Saudi Arabia’s net FDI rose 5.6% in Q1 2024 with tourism investment leading the way along with construction, electronics, and financial service sectors, among others. The United States is the home country for 333 ongoing and announced projects; by far the leading country.
GlobalData Economist Ollie Brown provides an informative breakdown of foreign direct investment activity (FDI) in Saudi Arabia. Drawing on GlobalData’s FDI database there are 735 announced and 572 opened FDI projects in Saudi Arabia, between Q1 2019 and Q3 2024.
Notably, 32% of incoming projects are in the tourism sector.
“Tourism dominates in the FDI sector, as it accounts for 32% of incoming projects, driven by the Ministry of Tourism’s pursuit to reach 150 million tourists by 2030. Specifically, InterContinental Hotels Group (UK), Hilton Worldwide Holdings (US), Jin Jiang International Holdings (China), Marriott International (US), and Accor (France), each have 20+ active projects across Saudi Arabia.”
Tourism is followed by FDI projects in Business and Professional Services, Software and IT, Communications and Media, Electronics, Financial Services and Construction and Real Estate.
The United States is far and away the leading source for ongoing and announced FDI projects with 333 followed by the UAE at 233 and the UK at 159. China is the home country for 45 FDI projects.
“As conflict proliferates across the Middle East, and the US mounts pressure on Saudi Arabia to mediate relations between Israel, Palestine, Iran and Lebanon, this ability to prioritize economic objectives may wane. For instance, a step towards Israel could deter Russian, Chinese, and Turkish investment. Similarly, public sympathy with Iran – whom Saudi Arabia only recently revitalized diplomatic relations with – could deter investment from westward nations. To date, Saudi Arabia has navigated this fragile dynamic remarkedly well. However, the future for Saudi Arabian FDI hinges on whether diplomats can continue leveraging strong international politico-economic relations, attracting business, whilst simultaneously distancing themselves from geopolitical tensions.”
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