Saudi Industrial Investments Surge 54% After Expat Fee Waiver

Saudi Arabia’s industrial sector has recorded a 54% surge in investments, reaching SAR 1.5 trillion in 2024 compared to SAR 992 billion in 2019, following the government’s waiver of fees for expatriate workers in the industrial sector. The landmark initiative, introduced in 2019 and extended until the end of 2025, has significantly boosted the Kingdom’s industrial growth, according to a report by the Federation of Saudi Chambers’ economic-affairs department.

Context and Background

The expatriate fee waiver for industrial workers was launched as part of Saudi Arabia’s broader efforts to stimulate industrial investment and diversify the economy under Vision 2030. The policy aims to reduce operational costs for manufacturers, attract foreign direct investment, and create jobs for Saudi nationals. According to the report, the waiver has benefited more than 8,000 establishments at an estimated cost of SAR 5 billion, underscoring the government’s commitment to industrial development.

Key Details

The report highlights impressive gains across seven key indicators: GDP contribution, number of industrial establishments, investment volume, employment, non-oil exports, product quality, and foreign investment. The industrial sector’s GDP contribution rose to SAR 592 billion in 2023, up from SAR 392 billion in 2019, representing 14.7% of GDP. The number of industrial establishments increased by 55.6%, from 7,625 in 2019 to 11,868 in 2024. Foreign investments surged, with foreign factories increasing by 71.5% to 1,067, and foreign capital investments growing by 116.2% to SAR 93 billion. Employment also saw significant growth, with 1.2 million workers in the sector by Q1 2024, including 358,000 Saudis, reflecting a localization rate of 28%.

Implications and Impact

The surge in industrial investments has far-reaching implications for Saudi Arabia’s economy and its international standing. Non-oil exports rose by 12% to SAR 208 billion in 2023, driven by expanded market access and trade agreements. The sector became the largest creator of jobs for Saudis, providing over 82,000 jobs from January 2023 to March 2024, contributing 59% of private-sector job creation. The fee waiver has also enhanced product quality through technology adoption and innovation, boosting domestic demand and exports. These developments reinforce Saudi Arabia’s position as a leading industrial hub and a key player in global supply chains.

Vision 2030 Alignment

This industrial growth is directly aligned with Vision 2030’s goal of diversifying the economy away from oil dependence. By fostering a competitive industrial sector, Saudi Arabia is creating sustainable jobs, attracting foreign investment, and increasing non-oil exports. The extension of the fee waiver until 2025 signals continued support for industrial transformation, positioning the Kingdom as a global industrial powerhouse and a model for economic diversification in the region.

20 Questions

Q1. What was the investment figure for the Saudi industrial sector in 2019?

A1. In 2019, investments in the Saudi industrial sector stood at SAR 992 billion, according to the Federation of Saudi Chambers’ report. This baseline highlights the significant growth that followed the introduction of the expatriate fee waiver and other supportive measures under Vision 2030.

Q2. How much did industrial investments increase by 2024?

A2. By 2024, industrial investments reached SAR 1.5 trillion, representing a 54% increase from 2019. This surge underscores the effectiveness of the fee waiver and other government incentives in attracting capital and expanding the industrial base.

Q3. When was the expatriate fee waiver introduced and until when is it extended?

A3. The waiver on fees for expatriate workers in the industrial sector was introduced in 2019 and has been extended until the end of 2025. This extension provides continued relief to industrial establishments and supports long-term planning.

Q4. Which entity released the report on industrial investments?

A4. The report was released by the Federation of Saudi Chambers’ economic-affairs department. It analyzes the impact of the fee waiver and tracks the industrial sector’s performance across seven key indicators from 2019 to 2024.

Q5. What are the seven key indicators highlighted in the report?

A5. The report focuses on GDP contribution, number of industrial establishments, investment volume, employment, non-oil exports, product quality, and foreign investment in industry. These indicators provide a comprehensive view of the sector’s growth.

Q6. How did the industrial sector’s GDP contribution change from 2019 to 2023?

A6. The industrial sector’s GDP contribution rose from SAR 392 billion in 2019 to SAR 592 billion in 2023, reaching 14.7% of GDP. This growth reflects the sector’s expanding role in the national economy.

Q7. How many industrial establishments existed in 2024 compared to 2019?

A7. The number of industrial establishments increased by 55.6%, from 7,625 in 2019 to 11,868 in 2024. This expansion demonstrates the sector’s growing capacity and attractiveness to investors.

Q8. What was the growth in foreign factories in the industrial sector?

A8. The number of foreign factories increased by 71.5%, reaching 1,067 in 2024 from 662 in 2019. This growth highlights Saudi Arabia’s appeal as a destination for foreign industrial investment.

Q9. How much did foreign capital investments grow in the industrial sector?

A9. Foreign capital investments grew by 116.2%, reaching SAR 93 billion in 2024, up from SAR 43 billion in 2019. This significant increase reflects confidence in the Kingdom’s industrial policies.

Q10. How many workers were employed in the industrial sector by Q1 2024?

A10. By the end of the first quarter of 2024, the industrial sector employed 1.2 million workers, including 358,000 Saudis. This indicates the sector’s role in job creation and localization.

Q11. What was the localization rate in the industrial sector?

A11. The localization rate in the industrial sector reached 28%, with Saudis representing 12.9% of the total Saudi private-sector workforce. This aligns with Vision 2030’s goal of increasing Saudi employment.

Q12. How many jobs did the industrial sector create for Saudis from January 2023 to March 2024?

A12. The industrial sector created over 82,000 jobs for Saudis during this period, contributing 59% of the jobs created by the private sector. This makes industry the largest job creator for Saudi nationals.

Q13. What was the value of non-oil exports in 2023?

A13. Non-oil exports reached SAR 208 billion in 2023, a 12% increase driven by market expansion and trade agreements. This growth supports economic diversification and reduces reliance on oil revenues.

Q14. How did the fee waiver impact product quality?

A14. The fee waiver enabled industrial establishments to adopt modern technologies, localize innovations, attract talent, and increase product quality. This led to higher domestic demand and more Saudi Quality Mark certifications from SASO.

Q15. What is the Saudi Quality Mark certification?

A15. The Saudi Quality Mark is issued by the Saudi Standards, Metrology and Quality Organization (SASO) to products that meet high-quality standards. Its increase reflects improved product quality in the industrial sector.

Q16. How many establishments benefited from the fee waiver?

A16. More than 8,000 establishments benefited from the expatriate fee waiver, at an estimated cost of around SAR 5 billion. This investment has yielded substantial returns in terms of growth and job creation.

Q17. What was the local content in non-oil sectors in 2023?

A17. Local content in non-oil sectors reached SAR 1,138 billion in 2023. This figure reflects the government’s success in promoting domestic production and reducing imports.

Q18. How does the fee waiver support foreign investment?

A18. The fee waiver reduces operational costs for foreign investors, making Saudi Arabia a more attractive destination. Combined with local content regulations and the preference list, it has led to a 116.2% increase in foreign capital investments.

Q19. What role did government incentives play in job localization?

A19. Government incentives, including the fee waiver, encouraged private-sector localization and created industrial job opportunities for Saudis. From 2023 to 2024, industry provided over 82,000 Saudi jobs, contributing 59% of private-sector job creation.

Q20. How does this industrial growth align with Vision 2030?

A20. The industrial growth aligns with Vision 2030 by diversifying the economy, boosting non-oil exports, attracting foreign investment, and creating sustainable jobs for Saudis. It showcases the Kingdom’s progress toward becoming a global industrial leader.

Reader Feedback

We value your thoughts. Please share your feedback on this article.

Name *

Message *

Your feedback helps us improve our coverage.