Saudi Arabia’s premium residency visa opens market to expats and investors

Saudi Arabia’s premium residency visa option will also compel developers to expand their portfolios by including more premium residential projects, thus transforming the urban landscape of major cities in the Kingdom including Riyadh, Jeddah and Dammam. (Shutterstock)
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Updated 06 April 2024
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Saudi Arabia’s premium residency visa opens market to expats and investors

  • Initiative is a pivotal shift in KSA’s approach to property ownership by non-Saudis: Knight Frank

RIYADH: New additions to the premium residency visa options by the Saudi government this year could open the Kingdom’s market to affluent expatriates and investors, a survey said. 

According to the report released by real estate consultancy Knight Frank, this initiative is a pivotal shift in the Kingdom’s approach to residency and property ownership by non-Saudis and is expected to have substantial implications for the demand dynamics of residential properties.

The premium visa residency option, launched in 2019, aims to allow eligible foreigners to live in the Kingdom and receive benefits such as exemption from paying expat and dependents fees, visa-free international travel, and the right to own real estate and run a business without requiring a sponsor.

To attract more foreign talents and to diversify the economy, the Kingdom added five new products to its premium residency program in January 2024. 

Under the new addition, the most noted one was the privilege to own residential real estate assets worth a minimum of SR4 million ($1.07 million) within the Kingdom. 

“The threshold of SR4 million is set to ensure that the investments are significant, likely leading to an influx of high-value transactions in the real estate market. This could potentially increase the demand for luxury and high-end residential properties, driving up property values in these segments,” said Knight Frank in the report. 

According to the UK-based consultancy, Saudi Arabia’s premium residency visa option will also compel developers to expand their portfolios by including more premium residential projects, thus transforming the urban landscape of major cities in the Kingdom including Riyadh, Jeddah and Dammam. 

“The introduction of this new visa scheme, however, signifies a strategic opening of the market to international investors and affluent expatriates seeking long-term residency options,” said Talal Raqqaban, partner, valuation, PPP and deal advisory at Knight Frank.

Demand for branded residences drives growth

According to the consulting firm, the demand for branded residencies in Saudi Arabia is driving the growth of the real estate sector in the Kingdom. 

The report revealed that Saudi Arabia is witnessing significant investments in these residential offerings, and added that the Kingdom is one of the most exciting new markets globally. 

The introduction of this new visa scheme signifies a strategic opening of the market to international investors and affluent expatriates seeking long-term residency options.

Talal Raqqaban Partner, valuation, PPP and deal advisory at Knight Frankç

Knight Frank said that the growing number of high-net-worth individuals in Saudi Arabia is likely to help bolster demand for branded residences. 

The number of HNWI in the Kingdom rose from 122,784 to 134,539 between 2022 and 2023, the report added. 

“The unique and exclusive nature of branded residences only adds to their allure. Moreover, the assurance of quality service and maintenance by the associated brands makes these investments particularly attractive and all but assures asset value appreciation,” said Mohamad Itani, partner, residential sales and marketing projects at Knight Frank. 

The report added that international appetite for branded residences in the Kingdom has recently received a shot in the arm with the introduction of the new property ownership-linked premium residency visas. 

“With a minimum threshold of SR4 million to qualify, demand for homes in the Kingdom is expected to rise as a result, noting that the property needs to be owned outright, with no debt against it, to receive the premium residency,” Knight Frank said in the report.

NEOM emerges as Saudi expats’ most preferred giga-project

The real estate consultancy revealed that Saudi Arabia’s $500-billion mega project NEOM is the most preferred residential destination among expats, with 29 percent of the surveyed participants wishing to buy a home in this sustainable city. 

This was closely followed by Jeddah Central at 15 percent and King Salman Park at 8 percent, the report added. 

The assurance of quality service and maintenance by the associated brands makes investments particularly attractive and all but assures asset value appreciation.

Mohamad Itani Partner, residential sales and marketing projects at Knight Frank

Of those interested in NEOM, 42 percent are interested in The Line, while 19 percent of the participants want to have a home on Sindalah Island.

“Saudi Arabia’s giga-projects represent some of the most ambitious construction ever undertaken and it stands to reason that these new city-sized developments continue to captivate prospective buyers,” said Faisal Durrani, partner, head of research for Knight Frank in the Middle East and North Africa region. 

He added: “NEOM has consistently ranked as the most preferred location for Saudi’s eyeing up future home purchases in the Kingdom’s Giga projects and it appears that expats too have been wooed by the planned ultra-futuristic offerings at the Belgium-sized $500 billion super-city.” 

Some 82 percent of the 241 expatriates who took part in the survey said that they are ready to spend under SR3.75 million to own a home in NEOM. 

“(Some) 32 percent say they will look to spend under SR750,000, which may cause challenges for developers as Knight Frank expects that the bulk of stock in the giga-projects will be priced north of $ 1 million,” the report added. 

FASTFACTS

• The premium visa residency option, launched in 2019, aims to allow eligible foreigners to live in the Kingdom and receive benefits such as exemption from paying expat and dependents fees.

• According to the consulting firm, the demand for branded residencies in Saudi Arabia is driving the growth of the real estate sector in the Kingdom.

On a positive note, 41 percent of the participants revealed that they were still interested in making a purchase in the giga-project and were also willing to reconsider their budget. 

Overall, the average expat budget for a home in a giga-project stands at SR2.7 million, nearly 58.8 percent higher than for elsewhere in the Kingdom. 

According to the report, millennial expats aged below 35 claim to have the deepest pockets, with average budgets of SR4.3 million, nearly twice compared to people aged between 45 to 55 whose budgets stand at SR1.5 million. 

“High-earning expats are eager to own property in the Kingdom’s giga-projects and the fact that high earners are prepared to spend more on giga-project homes will be welcome news for developers, but the key will be to offer distinctive community features and amenities that go above and beyond. Open spaces and having a park view, for instance, top expats’ wish lists,” said Itani.


Saudi Arabia set to welcome 300 millionaires in 2024: Henley & Partners

Updated 19 June 2024
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Saudi Arabia set to welcome 300 millionaires in 2024: Henley & Partners

RIYADH: As many as 300 millionaires will flock to Saudi Arabia in 2024 as the Kingdom continues to attract high-net-worth individuals, according to a study. 

In its latest report, Henley & Partners said that Saudi Arabia’s capital Riyadh as well as Jeddah are becoming “increasingly popular” with immigrant millionaires,especially from North Africa and the Middle East. 

“In our view, these two cities have the potential to mimic Dubai and Abu Dhabi in attracting large numbers of wealthy expats in the future,” said the British consultancy firm in the release. 

According to the analysis, the UAE is continuing its run as the top destination of choice for HNWI, with an estimated 6,700 millionaires expected to make the country their home by the end of 2024.

“For the third year running, the UAE looks set to take first place as the world’s leading wealth magnet, with a record-breaking 6,700 moneyed migrants expected to make the Emirates home by the end of the year, significantly boosted by large inflows from the UK and Europe,” said the British consultancy. 

According to the report, the UAE’s tax-free income, golden visa residency program, and geographic location have made it a favorite destination for migrating millionaires. 

The Group Head of Private Clients at Henley & Partners, Dominic Volek, said that 2024 is shaping up to be a watershed moment in the global migration of wealth. 

“An unprecedented 128,000 millionaires are expected to relocate worldwide this year, eclipsing the previous record of 120,000 set in 2023. As the world grapples with a perfect storm of geopolitical tensions, economic uncertainty, and social upheaval, millionaires are voting with their feet in record numbers,” said Volek. 

He added: “In many respects, this great millionaire migration is a leading indicator, signaling a profound shift in the global landscape and the tectonic plates of wealth and power, with far-reaching implications for the future trajectory of the nations they leave behind or those which they make their new home.” 

The UAE is followed by the US and Singapore, with 3,800 and 3,500 millionaires set to live in these countries by the end of this year. 

Canada grabbed fourth place in the list, with a projected 3,200 HNWI flocking to the country, followed by Australia and Italy with 2,500 and 2,200 millionaires coming to these nations, respectively. 

Switzerland came in the sixth spot in the list, with an estimated 1,500 millionaires relocating to the country, followed by Greece and Portugal at 1,200 and 800, respectively. 

The report highlighted that the UK is expected to see an unprecedented net loss of 9,500 millionaires in 2024 — second only to China worldwide and more than double the 4,200 who left the country last year. 

According to the analysis, China is expected to be the biggest millionaire loser globally, with an anticipated net exit of 15,200 HNWIs this year, compared to 13,800 in 2023.


Egypt’s exports surge 9.8% to $16.55bn amid global trade expansion

Updated 19 June 2024
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Egypt’s exports surge 9.8% to $16.55bn amid global trade expansion

RIYADH: Egypt’s merchandise exports soared by 9.8 percent year-on-year in the first five months of 2024 to reach $16.55 billion, according to a top official.     

Exports increased every month over the period, underscoring the north African country’s ongoing expansion in global trade, according to Egypt’s Minister of Trade and Industry Ahmed Samir.   

Notable items that contributed to the growth included fresh and dried citrus fruits valued at $721 million, wires at $353 million, and manufactured petroleum oils at $186 million.      

Key export sectors also included building materials, valued at $3.86 billion, the food industry at $2.64 billion, and chemical products and fertilizers estimated at $2.49 billion.   

Agricultural crops were worth $2.26 billion, according to a statement.   

The ministry aims to bolster exports across all sectors to diverse global markets in the coming phase, emphasizing collaboration between government entities, business communities, and Egyptian exporters to enhance product quality and competitiveness. 

This effort supports Egypt’s target of achieving $100 billion in annual merchandise exports.   

Moreover, the statement revealed that Saudi Arabia emerged as the top market for Egyptian merchandise exports during this period, totaling $1.39 billion. 

Following Saudi Arabia, Turkiye accounted for $1.31 billion, the UAE at $1.13 billion, Italy with $974 million, and the US at $904 million.   

In May, Egypt’s Central Agency for Public Mobilization and Statistics revealed that the value of Egyptian exports to Arab countries surged 8.7 percent year-on-year, reaching $13.6 billion in 2023. 

Saudi Arabia led among Arab nations in importing from Egypt, with exports totaling $2.7 billion during the year, according to the statement issued last month. 

This trend underscores the substantial growth in trade relations, partnerships, joint projects, and development investments between the two countries in recent years.     

Last month, the International Monetary Fund projected that Egypt’s foreign cash inflows would come from five sources, including commodity exports, tourism and Suez Canal revenues, as well as private transfers and net foreign direct investment.      

The fiscal year 2023-2024 total will be around $107.3 billion, compared to about $93.6 billion in 2022-2023.      

However, the IMF anticipates inflows to decrease again in the next fiscal year, dropping below the previous year’s level to approximately $91.2 billion. 


King Abdulaziz Port boosts infrastructure with new cranes, enhancing global maritime hub status

Updated 19 June 2024
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King Abdulaziz Port boosts infrastructure with new cranes, enhancing global maritime hub status

RIYADH: Saudi Arabia’s King Abdulaziz Port’s crane capacity has been boosted by 9.7 percent as part of an SR7 billion ($1.86 billion) investment deal.

The facility, operated by Saudi Global Ports Co., has received three automated quay and three rubber-tired gantry cranes, increasing its handling infrastructure.

According to a press release from Saudi Ports Authority, also known as Mawani, this addition brings the total number of quay cranes to 18 and gantry cranes to 50, enhancing the Dammam port’s workflow and enabling it to handle large ships efficiently.

These enhancements are made under commercial contracts between Mawani and Saudi Global Ports Co. 

This development is part of ongoing efforts to strengthen King Abdulaziz Port’s position as a competitive and sustainable global hub.

The new cranes can reach a minimum of 25 rows, which facilitates the efficient handling of advanced and large ships. 

Additionally, the use of modern cranes contributes to improving the skills of the workforce, supporting the Saudi ports system and solidifying the Kingdom’s growing role in the global logistics chain.

This upgrade aligns with the goals of the National Transport and Logistics Strategy, which aims to establish the nation as a global logistics center and a key link between continents.

Saudi ports are experiencing a constant surge in handling shipments. In March, terminals in the Kingdom recorded a 12.48 percent increase in the number of received containers compared to the same period last year, according to official data from Mawani.

The Authority disclosed that terminals in Saudi Arabia received 265,148 standard containers in the third month of 2024, marking an annual increase from 235,738.  

Furthermore, the maritime facilities experienced a 3.77 percent uptick in the volume of handled tonnage, reaching 19.64 million tonnes, in contrast to 18.93 million tonnes recorded in March 2023.    

“This reflects the scale of efforts made to develop port infrastructure and provide the highest levels of logistics services,” Mawani stated in a statement.

The Kingdom’s general shipment volumes reached 804,837 tonnes, solid bulk cargo reached 3.94 million tonnes, and liquid bulk freight reached 14.74 million tonnes.

A report from the UN Conference on Trade and Development revealed that Mawani climbed from 76.16 points in the second quarter of 2023 to 77.66 points in the third quarter of last year, affirming Saudi Arabia’s progress in the maritime sector.

Moreover, the Kingdom has consistently pursued global collaborations in the maritime sector, the latest of which occurred at the second edition of Vision Golfe 2024, held in Paris on June 4.

At the event, Mawani signed an agreement with the French Ministry of Economy, Finance, and Industrial and Digital Sovereignty and its Marseille counterpart as part of France and Saudi Arabia’s commitment to excellence in trade and maritime transport.


Riyadh among top 5 MENA startup ecosystems, report states

Updated 19 June 2024
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Riyadh among top 5 MENA startup ecosystems, report states

RIYADH: Saudi Arabia’s capital Riyadh is among the top five startup ecosystems in the Middle East and North Africa region, according to new data. 

The international policy advisory and research organization Startup Genome, in collaboration with the Global Entrepreneurship Network, revealed that three of the Kingdom’s cities were among the top-ranked startup ecosystems in the region. 

Riyadh was ranked fourth, with Jeddah and Alkhobar also making the list, according to Startup Genome’s latest Global Startup Ecosystem report. 

The criteria for inclusion in the list required ecosystems to be ranked in the top 40 global leaders or top 200 emerging environments or to have a value greater than $200 million. 

Furthermore, Riyadh was also one of two MENA ecosystems making the global list of cities with four or more unicorns in the last 10 years, the other being Dubai. 

A company is termed a unicorn when it reaches a valuation of $1 billion without being listed on the stock market. 

The report highlighted that the capital was ranked between 51 and 60 internationally, with its funding performance ranking seven out of 10. 

The Kingdom was also praised for its proactive approach to embracing artificial intelligence, with the report highlighting the nation’s $40 billion commitment to boosting the technology. 

The UAE’s capital, Abu Dhabi, was ranked as the fastest-growing startup ecosystem in the region, with a global rank between 61 and 70. 

“In a nation emboldened by its strategic vision to become a dominant global technology hub, the UAE is establishing its capital city as one of the world’s most prominent destinations for high-growth technology companies,” the report stated. 

Abu Dhabi’s ecosystem was valued at $4.2 billion, with one unicorn between 2021 and 2023. The city also saw a median funding of $825,000 in seed rounds. Total venture capital funding amounted to $1.1 billion between 2019 and 2023, with 16 exits during the same period. 

The region has seen significant growth in venture capital and startup development in recent years, mostly driven by Saudi Arabia. 

In 2023, the Kingdom secured 52 percent of the total VC funding in the MENA region, a substantial increase from the 31 percent share it held in 2022. 

Saudi Arabia’s startup ecosystem ranked first in regional venture funding activities in 2023, amassing an unprecedented $1.38 billion in capital.  

This achievement positioned the Kingdom at the forefront of venture capital funding in the Middle East and North Africa, surpassing the $1 billion mark for the first time, as reported by MAGNiTT in their Saudi Arabia FY2023 report. 


Half of Saudi Arabia’s World Defense Show 2026 floorspace already snapped up by exhibitors

Updated 19 June 2024
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Half of Saudi Arabia’s World Defense Show 2026 floorspace already snapped up by exhibitors

RIYADH: International exhibitors have already secured half of the space at the World Defense Show set to be held in Riyadh in 2026, demonstrating strong early interest in the biennial event.  

The defense and security exhibition, scheduled for Feb 8-12 and covering an area of 800,000 sq. m., follows the successful conclusion of its second edition in February. 

The event attracted a record number of 773 exhibitors, all aiming to capitalize on the Kingdom’s status as one of the largest defense spenders worldwide.   

In the state budget announced in December 2023, Saudi Arabia allocated SR269 billion ($71.70 billion) for the military sector this year, reflecting an 8.5 percent increase from the 2023 estimates.    

Andrew Pearcey, CEO of the World Defense Show, said: “The demand has been phenomenal. Just four months after the second edition of the show closed, to global industry approbation, we have already sold 50 percent of the floorspace for the third edition.”    

He added: “Many of the industry’s leading multi-domain businesses booked their stands for 2026 during the 2024 event. I am in no doubt that World Defense Show 2026, will be an essential event for global companies across the defense supply chain.”   

The CEO highlighted that the third edition of the event further solidifies the entity’s position as the emerging global hub for the defense industry.   

The early bookings for the event are in line with the show’s vision to serve as a platform where the global defense industry can convene, connect, and gain valuable insights into the latest innovation-driven defense and security solutions.   

The event also aims to foster integration across air, land, sea, space, and security domains to accelerate advancements in defense technologies.  

“We have grown each year, in the size of our event, in the number of exhibitors and visitors, but also in the depth and breadth of expertise and influence of those taking part in our panels, presentations and discussions,” Pearcey said. 

“Our impact is effected in two ways, as a gateway to partnership and collaboration with the Saudi Arabian defense industry, but more importantly as a truly global networking and policymaking event, welcoming senior delegations from around the world to meet representatives of the international defense industry in a confidential and impartial setting,” he underlined. 

The World Defense Show team are attending Eurosatory 2024, held from June 17 to June 21 at the Paris Nord Villepinte Exhibition Centre. This event will allow potential exhibitors to learn more about the 2026 initiative and book their space while it is still available.  

The World Defense Show 2026 will see the return of many of the event’s networking features, including the “Meet the KSA Government” program, which shares the latest developments on the Kingdom’s business guidelines, investment requirements as well as partnership processes.

Held at the heart of the global supply chain, the show will bring together the most prominent players and start-up visionaries from the defense domain to collectively craft the sector’s future.