RIYADH: Saudi Arabia’s foreign direct investment inflows grew 33.5 percent year on year in 2025 to SR159.1 billion ($42.26 billion), with construction and manufacturing sectors accounting for the largest shares, official data showed.
According to the latest report by the General Authority for Statistics, construction activities led inflows, attracting SR34.5 billion, or 21.7 percent of the total. Manufacturing followed closely with SR33.4 billion, or 21 percent of the total, while administrative and support service activities contributed SR22.4 billion.
This comes as Saudi Arabia has introduced several investment reforms and incentives to attract foreign capital, including an updated Investment Law that came into force in February 2025 to streamline procedures and strengthen investor protections.
Its Regional Headquarters Program also encourages multinational companies to establish regional bases in the Kingdom by offering qualifying firms incentives and support services.
The measures form part of Vision 2030’s broader push to diversify the economy and raise annual FDI to $100 billion by 2030. The 2025 inflow was equivalent to about 42 percent of that target.
“In terms of the volume of FDI net inflows, Luxembourg recorded the highest net inflows, amounting to SR24.4 billion, followed by the UAE, with SR9.4 billion in 2025,” said GASTAT.
Egypt followed, with a net inflow of SR9.4 billion, while Yemen recorded SR5.2 billion.
Commenting on the report, Hamza Dweik, head of trading for the Middle East and North Africa at Saxo Bank, told Arab News that the rise in FDI is a strong indicator of the scale of capital being committed to Saudi Arabia’s economic transformation.
“Vision 2030 has created a sizeable pipeline of investment opportunities across the non-oil economy, while regulatory reforms and the opening of additional sectors to international investors have broadened the opportunity set,” said Dweik.
He added: “The scale of the transformation is also encouraging international companies to look at Saudi Arabia as a market where they can establish operations and participate directly in domestic growth, rather than simply sell into the country.”
FDI outflows
According to GASTAT, Saudi Arabia recorded FDI outflows of SR77.7 billion in 2025, representing an increase of 98.5 percent from the previous year.
Net FDI flows recorded modest growth of 1.7 percent, totaling SR81.4 billion in 2025, compared with SR80 billion in 2024.
The overall FDI stock expanded 8.3 percent to SR1.06 trillion by the end of 2025.
On the outflow side, manufacturing accounted for the largest share, at SR25.2 billion, or 32.4 percent of the total, followed by construction at SR14.8 billion and wholesale and retail trade, including the repair of motor vehicles and motorcycles, at approximately SR11 billion.
FDI stock volume
In terms of FDI stock, the UAE recorded the highest level, amounting to SR170.7 billion in 2025, followed by Luxembourg at SR125.3 billion and the US at SR73 billion.
By economic activity, manufacturing recorded the largest share of total FDI stock by the end of 2025, amounting to SR285.4 billion and accounting for 27 percent of the total.
This was followed by wholesale and retail trade and the repair of motor vehicles and motorcycles, accounting for 14.9 percent of total stock, while financial and insurance activities accounted for 12.6 percent and construction for 10 percent.
“The direction of travel is positive. The next test is whether Saudi Arabia can sustain this level of investment as it moves closer to the much larger 2030 objective. The annual FDI target rises to $100 billion by 2030, so even after reaching $42.38 billion, there remains considerable room for further expansion,” said Dweik.
He added that continued foreign participation in construction and manufacturing would be particularly encouraging because it would indicate that investors are committing capital directly to the Kingdom’s long-term economic development.
The Saxo Bank official said: “The more this investment translates into new productive capacity and deeper domestic supply chains, the stronger the contribution it can make to the broader Vision 2030 diversification program.”