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Wed Jul 10 2024Admin

Start construction business in Saudi Arabia

The construction sector in Saudi Arabia is experiencing rapid growth, making it one of the most dynamic markets globally. With the emergence of exciting new trends and the pursuit of ambitious projects, experts are forecasting that the industry will soar to a staggering USD 70.33 billion by 2024, and even further to USD 91.36 billion by 2029. The growth rate of 5.37% annually between 2024 to 2029 can be attributed to Saudi Arabia's Vision 2030 National Development Plan, which demonstrates the government's commitment to infrastructure development. Based on a recent report, it is predicted that the construction output value for all sectors in the Kingdom of Saudi Arabia will rise to $181.5 billion by the end of 2028. This presents a favorable business environment for a foreign company looking to establish a construction company in Saudi Arabia.

In this blog, we will provide you with a glimpse into the construction sector in Saudi Arabia. We will delve into the various opportunities available, highlight key points to consider, and offer guidance on setting up a construction business in the country.

Growth of the Construction Industry in Saudi Arabia

The construction sector in Saudi Arabia has experienced significant growth due to the following factors:
  •  The government's initiative and emerging trends have led to the implementation of numerous projects in Saudi Arabia that will alter the country's landscape.
  • The construction sector of the country is anticipated to experience significant growth as a result of the implementation of Ai, robotics, and 3D printing.
  •  Numerous large-scale infrastructure initiatives are currently underway, with numerous others in the planning phase.
  • The Saudi Arabian construction market is experiencing significant development, with a high compound annual growth rate (CAGR), which is attracting a greater amount of foreign investment.
  • In an effort to diversify Saudi Arabia's economy by emphasizing non-oil revenues and establishing infrastructure and facilities, Vision 2030 was initiated eight years ago. The construction industry serves as the foundation of these initiatives.
  • In 2023, construction initiatives have received more than $140 billion in funding. By 2030, the kingdom intends to achieve a population of approximately 10 million.
  • The capital city has become a focal point of attention as the nation prepares to host the FIFA World Cup in 2034 and the World Expo in 2030.

Sub-sectors of the Construction Industry

The construction industry encompasses various sectors, each specializing in different types of projects. These sub-sectors rely heavily on the decisions made by the government, investments made by various entities, and the ever-changing demands of the market. Now, we can delve into the primary sub-sectors to gain a deeper understanding of their various aspects and the investments driving their growth:
Commercial Construction
This industry includes projects including office buildings, retail stores, outdoor recreation centers, leisure and hospitality structures, and other commercial development. The government works to increase tourism in addition to making investments in leisure, hospitality, and retail spaces that will support the industry's expansion. 
Industrial Construction
There are various other initiatives in this sector, such as waste processing plants, manufacturing plants, metal and material production and processing plants, and chemical and pharmaceutical plants. The government has set its sights on decreasing the nation's reliance on energy revenues and boosting the production of electric vehicles (EVs) in order to foster growth in the sector.
Infrastructure Construction
This sector encompasses a variety of infrastructure initiatives, including rail infrastructure and road infrastructure. Dams, roads, and airport infrastructure projects will be the primary focus of investments from both the private and public sectors to facilitate the expansion of this sector. 
Energy and Utilities Construction
This sector is dedicated to projects such as electricity and power, oil and gas, telecommunications, sewage infrastructure, and water infrastructure. Investments from both public and private sectors will drive the growth of the sector from 2025 to 2028. This growth is in line with the government's target to achieve a specific capacity of renewable energy by 2030.
Institutional Construction
This sector includes initiatives such as educational buildings, healthcare buildings, institutional buildings, research facilities, and religious buildings. Growth in this sector will be stimulated by the allocation of budgets and investments in new healthcare facilities and educational institutions.
Residential Construction
Projects such as single-family housing and multi-family housing are included in the sector. By 2030, the government will implement policies that promote affordable housing and homeownership in order to stimulate the residential sector.

How to Setup a Construction Company In Saudi Arabia

If you're looking to establish a Construction Company or invest in a contracting company in Saudi Arabia, having the guidance of an expert advisor can greatly enhance your chances of success. CIG Saudi Arabia specializes in providing comprehensive assistance to help you effectively manage all aspects of your venture.  Here are the steps you need to follow to start a construction company in Saudi Arabia. The process is comparable to establishing a business in Saudi Arabia:
  •  Action Plan: Formulate an action plan and select one of the available sub-sectors. Examine their strengths, weaknesses, opportunities, and hazards in advance to prevent any significant risks.
  •  Market Research: Conduct research on the market demand and pain factors to ascertain the viability of your business.
  • Trade Name Reservation: Choose a distinctive name that adheres to the laws and regulations of Saudi Arabia. To reserve the name, register it with the Ministry of Commerce (MOC).
  • Memorandum of Association: Compose a Memorandum of Association that specifies the business's objectives, share capital, and shareholder information. Submit the document to a Saudi public notary or an authorized official for notarization.
  • Office Selection: Determine the most appropriate business location for your sub-sector and budget.
  • Acquire License: Register with other pertinent authorities and obtain the requisite licenses and permits from SAGIA.
  • Commercial Registration and Tax Card: Submit the requisite documentation and obtain a commercial registration and tax card from the MOC or SAGIA.
  • Corporate Bank Account: Establish a bank account to facilitate your transactional requirements.

CIG Saudi Arabia Help You In Setting Up Construction Business in Saudi Arabia

Starting a construction business in Saudi Arabia necessitates the consideration of several critical factors, the adherence to rules and regulations, and other responsibilities that may appear overwhelming. However, there is no need for concern, as CIG Saudi Arabia is your reliable advisor in all matters. We are a reputable business consulting firm that is dedicated to offering comprehensive assistance in order to facilitate the growth of your construction business in Saudi Arabia. Our team of professionals will provide assistance at every stage of the process, allowing you to concentrate on realizing your aspirations.


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