Saudi Arabia’s construction sector is one of the fastest-growing markets worldwide. With new trends and ambitious projects, the industry is predicted to reach up to USD 70.33 billion in 2024 and projected to reach USD 91.36 billion by 2029. This growth rate of 5.37% annually between 2024 to 2029 is due to Saudi Arabia’s Vision 2030 National Development Plan, which reflects the government’s interest in developing the infrastructure. According to a recent report, the Kingdom of Saudi Arabia’s construction output value for all sectors is predicted to rise to $181.5 billion by the end of 2028 providing a favorable business environment for a foreign company to set up a construction company in Saudi Arabia.
Through this blog, we aim to give you an insight into the construction sector in Saudi Arabia by exploring opportunities, key points and how to set up a construction business in Saudi Arabia.
Growth of the Construction Industry in Saudi Arabia
Here are some of the key factors behind the expansion of the construction sector in Saudi Arabia:
- Saudi Arabia has undertaken many projects that will change the landscape of the country through the government’s initiative and emerging trends.
- The use of Ai, robotics, and 3D printing is expected to play a huge role in the development of the construction sector of the country.
- Currently, many large-scale infrastructure projects are in progress with many in the planning stage.
- The Saudi Arabian construction market is showing tremendous growth with a good CAGR which invites in more foreign investment.
- Vision 2030 started eight years ago as part of diversifying Saudi Arabia’s economy by focusing on non-oil revenues and setting up infrastructure and facilities for that, the construction industry becomes the cornerstone of these initiatives.
- Over $140 billion has been granted to construction projects in 2023. The kingdom plans to reach a population of around 10 million by 2030.
- The capital city has become a focus of attention as the country prepares to host the World Expo in 2030 and the FIFA World Cup in 2034,
Sub-sectors of the Construction Industry
The construction industry involves several sectors with each focusing on different types of projects. These sub-sectors depend on government policies, investments and market demands. Let’s explore the main sub-sectors to get an insight into its different aspects and understand the investments fueling their development:
Commercial Construction
This sector encompasses projects such as leisure and hospitality buildings, office buildings, outdoor leisure facilities, retail buildings, and other commercial construction. The government strives to boost tourism, along with investments in leisure, hospitality and retail buildings that will further the growth of the sector.
Industrial Construction
This sector’s projects include chemical and pharmaceutical plants, manufacturing plants, metal and material production and processing plants, and waste processing plants. The government plans to minimize the country’s reliance on oil revenues and boost EV production to fuel growth of the sector.
Infrastructure Construction
This sector covers projects such as rail infrastructure, road infrastructure, and other infrastructure projects. Investments from both the private and public sector will be focused on dams, road, and airport infrastructure projects to support the growth of this sector.
Energy and Utilities Construction
This sector focuses on projects like electricity and power, oil and gas, telecommunications, sewage infrastructure, and water infrastructure. The growth of the sector from 2025 to 2028 will be fueled by investments from both public and private sectors to meet the government’s target to reach a certain capacity of renewable energy by 2030.
Institutional Construction
This sector comprises of projects such as educational buildings, healthcare buildings, institutional buildings, research facilities, and religious buildings. Allocation of budgets along with investments in new healthcare facilities and educational institutions will drive the growth of this sector.
Residential Construction
The sector includes projects such as single-family housing and multi-family housing. The government policies will provide affordable housing and homeownership to increase the growth of the residential sector by 2030.
How to Setup a Construction Company In Saudi Arabia
To set up a Construction Company in Saudi Arabia or invest in contracting company in Saudi Arabia, an expert advisor is highly beneficial for better results, and Analytix can help you effectively manage everything with ease.
Let’s briefly take a note of the steps needed to follow to start a construction company in Saudi Arabia. The process is similar to the that of setting up a business in Saudi Arabia:
- Action Plan: Develop an action plan and choose between the sub-sectors available. Analyze their strengths, weakness, opportunities and threats beforehand to avoid any huge risk.
- Market Research: Do research on the market demand and pain points to determine the viability of your business.
- Reserve Trade Name: Select a unique name that complies with the rules and regulations of Saudi Arabia and to reserve it, register it with the Ministry of Commerce (MOC).
- Memorandum of Association: Draft a Memorandum of Association that includes the business’s objectives, share capital, and shareholder details and get it notarized with a Saudi public notary or an authorized official.
- Choose Office: Select a suitable business location depending upon sub-sector and budget.
- Obtain License: Obtain the necessary licenses and permits from SAGIA and register with other relevant authorities.
- Commercial Registration and Tax Card: Submit necessary documents and obtain Commercial registration and Tax card from the MOC or SAGIA.
- Corporate Bank Account: Open a bank account to manage your transactional needs.
Analytix Help You In Setting Up Construction Business in Saudi Arabia
Starting your construction business in Saudi Arabia involves considering some important factors, following rules and regulations, and other aspects to be taken care of which might seem too much to take on, but don’t your worry, Analytix is your trusted advisor in everything.
As a trusted business consulting firm, we focus on providing complete support for your construction business to bloom in Saudi Arabia. Our expert team of professionals will help throughout every single step of the way, so that you can focus on fulfilling your dream.
Conclusion
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