Saudis touting Riyadh as key hub for business in the Gulf

RIYADH, Saudi Arabia — At Dubai’s international airport, travelers can pick up a free guide to the city’s top attractions and events. Curiously, the cover of this month’s “Time Out -DXB” beckons visitors to Saudi Arabia. Emblazoned with an image of the kingdom’s ancient Diriyah fort near the Saudi capital, it reads: “Welcome to Arabia. A Journey You’ve Never Imagined”.

The landlocked, once ultraconservative capital of Riyadh is pitching itself as a city where concerts, movie theaters, worldclass sporting events and deal-making are in abundance.

The pitch is part of Saudi Arabia’s plan to grab the limelight and title as the region’s top place to do business. Currently, the more glamorous emirate of Dubai is seen as the region’s hub for finance and tourism.

There are incentives — or, some say, penalties — for businesses to consider:

Saudi Arabia has told companies they have until the beginning of 2024 to relocate their regional headquarters to the country or lose out on lucrative government contracts that keep the region’s biggest economy humming.

It’s the latest move by Crown Prince Mohammed bin Salman, the kingdom’s day-to-day leader, who’s been empowered by his father, King Salman, to overhaul the economy and reduce its dependence on oil for revenue.

Some investors and their shareholders, however, remain wary of the 36-yearold prince. Four years ago — at the same Ritz-Carlton hotel where a key investment forum took place last week and where 44 multinational companies announced their plans to establish regional headquarters in Riyadh — Prince Mohammed oversaw the unprecedented detention of Saudi business leaders, princes and officers in a purported anti-corruption sweep.

The campaign, described by critics as a shakedown, largely took place outside of the courts and public view. It netted the kingdom more than $100 billion in assets and cash, according to the government. It also cemented the crown prince’s grip on power.

Saudi Investment Minister Khalid al-Falih said a move by companies to Riyadh is a “win-win.”

“It’s important for us, but it’s even more important for the companies because they will get the benefits of being closer to decision makers,” he said.

The government hopes the “Regional Headquarters Attraction Program” will add $18 billion to the local economy and create 30,000 new jobs over the next decade.

Creating jobs and diversifying the economy sit at the heart of Prince Mohammed’s Vision 2030 blueprint for transforming the country. He is set to inherit a nation where over a third of the population is under 14, and more than 60% are under 35.

Some investors remain concerned about doing business in the kingdom, said Ayham Kamel, head of the Middle East division at

Eurasia Group, a political risk consultancy that advises companies. He said there is little clarity on tax incentives for businesses that will relocate or whether they will need to adhere to a Saudi hiring quota. The investment minister said the kingdom is working on clear answers.

“To be honest, we had challenges the first five years because our regulations were not ready,” al-Falih said.

Al-Falih said Saudi Arabia wants to be seen as a safe place to do business. He said the self-declared anti-corruption campaign should be seen as a positive sign that the kingdom is “starting a new page” where foreign investors can find a “level playing field.”

Investors remain tepid about Saudi Arabia, though the figures are improving. Foreign direct investment to the kingdom plummeted to $1.42 billion in 2017.

Last year, foreign direct investment climbed to $4.6 billion, but that’s still less than in 2016 when it stood at $7.5 billion.