Relations between Italy and Saudi Arabia are strengthening at various levels: political, economic, commercial and cultural. In fact, Italy looks to Saudi Arabia as an investment opportunity in the context of Vision 2030, an ambitious plan of reforms and an economy based on services, knowledge, tourism and start-ups. Among Vision's projects, there are giga-works such as the futuristic city of Neom, luxury resort along the coast of the Red Sea, Qiddiya theme park and the tourist development of archaeological sites such as Al Ula and Diriyah.
In this article we will therefore analyze the latest Made in Italy trends in Saudi Arabia, to then move on to the study of the most successful sectors in the market. Finally, we will review everything you need to export to Saudi Arabia, including new regulations and required documentation.
In this section, we will explore the reasons why Italian companies should consider exporting to Saudi Arabia, taking advantage of the opportunities offered by Vision 2030 and the tax advantages present in the country.
Vision 2030 was adopted by Saudi Arabia in 2016 and is aimed at radically transform the country economically, socially and culturally. The goal is to create national production chains, promote private initiative and launch productions with a highly local content, involving the Saudi workforce. This transformation process will be supported by major projects led by the Saudi sovereign wealth fund, such as the futuristic NEOM smart city, the Qiddiya entertainment park and the Red Sea Project resorts.
Saudi Arabia is the main country in the Gulf and enjoys a strategic geographical position that quickly connects to Africa, Europe and Asia. The country has excellent infrastructure, including transportation, telecommunications, and information technology, as well as a well-capitalized banking and financial system. With 28 airports handling over 90 million passengers a year from over 45 countries, accessibility to the Saudi market is simple and smooth.
With a population of 36.4 million inhabitants, of which two thirds are young people under 35 years of age, Saudi Arabia offers a dynamic and growing market. This demographic dividend presents a major opportunity for companies looking to enter sectors such as technology, fashion and the cultural industries, which are particularly attractive to younger segments of the population.
Saudi Arabia offers attractive tax benefits for business and investment. The country does not tax personal income and charges a tax rate of 20% on corporate income and 15% on VAT. A number of agreements have been signed to avoid double taxation, including an agreement with Italy. Furthermore, there are no import duties for materials, equipment and technologies necessary to start new productive investments. There are also exemptions from legislation on Saudization and facilitations for visas and residence permits for qualified personnel.
Despite efforts at economic diversification, the oil industry still benefited from the increase in oil prices during the year.
Despite an overall negative balance in the trade balance, Italy is positioned among the top 10 suppliers for Saudi Arabia, after Germany. Italian exports to Saudi Arabia in 2024 are aincreased by 18.7% compared to 2023, reaching a total value of 8.2 billion euros.
But what are the main sectors in which to export Made in Italy to Saudi Arabia? By analyzing the data published by the Ministry of Foreign Affairs, we can draw up a real ranking of the most promising sectors for Italian exporting companies.
In detail, the general purpose machinery sector is the one that occupies the first position, with 1,598 million euros in the first half of 2024, therefore representing 32.8% of total Made in Italy exports. In second place we find electrical appliances, which with 444 million euros represented 9.1%% of total Italian exports. The means of transport sector closes on the podium with 428 million euros in value (8.8%% of the total).
The fashion industry it also has room for improvement, since Italian brands represent a point of reference for the Saudi market, especially among the younger segments of the population, which make up about two-thirds of the total.
In the data relating to exports for the first two years of 2024 to Saudi Arabia, equal to a total of 8.2 billion euros, our machinery and other electrical appliances, which together with means of transportation, already constitute more than the 50% in the basket, demonstrating the high recognition our technology enjoys on this market, especially of an industrial nature. In fact, Saudi Arabia looks to our manufacturing industry as a reference model within the framework of its National Industry Strategy.
In the wake of the ongoing strong development of the urban-real estate sector, it is also reasonable to expect an increase in sales of furniture and furnishings, in the light of the renowned Italian tradition in interior design. Prestigious brands such as Poltrona Frau, Minotti, iGuzzini and Cavalli Casa are already present on this market. Looking ahead, the growth of hospitality in connection with tourism could fuel a further demand for our furniture and furnishings, bearing in mind that the large hotel chains already present in Saudi Arabia decorate their interiors with Italian design.
As seen, exporting to Saudi Arabia offers enormous advantages for Italian companies interested in expanding their horizons and accelerating their growth process. But, in fact, how do you go about exporting to the Saudi market?
There are many options available to companies, but according to Octagona only 3 can really make a difference and we present them below:
Saudi Arabia represents a market full of opportunities for Italian companies who wish to expand their international business. Vision 2030 and the country's economic transformation offer a number of benefits, including local supply chains, large development projects and a young and growing population. Furthermore, the favorable business environment and tax advantages make Saudi Arabia an attractive option for Italian companies seeking new international partnerships.
Are you interested in exporting Made in Italy products to Saudi Arabia? Then contact us and tell us about your project: we will study the best solution together with you.
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