Business Expansion Activity Across Saudi Arabia Sees 4X Increase Since 2018, Says AstroLabs’ 2023 Saudi Market Entry Report
AstroLabs, the leading business expansion platform in the Gulf, has released the first-of-its-kind “2023 Saudi Market Entry Report,” uncovering the opportunities and challenges companies encounter when entering and operating in Saudi Arabia, a global sought-after market destination for innovation.
With the roadmap of Saudi Vision 2030 completing its halfway mark, the Kingdom is increasingly attracting global and regional businesses seeking to leverage the first mover advantage as they expand to the market.
The report, which analyzed and collected insight from 660 high-growth companies, from a total of 50+ countries around the globe, provides a holistic view of various aspects pertaining to the business expansion processes, areas requiring post-setup assistance, hiring local talent, and the growing demand for office spaces to accommodate prospective entrants.
The report includes findings from the AstroLabs expansion network and an online survey distributed among our network of companies. The survey, conducted over three months, received 230 responses from established industry players across 37 sectors.
In terms of participant profiles, respondents to the survey are categorized into two main groups: companies exploring the Saudi market and companies with an established presence in the country. In both categories, IT and software, construction, and business consultancy rounded up as the top three sectors with the highest number of companies with a vested interest in growing their footprint in the Saudi market. This attests to the heightened demand for innovative solutions in these specific sectors to fulfill grand-scale infrastructure projects taking place across the Kingdom, contributing to achieving Saudi Vision 2030 objectives.
Amongst those that are exploring their expansion to the Saudi market, 48% of these prospective entrants plan to register their businesses within the next three to six months, reducing the time taken to enter the market from 8–12 months in 2018 to less than two months in 2024, indicating a four-fold increase in the speed at which businesses complete their market entry to the Kingdom over the period from 2018–2024.
Given Saudi Arabia’s rise as a global capital for business, half of the respondents who are exploring their expansion to the Saudi market are based outside the MENA region, with Asia, Europe, and the US constituting 43% of this total share. For most of the incoming entrants to the market, the sheer size of the Saudi market stood as the top reason motivating them to enter the market and play a pivotal role in transforming respective sectors.
Interestingly, companies expanding to Saudi Arabia had an average of four global offices at the time of market entry. Out of those businesses that are already operating in the Saudi market, including survey respondents and companies that expanded to Saudi Arabia through Astrolabs, 91% hired Saudi nationals within a timeframe of two to four months from the time of entry, while 48% hired local talent in less than a month. Moreover, 50% of the participants operating in the Kingdom said they plan to have their own offices in less than a year.
In terms of business unlockers for companies already operational in Saudi, one of the most crucial priorities remained navigating the banking process for businesses while for those that are still exploring, finding clients was a key aspect of focus.
Reflecting on the report, Chief Executive Officer of AstroLabs, Roland Daher, said: “The findings in this report are a testament to Saudi Arabia’s achievements. As a business expansion platform, our mission is to help thousands of high-growth companies not just enter the Saudi market, but settle in, operate, grow, and seamlessly connect to the fabric of the Saudi economy. We do that in partnership with the government and the private sector to maximize the integration of these businesses in building new strategic sectors and transforming existing ones, through our various programs from soft landing, to fast pilots to accelerators and innovation programs.”