Why tech startups should choose Riyadh as their MENA launchpad

Riyadh has become a magnet for multinational corporations, with around 600 foreign companies establishing their regional headquarters in the city. (SPA)
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Updated 21 June 2025
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Why tech startups should choose Riyadh as their MENA launchpad

  • Saudi Arabia offers startups access to a high-spending consumer base and a gateway to regional expansion

RIYADH: Riyadh is becoming a leading destination for tech startups in the Middle East, fueled by Saudi Arabia’s Vision 2030 reforms, an advanced infrastructure, and robust government-backed incentives.

The Saudi information and communication technology market is projected to reach $54.90 billion in 2025 and $82.51 billion by 2030 at a compound annual growth rate of 8.49 percent, according to an analysis by Mordor Intelligence.

This growth highlights the Kingdom’s increasing prominence as a regional innovation hub.

At the heart of this transformation is Saudi Arabia’s Vision 2030 economic diversification plan, which has placed technology at the forefront of its strategy. Major initiatives, such as NEOM, a $500-billion smart city powered by artificial intelligence and renewable energy, and Riyadh Tech Valley, a dedicated hub for AI, the Internet of Things, and robotics startups, are driving this momentum.

Government programs such as the Saudi Unicorns Program and Tech Growth Financing provide critical support for scaling businesses, further cementing Riyadh’s appeal. 

Emmanuel Durou, technology, media and telecommunications leader at Deloitte Middle East, highlighted three key operational factors behind Riyadh’s startup success. “First, Saudi Arabia’s advanced digital infrastructure has significantly accelerated startup growth,” he told Arab News in an interview. 

The 2018 Bankruptcy Law emphasizes debt restructuring over liquidation, providing cash-strapped startups a mechanism to negotiate with creditors early before default.

Jasem Al-Anizy, partner in corporate finance at Addleshaw Goddard KSA

Government-led digital transformation initiatives have created a robust technological backbone, with 14 percent of Saudi broadband users enjoying speeds over 1G bits per second — far surpassing the 4 percent seen in markets like the UK. “This infrastructure supports rapid innovation and scaling up,” he added.

The second factor, according to Durou, is the Kingdom’s strategic focus on developing local talent pipelines. “As many as 86 percent of Saudi universities now provide undergraduate programs in AI, 56 percent offer master’s degrees, and doctoral opportunities stand at 9 percent,” he noted.

The Deloitte leader emphasized that institutions like King Abdullah University of Science and Technology play a pivotal role in supplying startups with skilled, technology-ready talent.

Lastly, Durou pointed to the Kingdom’s supportive business environment, which includes government incentives, substantial funding mechanisms like venture capital and private equity, and vibrant incubator ecosystems such as Garage 46 and Impact 43.

He also shed light on the Kingdom’s high consumer adoption rates of advanced technologies, particularly Gen AI. 

Deloitte’s recent survey outlined Saudi Arabia’s high awareness of the technology at 76 percent, with usage frequencies of 20 percent daily and 32 percent weekly — significantly higher than the UK, he added. 

When comparing Riyadh’s startup scaling environment to Dubai’s, Durou observed distinct strengths in each. 

“In Riyadh, government-driven initiatives such as Saudi Vision 2030 have significantly streamlined regulatory processes, enabling startups to reduce their time-to-market,” he said, adding that “extensive support from local incubators, accelerators, and dedicated funding programs serve to further accelerate product development and launch timelines.”

Durou noted that customer acquisition costs in Riyadh are comparatively lower, driven by the ongoing surge in digital adoption among consumers and supported by targeted government-backed marketing initiatives. 

The fintech sector, in particular, benefits from robust governmental support, which helps meet rising local demand. Meanwhile, e-commerce growth is further propelled by high Internet penetration and shifts in consumer behavior.

“Dubai offers rapid market entry facilitated by the globally recognized Dubai International Financial Centre and a mature, efficient regulatory environment. Although high market competition can drive up customer acquisition costs in Dubai, it’s balanced by an expansive and diverse customer base,” he explained.

Durou highlighted that the DIFC ecosystem offers fintech startups access to government incentives, which greatly enhance their growth prospects. He also emphasized that Dubai’s strategic geographic position as a global trade hub, along with its advanced logistics and warehousing capabilities, significantly accelerates the expansion of e-commerce.

Jasem Al-Anizy, partner in corporate finance at Addleshaw Goddard KSA, shed light on the legal structures that are proving effective in the Kingdom.

“Saudi startups have historically preferred an offshore ring-fencing of intellectual property assets by holding and protecting intellectual property interests in a standalone sister company based in an offshore jurisdiction,” he explained to Arab News.

“This has helped startups in scaling globally and simplifies exit strategies,” Al-Anizy said. 

Government-driven initiatives have significantly streamlined regulatory processes, enabling startups to reduce their time-to-market.

Emmanuel Durou, technology, media and telecommunications leader at Deloitte Middle East

However, with stronger business and intellectual property laws, there is increasing trust in local company structures like the Simplified Closed Joint Stock Co.

Al-Anizy also highlighted the advantages of Riyadh’s bankruptcy laws for tech startups facing liquidity challenges. The 2018 Bankruptcy Law emphasizes debt restructuring over liquidation, providing cash-strapped startups a mechanism to negotiate with creditors early before default, he said.

The law was introduced to provide guidance on the adoption and implementation of bankruptcy proceedings. Despite its name, the primary objective of the Bankruptcy Law is not liquidation but rather the rescue of insolvent businesses through reorganization and financial restructuring.

Al-Anizy said that this sophisticated regime demonstrated in recent large-scale restructurings, has garnered recognition from founders and investors alike. On the dispute side, mediation and the Saudi Center for Commercial Arbitration are becoming preferred avenues for resolution.

For foreign founders setting up their MENA Headquarters in Riyadh, Al-Anizy stressed the importance of clear contractual considerations. “Founders having an unclear picture of their share cap table, equity vesting, or the conversion of any issued SAFE/KISS notes is an easily avoidable way to lose investor confidence,” he warned.

A Simple Agreement for Future Equity is an investment instrument that allows startups to raise capital without immediately determining a valuation, converting it into equity upon a future-priced round or liquidity event. Similarly, a Keep It Simple Security operates as either a convertible note or a SAFE-like agreement, offering standardized terms for early-stage funding.

Both are designed to streamline early investments while deferring valuation discussions, but founders must track their terms, such as discount rates, valuation caps, and conversion triggers, to maintain transparency with investors.

Al-Anizy also advised explicit contractual clauses to ensure intellectual property rights are clearly vested in the company, safeguarding the business and maintaining investor trust.

Riyadh has become a magnet for multinational corporations, with around 600 foreign companies establishing their regional headquarters in the city since the launch of the Saudi Program for Attracting Regional Headquarters in 2021.

Spearheaded by the Ministry of Investment and the Royal Commission for Riyadh City, this initiative is a cornerstone of Vision 2030’s goal to position Saudi Arabia as a global business hub.

The program offers compelling incentives, including a 30-year tax relief package with 0 percent corporate and withholding taxes, streamlined setup processes, and access to world-class infrastructure.

Riyadh’s strategic location at the crossroads of Asia, Africa, and Europe, combined with its skilled workforce and economic stability, has made it the top choice for multinationals looking to expand in the region.

Riyadh’s appeal is further bolstered by business-friendly policies, including 100 percent foreign ownership in key sectors, tax incentives, and streamlined licensing through the Saudi Business Center. Startups also benefit from partnerships with major corporations like Aramco and STC, as well as accelerator programs from Flat6Labs and 500 Global. 

With a population of 36 million and the largest economy in the Middle East and North Africa, Saudi Arabia offers startups access to a high-spending consumer base and a gateway to regional expansion. The Kingdom’s advancements in technology were recognized in the 2024 Global Innovation Index, where it secured the 47th spot among 132 countries.

Events such as the LEAP Tech Conference and Riyadh Season continue to draw global investors, while local success stories — from Tamara, Saudi Arabia’s first fintech unicorn delivering payments and banking, to Salla, an e-commerce platform empowering SMEs with digital storefronts — demonstrate Riyadh’s potential as a launchpad for high-growth companies.


EU pledges $46.4bn for MENA renewables, borders, and migration

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EU pledges $46.4bn for MENA renewables, borders, and migration

JEDDAH: Renewable energy, border security, and migration pathways in the Middle East and North Africa will receive €42.5 billion ($46.4 billion) from the EU from 2028, it has been announced.

This doubled financial commitment, under a new funding instrument, aims to enhance stability and cooperation in the region.

Speaking during a press conference in Brussels on July 17, EU Commissioner for Democracy and Demography Dubravka Suica said the increased budget reflects the bloc’s strategic shift toward deeper cooperation with countries in region.

“This is a strong financial toolbox, with which we will invest in stability, security and prosperity, through mutually beneficial partnerships with our Southern neighbors in the Middle East, North Africa and the Gulf,” she said, emphasizing that the Mediterranean is not only a region of challenges but also one of opportunities.

Suica further noted that the EU will support partner countries in addressing the underlying causes of socio-economic fragility, which she said are central to political instability and radicalization.

She added that the bloc will also confront the challenges of the green transition by investing in renewable energy projects, benefiting citizens on both sides of the Mediterranean.

“These increased funds will enable us to respond more effectively to an increasingly volatile geopolitical context right at our doorstep,” the commissioner said.

She stressed that the stability and prosperity of the Mediterranean are directly linked to Europe’s own.

“Their safety is our safety. Their success is our shared success. Their protection of borders is also ours.”

Suica described the Multiannual Financial Framework as an instrument that will strengthen the union, both internally and internationally.

“This new framework enables us to better protect our interest on a global stage and protect our values and interests in an increasingly complex geopolitical context,” she concluded.


Closing Bell: Saudi bourses end week in red at 11,007

Updated 21 min 56 sec ago
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Closing Bell: Saudi bourses end week in red at 11,007

RIYADH: Saudi Arabia’s Tadawul All Share Index fell on Thursday, shedding 31.76 points, or 0.29 percent, to close at 11,006.98.

The benchmark index recorded a total trading turnover of SR4.19 billion ($1.12 billion), with 125 stocks advancing and 117 declining.

The Kingdom’s parallel market Nomu also slipped, losing 50.11 points to close at 27,294.97.

The MSCI Tadawul Index dropped 0.32 percent to settle at 1,410.87.

LIVA Insurance Co. was the best performer on the main market, with its share price surging 9.94 percent to SR13.93.

Emaar The Economic City saw its shares rise by 5.15 percent to SR13.69, while Alistithmar AREIC Diversified REIT Fund gained 4.57 percent to reach SR9.15.

Tourism Enterprise Co. recorded the steepest decline, falling 6.45 percent to SR0.87.

On the announcements front, Lana Medical Co. said it secured multiple contracts worth SR57.1 million from the Ministry of Health.

According to a Tadawul statement, the first contract, valued at SR53.5 million, involves the collection and storage of hazardous waste at health centers, hospitals, and specialized facilities in the Al-Jouf region and Al-Qurayyat Governorate.

The second contract, worth SR3.6 million, covers the transportation of medical waste to the Riyadh First Health Cluster.

The company stated that the impact of these 60-month contracts will be reflected in its financial results starting in the fourth quarter of 2025.

In a separate filing, Lana Medical Co. announced a two-year agreement valued at SR10 million with the National Unified Procurement Co. to manage medical waste.

Shares of Lana Medical Co., listed on the Nomu parallel market, rose 7.98 percent to close at SR36.


Saudi Arabia’s retail real estate growth prospects strong: S&P Global 

Updated 17 July 2025
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Saudi Arabia’s retail real estate growth prospects strong: S&P Global 

RIYADH: International retail brands attracted by social and economic shifts in Saudi Arabia are set to deliver real estate sector growth to the Kingdom, according to an analysis.

In its latest report, S&P Global stated that the residential real estate sector in the nation also appears strong, with young Saudi families relocating to cities in search of work opportunities. 

Strengthening the real estate sector is one of the crucial goals outlined in Vision 2030, as Saudi Arabia continues to diversify its economy away from oil and position itself as a global business and tourist destination. 

The Kingdom’s Real Estate General Authority expects the property market to reach $101.62 billion by 2029, with an anticipated compound annual growth rate of 8 percent from 2024.

In its latest report, S&P Global said: “Saudi retail real estate growth prospects are strong. Significant social and economic changes in the Kingdom are making it a major target market for international brands in the fashion, luxury, and food and beverage segments. As a result, demand for premium retail space is increasing.” 

In June, global real estate consultancy Knight Frank, also echoed similar views, stating that Saudi Arabia’s commercial real estate sector is witnessing exponential growth, with rents for Grade A office spaces in the Kingdom’s capital reaching SR2,700 ($719.95) per sq. meter by the end of the first quarter, representing a 23 percent rise compared to the same period in the previous year. 

In its latest analysis, S&P Global noted that Saudi Arabia’s retail landscape is expected to face several challenges, including oversupply, particularly in the shopping mall sector. 

“Saudi retail real estate could face a supply wall. Knight Frank forecasts Riyadh’s supply to grow by 50 percent by 2027 and Jeddah’s to grow 75 percent over the same period. This could lead to rental discounts, revenue-sharing lease models, and other incentives to maintain occupancies,” said S&P Global. 

The US-based agency further stated that the Kingdom’s retail real estate sector has strong growth prospects, provided that careful planning and market positioning are implemented, which are expected to help mall owners ensure long-term success.

In a broader context, the report projected that Dubai and Abu Dhabi are experiencing resilient demand and modest rental growth for retail real estate, with prime super-regional malls continuing to dominate the market, which has led to mall owners expanding their offerings.

S&P Global added that Dubai’s commercial real estate sector is booming, as vacancy rates remain at an all-time low of 8.6 percent, and demand for grade-A offices drives up rentals. 

“Supportive regulations for businesses, dynamic economic environment, and the low tax regime sustains the city’s attractiveness for global businesses and family offices,” said the report. 

S&P Global cautioned that oversupply in the oil market will continue to outweigh slow oil demand growth through 2025 and beyond, and this could negatively impact the growth of real estate sectors in both Saudi Arabia and Dubai. 

“Unfavorable tariffs could also lead to economic slowdown and weaker market sentiment. This could have some impact on residential prices and rents as we believe there is good correlation, despite Dubai’s economy being less reliant on oil. Saudi Arabia and its spending on Vision 2030 remain highly dependent on oil prices,” added the report. 

According to the analysis, the current ceasefire between Israel and Iran has reduced immediate regional credit stress; however, an escalated, prolonged geopolitical conflict could lead to an expatriate exodus from the region, severely impacting real estate prices and rents.


Syria announces sweeping tax reforms to boost transparency, investment

Updated 17 July 2025
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Syria announces sweeping tax reforms to boost transparency, investment

RIYADH: Syria’s Finance Ministry has announced a major overhaul of the country’s tax system, set to take effect in early 2026, as part of broader efforts to modernize fiscal policy, enhance transparency, and attract investment.

According to a statement carried by the state-run SANA news agency, the draft law for the new income tax system is currently open for public consultation until July 30. The reforms are designed to ease the burden on taxpayers, promote fairness, and stimulate economic activity through clearer and more equitable rules.

Under the proposed system, individuals earning less than $12,000 annually will be fully exempt from income tax, in a move aimed at supporting low-income earners.

Corporate tax rates will be tailored by sector, replacing the current “flat income committees” with a more transparent and structured mechanism.

The reforms will also unify multiple charges into a single tax fee to eliminate double taxation, while offering deductions for taxpayers who make verified social contributions.

Enhanced digital systems—including mandatory electronic invoicing and QR code integration—will be introduced to curb tax evasion and strengthen compliance.

To improve trust and streamline the resolution of tax disputes, the ministry plans to implement simplified procedures, with complex cases referred to a specialized tax court. Notably, the burden of proving income sources will shift from the taxpayer to the tax authority—a significant change from the existing framework.

In addition, incentives will be introduced for timely payment, and a separate initiative will address the settlement of outstanding tax dues to protect public funds without overburdening taxpayers.

The Finance Ministry said the changes reflect its commitment to building a fair, flexible, and modern tax environment that can support Syria’s broader economic recovery.


Saudi MSME lending surges 31% in Q1 amid digital optimism and financial reform

Updated 17 July 2025
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Saudi MSME lending surges 31% in Q1 amid digital optimism and financial reform

  • Total value of facilities reached SR383.2 billion
  • 95.12 percent was disbursed by banks

RIYADH: Saudi Arabia’s lending to small, medium, and micro enterprises rose by 31 percent year on year in the first quarter of 2025, according to recent data from the Saudi Central Bank. 

The total value of facilities reached SR383.2 billion ($102.18 billion), up from SR293.43 billion in the same period last year. 

Of this, 95.12 percent was disbursed by banks, while the remaining 4.88 percent came from finance companies, highlighting the formal sector’s growing involvement in SME credit provision. 

Medium-sized companies — defined as those with revenues between SR40 million and SR200 million and 50–249 employees — accounted for the largest share of loans, receiving SR190.18 billion. 

Small enterprises followed with SR139.6 billion, while micro-enterprises received SR53.43 billion. Notably, micro-enterprises saw the fastest growth, with loan volumes surging by 82 percent year on year, compared to 35 percent for small enterprises and 18 percent for medium-sized firms. 

The lending boom reflects the expanding role of SMEs in Saudi Arabia’s economic diversification strategy under Vision 2030. 

Monsha’at, the General Authority for Small and Medium Enterprises, has played a pivotal role through programs like Kafalah — a loan guarantee initiative designed to de-risk lending to SMEs by assuring a portion of the loan value to participating financial institutions. 

This has been instrumental in extending access to credit, particularly for micro and first-time borrowers. 

Despite rising loan volumes, credit access remains a structural challenge. According to the World Bank, SMEs across the Middle East and North Africa region receive only 8 percent of total bank credit, compared to 22 percent in high-income economies. In Saudi Arabia, SMEs accounted for just over 9 percent of total loans in 2024 — far below the Vision 2030 target of 20 percent. 

New players are helping bridge the gap. Saudi-based fintech platform Erad recently raised $16 million in a pre-Series A funding round to expand its Shariah-compliant, data-driven SME financing offering, according to Wamda in April. 
The company, which provides funding in as little as 48 hours, says over 60 percent of its clients are first-time credit takers. Since launch, it has processed more than SR100 million in funding and received over SR2 billion in applications, underscoring pent-up demand for fast, flexible finance. 

Meanwhile, digital optimism among Saudi entrepreneurs is on the rise. According to the 2025 Mastercard SME Confidence Index, 93 percent of surveyed SMEs expressed confidence in the year ahead. 

The adoption of digital payments has risen sharply, with 99 percent now accepting them, up from 88 percent in 2023. SMEs cited faster access to revenues, enhanced credibility with financial institutions, and more streamlined transactions as key benefits. 

Data and AI are also seen as enablers of smarter, more inclusive lending. Nearly 97 percent of surveyed SMEs said better data and analytics tools were essential to scaling operations. 

A growing number are prioritizing AI, automation, and cybersecurity in their growth strategies — trends that align with broader efforts to digitize financial infrastructure. 

Lending models must evolve alongside SME needs. Traditional bank lending often requires fixed-asset collateral and extensive documentation, limiting access for tech-oriented or service-based SMEs, according to a June article by International Banker. 

Risk assessment remains based on backward-looking financials, rather than dynamic indicators like sales or payroll data. Fintechs like Erad are disrupting this model by using real-time revenue data to underwrite loans. 

Globally, the credit gap for SMEs stands at $5.7 trillion, with Gulf Cooperation Council countries accounting for roughly $250 billion of that, according to International Banker. Saudi Arabia’s efforts to close this gap are gaining momentum. In addition to loan guarantees and fintech innovations, open banking frameworks, SME-focused digital banks, and embedded finance models are helping to lower access barriers. 

Vision 2030 sets a clear target: raise SME contribution to GDP from 30 percent to 35 percent. With over 1.8 million SMEs now operating in the Kingdom, financial empowerment of this sector is not just a policy goal — it is a macroeconomic imperative. 

The path ahead will require deeper ecosystem alignment, tailored credit models, and continued innovation. But the first quarter of 2025 has already signaled a strong start — one that reflects both institutional commitment and entrepreneurial momentum across the Kingdom.