign direct investment (FDI) to fuel Crown Prince Mohammed bin Salman's economic diversification efforts away from oil. May Nasrallah of deNovo Corporate Advisors, a boutique firm, emphasized the kingdom's commitment to enhancing its investment landscape despite current challenges. The nation aims to draw $100 billion of overseas money by 2030, a goal that appears ambitious given the current perception of Saudi Arabia as a high-risk investment location. Nasrallah highlighted the need for more regulation, openness, and clarity, particularly around bankruptcy law, to encourage greater international capital inflow.

Mega Projects and Investment Drive

Saudi Arabia is actively seeking partners and investors for its so-called giga projects, such as Neom, Qiddiya, The Line, New Murabba, and Diriyah Company. These projects are central to the Crown Prince's Vision 2030, aiming to transform the economy by creating a hub for entertainment, tourism, and manufacturing. Despite showcasing construction achievements and progress, officials acknowledge the challenges of supply chains, costs, and skilled labor shortages. The kingdom's efforts to ease the investment process through regulatory changes are ongoing, with a focus on overcoming the "issue of perception" and "issue of practicality" that currently hampers capital inflow.

Global Firms Eyeing the Middle East

General Atlantic, a New York-based investment firm, plans to open offices in the Middle East, signaling a growing interest among global investors in the region. The firm, which has been active in the Gulf for over a decade, sees significant opportunities amid long-term changes affecting the world and the region. With $400 million already deployed in Middle Eastern firms, General Atlantic's move reflects a broader trend of investment firms like TPG Capital, Ardian SAS, and CVC Capital Partners strengthening their presence in the cash-rich region. This interest is supported by encouraging government policies, stable political dynamics, and the formation of capital markets in countries like Qatar, Saudi Arabia, and the United Arab Emirates.

Street Views

  • May Nasrallah, deNovo Corporate Advisors (Neutral on Saudi Arabia's FDI prospects):

    "It’s only a matter of time before Saudi Arabia starts attracting more foreign direct investment to support Crown Prince Mohammed bin Salman’s economic diversification drive... More regulation, openness and clarity on rules around bankruptcy law, for example, are needed to draw in greater sums of international capital."