Saudi Tech sector drives surge in business registrations
21/01/25
Saudi Arabia recorded a remarkable 67% increase in commercial business registrations in the fourth quarter of 2024, with technology-driven companies leading the surge.
Over 160,000 new business registrations were issued during this period, bringing the total number of active commercial entities in the kingdom to over 1.6 million, according to the latest data from the Saudi Ministry of Commerce.
Notable key drivers behind this growth include the burgeoning sectors of cloud computing, application development, financial technology (fintech), tourism, entertainment and talent development. This surge is part of Saudi Arabia’s broader efforts to diversify its economy and attract foreign investment, with technology playing a pivotal role.
Most importantly, Artificial intelligence (AI) is expected to contribute significantly to Saudi Arabia's economy, projected to generate SAR 506.25 billion (USD135 billion) by 2030, equating to 12.4% of the nation’s Gross Domestic Product (GDP), according to PriceWaterhouseCoopers (PwC). Major projects like Neom are driving AI integration across industries, from transportation to governance. As a result , the Public Investment Fund’s recent focus on AI investments further underscores the sector’s potential for continued growth.
Moreover, E-commerce also saw a 10% increase compared to the previous quarter, reflecting the Kingdom's expanding digital economy. Additionally, the government’s regional headquarters initiative, launched in early 2024, mandates that international companies wishing to secure government contracts exceeding SAR 1 million (USD 260,000) must establish their regional headquarters in Riyadh. As of October 2024, 540 companies have complied, surpassing the 2030 target of 500.
Furthermore, foreign direct investment (FDI) reached SAR 18 billion (USD 4.8 billion) in Quarter 4 2024, as the Kingdom moves towards its target of attracting SAR 375 billion (USD 100 billion) in annual FDI by 2030. Additionally, the country’s Purchasing Managers' Index (PMI) registered at 58.4 in December, signaling continued economic expansion and heightened market confidence.
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