Fashion, food and furniture, traditionally the mainstays of Made in Italy, represent only a part of the main sectors of Italian exports to Saudi Arabia. The prospects for Italian companies in this market are particularly promising, especially in the most dynamic sectors such as wood and furniture, means of transport, electrical equipment and construction.
This positive scenario is strengthened by a strategic partnership with Saudi Arabia, which extends cooperation to key sectors such as renewable energy, digital and space. In addition, Italian companies can benefit from the investment opportunities offered by the Saudi Vision 2030, an ambitious reform program aimed at transforming the Saudi economy, reducing dependence on hydrocarbons and promoting growth based on services and knowledge.
In the period 2024-2027, Saudi imports are expected to grow, with an estimated annual rate of around 5%. Relations between Italy and Saudi Arabia in particular, they are currently in a particularly favorable context, with Italian exports constantly increasing. The nation represents the third destination market for Italian goods in the Middle East and North Africa area, ranking 32nd globally.
Looking at the prospects of the construction sector, the increase in infrastructure and urban investments, in line with the mega-projects of Vision 2030, together with the constant population growth (estimated at 2% per year and with a population exceeding 36 million inhabitants), indicates a promising growth for exports in the construction and design sectors.
The business environment in Saudi Arabia is indeed extremely dynamic, characterized by reforms that simplify business activities and attract foreign investment. The country also offers significant tax advantages, including no personal income tax, a 20% corporate income tax rate, and a VAT rate of 15%. In addition, there are numerous agreements in place to avoid double taxation, including those with Italy. Additional incentives include concessions for the import of materials and equipment for new production investments, easier visa access, and support for joint ventures and localization of activities.
In light of these factors, the construction sector emerges as a strategic area with excellent development prospects and significant opportunities for Italian companies.
Saudi Arabia is a large market, with a population of almost 36 million, predominantly young, and an annual population growth rate of between 2% and 3%. These factors suggest a steady increase in population over the next decade, opening up significant business opportunities for Italian companies.
The rapid population growth, in fact, is generating a growing demand for housing, infrastructure and services, which represents the main driver of growth in the country. The huge investments planned by the Saudi government are aimed precisely at supporting a demand destined to reach unprecedented levels.
Already among the key sectors for Italian exports, the construction sector in Saudi Arabia emerges at the forefront, thanks to the numerous projects promoted within the Vision 2030. According to the MAECI Economic Observatory, the main opportunities are linked to urban and real estate development, with a construction market that has seen steady growth in recent years. In fact, the country is the largest producer and consumer of building materials in the entire Middle East region.
A recent report by real estate consultancy Knight Frank predicts that the nation will become the main construction market globally by 2028. The study highlights extraordinary growth in the construction sector in Saudi Arabia, with industrial production reaching $141 billion in the first half of this year, up 43% from 2023. This is projected to exceed $181 billion by the end of 2028.
GlobalData estimates predict average annual growth higher than 4% for this market in the period 2024-2027, and the opportunities concern numerous sectors, including: building materials (with a particular focus on ceramics), lighting and machinery. water treatment, electrical systems. Many Italian companies have already seized the opportunities offered by the development of futuristic cities, such as New, and the awarding of the 2029 Winter Olympic Games opens up further prospects in the sectors related to the construction of facilities and infrastructures dedicated to the event.
Octagona, thanks to over ten years of experience in the internationalization of companies, is able to offer complete assistance to companies interested in entering this market. We develop tailor-made projects, following the specific requests of customers.
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