​​Swiss busi­ness in Saudi Ara­bia: op­por­tu­ni­ties and chal­lenges in the con­text of Vi­sion 2030​

​​From No­vem­ber 27 to 28, economiesu­isse par­tic­i­pated to­gether with a 16-mem­ber Swiss busi­ness del­e­ga­tion in the 14th Joint Eco­nomic Com­mis­sion (JEC) in Riyadh. The del­e­ga­tion was led by An­drea Rauber Saxer, Head of Bi­lat­eral Eco­nomic Re­la­tions at the State Sec­re­tariat for Eco­nomic Af­fairs (SECO). Rep­re­sen­ta­tives from in­dus­try, phar­ma­ceu­ti­cals and bank­ing were re­ceived by H.E. Sara Al-Sayed, Deputy Min­is­ter for In­ter­na­tional Re­la­tions at the Saudi Min­istry of In­vest­ment (MISA). 

​So­lu­tion-ori­ented ex­change 

​Saudi Ara­bia is cur­rently Switzer­land's sec­ond most im­por­tant trad­ing part­ner in the Mid­dle East (after the United Arab Emi­rates) with a trade vol­ume of around CHF 6.8 bil­lion (in­clud­ing gold). More than CHF 6 bil­lion of this is ac­counted for by Swiss ex­ports. At the end of 2022, Swiss com­pa­nies had also in­vested CHF 1.41 bil­lion in Saudi Ara­bia. 

​With re­gard to the bi­lat­eral legal frame­work, the free trade agree­ment be­tween the EFTA States and the Gulf Co­op­er­a­tion Coun­cil (GCC) was dis­cussed, the im­ple­men­ta­tion of which still needs to be im­proved. On the other hand, Swiss busi­ness, to­gether with SECO, has spo­ken out in favor of the rapid con­clu­sion of a new in­vest­ment pro­tec­tion agree­ment (IPA). 

​Saudi Ara­bia in the midst of a fun­da­men­tal trans­for­ma­tion process 

​The 14th JEC was al­ready the sixth of­fi­cial ex­change be­tween Switzer­land and the desert king­dom in just two years – and to a cer­tain ex­tent a con­tin­u­a­tion of the of­fi­cial visit by Fed­eral Coun­cil­lor Parmelin this Feb­ru­ary. This in­ten­si­fi­ca­tion of bi­lat­eral meet­ings is no co­in­ci­dence: Saudi Ara­bia is cur­rently in the midst of a far-reach­ing eco­nomic trans­for­ma­tion process with its Vi­sion 2030. In order to re­duce de­pen­dence on oil rev­enues, which still ac­count for around 40 per­cent of GDP, a num­ber of giga-pro­jects are being im­ple­mented under the Saudi Crown Prince Mo­hamed Bin Salman. These in­clude NEOM, a set­tle­ment pro­ject the size of Bel­gium in the north­west of the coun­try, Qid­diya, a gi­gan­tic en­ter­tain­ment and sports pro­ject, and Riyadh Expo 2030. Saudi Ara­bia is ex­pected to pro­vide around 500 bil­lion dol­lars for NEOM alone, mostly fi­nanced by the Saudi sov­er­eign wealth fund (Pub­lic In­vest­ment Fund, PIF), which has around 904 bil­lion dol­lars. 

​A dy­namic mar­ket with op­por­tu­ni­ties, but local knowl­edge and net­works are es­sen­tial 

​Vi­sion 2030 of­fers nu­mer­ous op­por­tu­ni­ties for Swiss com­pa­nies – in in­fra­struc­ture, tourism, sport, en­ter­tain­ment, dig­i­tal tech­nolo­gies, watches and jew­elry, re­new­able en­er­gies, min­ing, water sup­ply, health­care and ed­u­ca­tion. Some of the 100 Swiss com­pa­nies pre­sent in Saudi Ara­bia are al­ready in­volved in Vi­sion 2030. 

​Saudi Ara­bia is ac­tively seek­ing for­eign in­vestors to help fi­nance the giga-pro­jects. In view of the com­pe­ti­tion from the United Arab Emi­rates and Qatar, Saudi Ara­bia has de­cided to im­ple­ment a whole se­ries of mea­sures. These in­clude the Re­gional Head­quar­ters (RHQ) pro­gram, under which pub­lic con­tracts will only be awarded to com­pa­nies that have their re­gional head­quar­ters in Saudi Ara­bia. This year alone, around ten Swiss com­pa­nies have moved their re­gional head­quar­ters to the King­dom. In ad­di­tion, Saudi Ara­bia has re­cently adopted the Eco­nomic Par­tic­i­pa­tion Pol­icy (EPP), which re­quires eco­nomic par­tic­i­pa­tion in Saudi Ara­bia of at least 35 per­cent of the value of the im­ported con­tent for cer­tain pub­lic pro­cure­ment con­tracts. Swiss com­pa­nies plan­ning to enter the Saudi Ara­bian mar­ket should be fa­mil­iar with these new rules and not un­der­es­ti­mate their com­plex­ity.​