Thanks to the size of its economy, Saudi Arabia is an important geopolitical player in the Middle East. It’s also Sweden’s largest export market in the region, and Swedish companies have been present in the area for more than 70 years. The Saudis are young and dynamic, with approximately 40 percent of the population younger than 35. Combined with the government’s infrastructure investments, this creates plenty of opportunities for Swedish companies to expand or enter the market.
Opportunities for Swedish companies
The largest sectors in Saudi Arabia that could be interesting for Swedish companies are energy, healthcare, manufacturing, telecom and transportation. As mentioned by Trade & Invest commissioner Niclas Carlsson in the interview below, there is a clear need for cross-sectoral expertise, due to the ongoing shift towards diversification and digitalisation of the economy. This creates opportunities within areas like cyber security, sustainable cities and sectors where Public Private Partnerships are the dominant business model.
Despite the wide range of opportunities, the ongoing significant reforms can be challenging. Most prominently, companies face obstacles in understanding the regulatory frameworks and how to develop corporate strategies that grasp the full business potential on the market. Business Sweden can offer support and advice to face these challenges. We have more than 40 years of experience in supporting companies through export information, business promotion activities and tailor-made consulting assignments.
How we can help
The Business Sweden team in Riyadh monitors and facilitates business opportunities through the United Nations and the Islamic Development Bank. In addition to Saudi Arabia, our staff in Riyadh works with our office in the United Arab Emirates to cover the majority of markets in the Middle East.
Niclas CarlssonTrade & Invest Commissioner Saudi Arabia
What are the main advantages for expansion in Saudi Arabia?
The size of the market, but also the newly implemented reforms to diversify the economy, both create great opportunities for Swedish companies. Boosted by social aspects and the dependency on oil, Saudi Arabia is investing in modernising and digitalising the market. Swedish companies are considered world leaders in several industry sectors. Given Saudi Arabia’s ambition to implement long-term and sustainable solutions, this might create opportunities for mainly medium and large Swedish companies.
What are the risks and challenges companies may face in Saudi Arabia?
Although the Saudis are used to working with international and Swedish counterparts, there are challenges, such as bureaucracy and nepotism. The bureaucratic process and commercial legislation are currently under review in Saudi Arabia. The goal is to facilitate foreign ownership and build faster and more transparent processes for registrations, certifications and customs issues. Nevertheless, the processes can still be time-consuming and difficult to navigate. In the public sector, English skills are generally very good, but in the private sector, Arabic language skills are often required.
Are there any cultural aspects to consider?
The culture in the Middle East attaches great importance to personal contacts and networks. This means that personal business relationships should be prioritised and maintained continuously. The community in Saudi Arabia is conservative and most of the population consists of practicing Muslims. Both women and men should apply the conservative dress code in business meetings. The position of women in Saudi Arabia has improved in recent years, but be aware that Saudi Arabia is still not an equal society.