Saudi Arabia's holy city Madinah becomes a magnate of business and investment
Once known primarily for its spiritual significance, Madinah is now fast
becoming one of Saudi Arabia’s most promising destinations for business and
investment. Fueled by over 224 active development projects worth more than SAR200
billion and covering 30 million square metres, the region is undergoing a
sweeping economic transformation aligned with Vision 2030
goals to diversify the Kingdom’s economy and expand private-sector
participation.
A recent report by the Madinah Chamber of Commerce and Industry
outlines the city’s momentum: 15 government projects, 10 semi-government
initiatives, and 199 private-sector ventures are currently in progress.
Together, they are expected to generate more than 125,000 new jobs, helping
strengthen local talent participation and drive sustainable regional growth.
A surge of development activity
The commercial sector leads the way, accounting
for 162 projects—roughly 80% of the total. Other key areas include 20 mixed-use
developments, 11 health projects, 8 residential ventures, 7 education
initiatives, 7 tourism and entertainment projects, 5 religious-purpose schemes,
4 public-utility developments, and 2 corporate projects.
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These large-scale efforts are transforming
Madinah into a dual magnet—both an investment powerhouse and a quality-of-life
destination for residents and visitors.
Nine distinct advantages for investors
The Chamber’s research highlights nine competitive
advantages that distinguish Madinah as an investment hotspot.
These include:
·
Attractive investment incentives across tourism,
manufacturing, and technology.
·
Multi-year tax exemptions and full foreign-ownership rights
in most sectors.
·
Streamlined licensing procedures through a unified
regional system.
·
Abundant mineral and agricultural resources, including
an annual 344,000-ton
date yield.
·
World-class infrastructure, featuring three
international airports—Prince Mohammad bin Abdulaziz (Madinah), AlUla, and
Yanbu—handling over 11 million passengers annually.
·
Robust logistics connectivity, anchored by Yanbu Commercial
Port (20 million tonnes of goods, 1.5 million containers) and King Fahd
Industrial Port (15 million tonnes, 400,000 containers).
·
The Haramain High-Speed Train, linking
Madinah to Makkah and Jeddah with over 1.5 million annual passengers.
·
Madinah Industrial City, spread across 10 million m² and
home to 540
factories, representing nearly 5% of the Kingdom’s total.
These advantages position Madinah as a strategically
engineered investment zone—not just a regional city, but a
focal point for Saudi Arabia’s economic diversification efforts.
Opening the market: Capital reforms and global
access
In a landmark step earlier this year, the Capital Market
Authority (CMA) allowed foreign investors to hold shares in
Saudi-listed companies owning real estate in Makkah and Madinah. Under the new
rules, non-Saudi investors may own up to 49% of shares in such entities—marking
a significant step toward a more open, globalized financial marketplace.
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These reforms complement broader initiatives
that enable qualified foreign institutions, resident investors, and international
funds to access Saudi capital markets—helping channel foreign capital into key
real-estate and infrastructure projects.
Strategic synergy: Projects, incentives, and capital
What makes Madinah’s rise unique is how its
development projects, investor incentives, and capital-market reforms work
together.
·
Massive project pipelines create tangible investment
opportunities.
·
Incentive frameworks lower entry barriers and boost
investor confidence.
·
Capital-market reforms ensure foreign funding can flow
in efficiently and at scale.
For domestic businesses, these projects open
new avenues in construction, real estate, tourism, logistics, and manufacturing.
For global investors, Madinah offers ownership rights, tax reliefs, and
simplified procedures—all within a rapidly expanding market.
Opportunities and challenges ahead
As Madinah moves through this transformative
phase, execution will be key. Delivering 224 projects efficiently, maintaining
quality, and ensuring local workforce integration remain critical success
factors. Additionally, while real-estate reforms have improved access for
foreign investors, further structural innovations may be needed to unlock the
full potential of international capital participation.
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A new economic identity
With its vast project pipeline, strategic
incentives, and investor-friendly reforms, Madinah is redefining itself as a modern,
globally connected investment hub. Its transformation mirrors the Kingdom’s
broader ambition—to create diversified, vibrant cities that compete for global
capital, talent, and innovation.
For investors,
entrepreneurs, and policymakers, Madinah’s economic moment has clearly
arrived—and it’s only the beginning.
Source: Gulf Business
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