25/08/2026 03:26 AST
For French companies looking at Saudi Arabia, the investment proposition is increasingly extending beyond access to the Kingdom's domestic market.
Saudi Arabia is positioning itself as a manufacturing, technology and logistics base from which international companies can serve markets across the Middle East and beyond - a shift that could reshape the role of French businesses already operating in the country.
At the center of that proposition is scale. Saudi Arabia is the region's largest economy, with GDP of approximately ?1.1 trillion, while Vision 2030 is driving the development of industries beyond the Kingdom's traditional energy base.
The industrial sector illustrates the pace of expansion.
By the end of 2025, Saudi Arabia had 12,946 factories. During that year alone, 1,660 new industrial licenses worth approximately ?17.1 billion were issued and 1,201 factories began production.
The infrastructure supporting this expansion includes 36 industrial cities and more than 700 ready-built factories. The Kingdom's four Special Economic Zones offer qualifying investors a 5 percent corporate tax rate for up to 20 years, while Saudi Industrial Development Fund financing can cover up to 75 percent of eligible project costs.
French companies are already positioned to benefit. Schneider Electric, Vallourec and Tarkett are among those building industrial positions in the Kingdom, with Tarkett establishing a joint venture for production in Jeddah.
Saudi Arabia is simultaneously strengthening its role as an export platform.
Non-oil exports reached ?83.4 billion in 2025, including re-exports, reaching more than 180 countries. More than ?85.6 billion is committed to transport and logistics through 2030, while the Kingdom's location on both the Red Sea and Gulf provides access to international trade corridors connecting Asia, Africa and Europe.
For companies looking beyond Saudi Arabia itself, Riyadh is also emerging as a regional management center.
More than 750 companies have established regional headquarters in the capital under the Regional Headquarters Programme, including 39 French companies across eight sectors. Qualifying businesses can receive zero percent corporate and withholding tax for 30 years.
That proposition is reinforced by broader economic stability. Saudi Arabia held an A+ sovereign credit rating with a stable outlook, affirmed by S&P in March 2026, while official reserves stood at around ?421.5 billion in June.
French companies therefore enter the next phase from an established base. French FDI stock reached approximately ?16.3 billion in 2024 and has doubled over the past three years, while companies already familiar with the Saudi market continue to reinvest and expand.
For French investors, the emerging opportunity is consequently larger than participation in individual Saudi projects. It is the possibility of using the Kingdom as a platform to manufacture, innovate, export and manage regional operations - turning a long-standing bilateral investment relationship into a gateway for wider growth.
Arab News
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