Charting Saudi Arabia’s Rise as an SMEs Hub - In recent years, Saudi Arabia has strategically focused on diversifying its economy.

In recent years, Saudi Arabia has strategically focused on diversifying its economy and attracting international businesses, startups, and investors, leading to significant and lasting change.
Earlier this year, the Kingdom ranked third in the 2023-2024 Global Entrepreneurship Monitor report. Meanwhile, its National Entrepreneurship Context Index score has increased from 5.0 in 2019 to 6.3 in 2023, reflecting its progress in fostering a vibrant entrepreneurial ecosystem that drives economic growth.

Home to a diverse talent pool and a youthful population — with approximately 63% of Saudis under the age of 30 — today, some of the world’s most gifted entrepreneurs and promising changemakers call Saudi Arabia home.

The Saudi authorities' efforts to cultivate a supportive business environment for SMEs innovation have included investment in a favorable regulatory landscape, leveraging the Kingdom’s strategic location to develop a sophisticated SMEs ecosystem.

Crucially, the National Investment Strategy (NIS) has been established, as part of the Kingdom’s transformation plan, to drive the growth and diversification of the national economy. NIS aims to increase the private sector's contribution to GDP to 65%, raising the contribution of Foreign Direct Investment (FDI) to GDP to 5.7%, by 2030.

To attract FDI to the Kingdom, the government has set up special economic zones with competitive regulations and incentives to attract investments in priority sectors — including King Abdullah Economic City (KAEC) — along with new financing solutions for the private sector to promote capital formation. KAEC is prominently featured as a key component of Vision 2030, which emphasises the development of economic zones. It has announced a comprehensive plan valued at 8.7 billion Saudi riyals to implement long-term growth initiatives aligned with Vision 2030.

In this dynamic landscape, entities such as the Small and Medium Enterprises General Authority, Monsha'at, continue to advance the Saudi SME market, catering to local and international startups' needs in line with Vision 2030 and the NIS. Monsha’at has played a pivotal role in strengthening ties with overseas markets, creating new avenues of opportunity for Saudi enterprises to expand, grow, and succeed abroad. According to Monsha’at’s Franchise Report, the Kingdom of Saudi Arabia has reached a significant milestone with over 380 national franchises and more than 1,000 registered trademarks.