Saudi Arabia has been on the recent late been attracting many foreign businesses into their country. The Saudi Arabian market’s ability to attract investment is due to reasons such as favorable investment climate, government policies, and its strategic position. The Saudi Arabian population has high spending power because of a lot of disposable income obtained from the oil industry enabling them to spend a lot and consequently attract foreign investments (Campbell, 2008).
The Saudi Arabian government has established policies that are aimed at attracting foreign investment, low taxation, tax reliefs, and incentives are some of the incentives offered to foreign producers. The availability of other major foreign companies such as banks and insurance firms makes it easy for other foreign businesses to establish and operate in Saudi Arabia because these firms offer complementary services to each other.
Income from oil and oil royalties has left the Saudi Arabian government with a lot of surplus income in the economy. This surplus income has been plowed back into huge contracts and projects which require expertise from western foreign companies, for that reason many foreign businesses have been established in Saudi Arabia. Saudi Arabia’s strategic position in the world has enabled it to serve the Asian and African markets and therefore many foreign businesses have opted to open their regional offices in Saudi Arabia (Campbell, 2008). The proximity to Asia and Africa has served as an advantage for Saudi Arabia to attract immigrant workers who live different lifestyles and have different needs. Due to this reason, many foreign businesses have set up bases in Saudi Arabia to satisfy the needs of immigrant workers in the region.
References
Campbell, C. (2008). Legal Aspects of Doing Business in the Middle East. Chicago, IL: Lulu.
Gassler, R. (2003). Beyond profit and self-interest: economics with a broader scope. Manchester, UK: Edward Elgar Publishing.