HOW VISION 2030 IMPACTS THE TECH AND SOFTWARE DEVELOPMENT SECTORS IN SAUDI ARABIA: OPPORTUNITIES, COMPLIANCE, AND TAX CONSIDERATIONS

This article has been researched and written by the Business Development Team at Creation Business Consultants. AI has not been used in generating this article.

The vision for Saudi Arabia in 2030 represents not only an ambitious goal to transform the country’s economy from an economy based solely upon petroleum, but also an equal dependence on any single source of income, encouragement for local and foreign collaboration via offering attractive incentives and opportunities for foreign entities and imploring them to include local talent with these ventures by incorporating Saudisation laws within the labour laws.

An essential aspect of Vision 2030 is the development of the technology and software industries which are at heart needed for lasting innovation across industry, and modernization of various sectors, old and new.

This blog will discuss what opportunities will be created as a result of Vision 2030 within the Technology sector and potential government tenders, the Special Economic Zones (SEZ) that have been created focused on this sector and lastly, what are some available tax benefits and government investments.

VISION 2030 AND ITS AMBITIONS FOR THE TECH SECTOR

Vision 2030 aims to increase the share of GDP contributed by Saudi Arabia’s tech sector from a mere 1% now up to 5% by 2030. This transformation is like planting a seed with exceptional soil reforming information: integrated circuits called data centers, intelligent gateways made from various compound semiconductors. Cloud and Internet of Things (IoT) cores are key tools for real-time data processing; the Saudi National Strategy for Data and AI is a photonics-sponsored equipment cluster hoping to position the kingdom among the top 15 mega powers in AI so that innovation will thrive and plenty of jobs will be created for Saudi Nationals.

KEY STATISTICS:

• Tech Sector Contribution Goal: Raise from 1% to 5% of GDP by 2030.
• Digital Transformation Investment: Over $1 billion allocated for enhancing digital infrastructure.
• AI Job Creation Target: 15,000 new jobs in data and AI.

OPPORTUNITIES IN THE TECH AND SOFTWARE DEVELOPMENT SECTORS

Saudi Arabia’s Vision 2030 initiative will affect a variety of different sectors, due to the fact that this initiative requires a significant amount of construction and development, it presents significant opportunities for the tech sector:

Digital Infrastructure Development

One of the key aspects of these new developments is creating a world-class digital infrastructure, including high-speed broadband and advanced mobile technology to support foreign entities operations on secure and advanced network systems. The newly created Special Economic Zones (SEZs) and localized data centres are being established to support cloud computing and data-driven industries.

Artificial Intelligence (AI) and Data Analytics

The National Strategy for Data and AI aims to position Saudi Arabia among the top 15 global leaders in AI, with an estimated $135 billion contribution to GDP by 2030.

AI applications are transforming sectors such as healthcare (telemedicine), finance (blockchain), and energy (IoT-enabled smart grids) – startups within these areas are encouraged to apply for Entrepreneur Licenses with the support of University’s/ Business Incubators, which allows them to bypass certain requirements laid out by the Ministry of Investment for foreign owned entities, such as the need for entering the KSA market under the corporate ownership of an existing entity with 12-months audited financial statements.

Smart Cities and IoT

Projects like NEOM and other smart city initiatives leverage IoT technologies to optimize urban planning, energy management, and citizen services. The IoT market in Saudi Arabia is projected to reach $2.9 billion by 2025.

E-Government and Digital Services

Saudi Arabia aims to become a global leader in e-government by expanding online services, improving transparency, and streamlining public service delivery through platforms like Absher and Tawakkalna, CBC are keenly waiting on these developments because we have seen massive delays to applications due to these public platforms crashing because of the sheer volume of foreign companies using them. The Authorities have stated they will introduce Digital inclusion programs to ensure unified platforms for efficient service delivery across government agencies.

Public-Private Partnerships and Startups

Vision 2030 fosters collaboration between the government and private sector, creating opportunities for startups through business incubators, venture capital funds, and initiatives like Riyadh Tech Valley.

SMEs are supported with e-commerce platforms and international partnerships to expand their market reach, The KSA government has identified that traditional retail dominates about 50 percent of the market in the Kingdom compared to 20 percent in a number of countries in the Gulf Cooperation Council (GCC), with the retail market suffering from limited penetration of modern trade and e-commerce. The government aims to increase the contribution of modern trade and e-commerce to 80 percent in the retail sector by 2030. This is planned to be achieved by attracting both regional and international retail investors, increasing financing of small retail enterprises to stimulate their growth and development and by easing restrictions on ownership and foreign investment.

Saudi Aramco C02 DAC

Located at Aramco’s site in Dhahran, the Co2 DAC boasts world class R&D and testing facilities levels of testing for standards such as radiated emission, power dissipation, electromagnetic compatibility and electrical safety and also quality control.

“CO2 -DAC technologies could potentially play a role in meeting our GHG emission reduction ambitions, particularly in hard-to-abate sectors. The technology is at an early stage and costly and requires significant research and development investment. Global collaboration will help to advance it — in the Kingdom and beyond.”

— Ali A. Al-Meshari, senior vice president of Technology Oversight and Coordination (TOC)

Special Economic Zones (SEZ’S)

To accelerate economic diversification, Saudi Arabia has set up special economic zones (SEZs) offering a range of incentives for businesses. Tech infrastructure and environmentally sustainable living are a modern necessity that finds focus in NEOM. It will need a comprehensive system support for power, traffic flow, water supply, telecommunications networks as well as other aspects of future living​.

Cloud Computing Special Economic Zone (CCSEZ)

• Location: Innovation Tower at King Abdulaziz City for Science and Technology (KACST), Riyadh.
• Focus: Cloud computing services, data centers, and digital technologies.
• Key Features:
  • Flexible regulations and incentives for cloud service providers.
  • Supports the establishment of data centers across the Kingdom.
  • Aims to attract $13 billion in investments by 2030 in AI and data sectors248.

Riyadh Integrated Special Logistics Zone (RISLZ)

• Location: Adjacent to King Khalid International Airport, Riyadh.
• Focus: Logistics and technology-driven solutions.
• Key Features:
  • Facilitates tech-enabled logistics operations.
  • Supports digital transformation in supply chain management.

King Abdullah Economic City (KAEC)

• Location: West Saudi Arabia, along the Red Sea.
• Focus: ICT (electronic light manufacturing), logistics, and MedTech.
• Key Features:
  • Provides infrastructure for ICT companies.
  • Access to global markets via its strategic location.

SEZ TAX INCENTIVES

GOVERNMENT INVESTMENTS IN TECHNOLOGY

The Saudi government is attempting to lead the way for the tech revolution and to do this they are placing large investments in the sector. For instance, the National Strategy for Digital Transformation, launched under the Vision 2030 initiative, aims to position Saudi Arabia among the top 20 countries in digital innovation by 2030. The government has allocated billions of dollars to initiatives such as:

• The Saudi Data and Artificial Intelligence Authority (SDAIA): Established to drive AI adoption and enhance the Kingdom’s global competitiveness.
• Digital Government Authority (DGA): Focused on digitizing public services to improve efficiency and accessibility for citizens and residents.
• Smart Cities Projects: NEOM and The Line are flagship projects designed to showcase the integration of cutting-edge technologies, sustainable practices, and smart infrastructure.
• Cloud Computing and Data Centers: Collaborations with tech giants like Google Cloud, Alibaba, and Microsoft have resulted in significant investments in data centers and cloud services.

CONCLUSION

Vision 2030 marks not only an economic road map for diversification but also calls on techies worldwide to come and help the Kingdom fill its rapidly evolving tech landscape. Yet Saudi Arabia offers a combination of SEZs, a good meeting place for technology communities, and a regulatory system that reliably serves the interests of high-tech companies.

This is a once-in-a-lifetime opportunity for technology businesses, thanks to the ambitious infrastructure development being planned by Saudi Arabia. The Saudi government keeps on revising its statutes. To ensure that your application is successful, it is a good idea for you to keep abreast of the latest changes and get help from consultants like Creation Business Consultants. Please feel free to get in touch with us direct to discuss setting up a company in Saudi Arabia, by writing to [email protected] or calling our KSA office at +966 56 865 2329. Having the right approach will allow you to set up and operate a successful civil engineering firm in Saudi Arabia.