Saudi National Day: Eight mega-projects shaping the kingdom's future

This year, Saudi Arabia has a lot celebrate on its 92nd Saudi National Day.

The festivities take place on Friday, September 23, as the nation lauds its economic, technological and cultural transformation, in line with its Vision 2030 strategy.

An official website has been launched by the kingdom's Entertainment Authority to celebrate the day, with in-depth information and traditional artwork that can be downloaded by residents to mark the occasion.

Here are eight of Saudi Arabia's most ambitious projects that aim to create a better quality of life for residents and attract more tourists.

Diriyah Gate

Located in the heart of the capital, the historic city of Diriyah will reveal 300 years of culture and history through heritage and educational experiences, plus shopping, entertainment and dining venues.

It is home to Unesco sites including At-Turaif, a World Heritage Site and open-air museum of Saudi Arabia’s history.

Diriyah was an ancient trade and pilgrimage route and a meeting point for those travelling between Asia, Africa and Europe.

Salwa Palace is the largest standing structure in the citadel and is known as the “home of kings and heroes”. The project is extremely popular with local people and international tourists during Riyadh Season, held at the end of each year.

Saudi Arabia aims to make Diriyah the cultural and heritage capital, “a landmark for Saudis and an icon for the whole world” as it became the capital of the First Saudi State in 1727 and is the legacy of the founding royal family, Al Saud.

The $50.6bn heritage project aims to attract 27 million domestic and international visitors by 2030.

An 18th-century palace built from mud and straw in Diriyah, on the outskirts of Riyadh. AFP

Shaheen Sat

The Saudi satellite Shaheen Sat is one of a new generation of miniaturised satellites, weighing 75 kgs.

Shaheen Sat carries a camera telescope and marine traffic automatic identification system.

It was launched by King Abdul-Aziz City for Science and Technology, which has launched 17 satellites between 2000 and 2021, while also participating in space tests in collaboration with Nasa and Stanford University.

Shaheen Sat aims to serve development objectives in the kingdom and provides the public and private sectors with images from space.

Saudi Arabia is seeking to contribute space technologies and systems to the space sector through national and international collaborations.

Train Projects

Saudi Arabia plans a “large transformation in public transportation” to provide easier, more comfortable and safer transport.

This year, the kingdom announced that it would more than triple the size of its rail network, with 8,000 kilometres of new track added to the 3,650km of track on the Saudi rail network, on three lines.

“New rail that will criss-cross the kingdom and add to the network we already have,” Investment Minister Khalid Al Falih said. He said the Gulf nation was working on a new investment law that would address both domestic and foreign investors.

The Line (Neom)

Saudi Arabia's Neom, the kingdom's $500 billion city of the future, will be powered entirely by clean energy, a major step in Saudi Arabia's shift away from an oil-based economy.

The Line is to be built in Neom and will be home to nine million people, who will live in interconnected societies run by artificial intelligence designed to co-exist with nature. The Line will be 170km long and up to 500 metres tall, with a mirror facade that will allow its footprint to “blend with nature”.

It will be the first city in the world to be powered by renewable energy, including wind, solar and hydrogen power.

By 2050, it is predicted that a billion people will have to relocate owing to rising carbon dioxide emissions and sea levels.

“We are building 120 Burj Khalifas' worth of real estate in the first phase,” said Giles Pendleton, executive director of development at The Line in Neom who confirmed they are “very much” under construction.

Qiddiya

Qiddiya, a Public Investment Fund project, will be the capital of entertainment, sports and arts.

The project's portfolio consists of parks and attractions; sports and wellness; motion and mobility; arts and culture; and nature and environment. The project will include will host a Six Flags theme park, a water park, a Formula One racing track and sports stadiums including venues for young Saudi athletes, and other cultural activities spread across 366 square kilometres.

The first phase is to be launched next year, with more than 60 projects and 300 activities featuring arts and culture, entertainment, hospitality and sports. A metro connection from Riyadh airport is planned to make the site more accessible.

The tourist destination Trojena will open in 2026 as part of Saudi Arabia's mega-city of the future, Neom. Photo: Neon

Trojena (Neom)

Saudi Crown Prince Mohammed bin Salman this year announced plans for Trojena, a global destination for mountain tourism, that will be located in the $500 billion high-tech city Neom.

The mountain tourism destination will be the first major outdoor skiing site in the GCC.

Trojena will support Neom's aim of supporting and developing tourism in the region.

In line with Vision 2030 goals, it aims to create more than 10,000 jobs and add 3 billion Saudi riyals ($800 million) to the economy by 2030.

The year-round destination will feature a ski village, nature reserve, luxury resorts, stores and restaurants, with sporting attractions including a ski slope, water sports and mountain biking.

It will include six districts: Gateway, Discover, Valley, Explore, Relax and Fun.

The project is set for completion by 2026.

The National Renewable Energy Programme

The National Renewable Energy Programme is part of Vision 2030 and the King Salman Renewable Energy Initiative, which aims to maximise the potential of renewable energy in Saudi Arabia.

NREP is an integrated programme which aims to increase sustainable renewable energy from the total energy sources in the kingdom.

The programme aims to achieve 58.7 gigawatts of renewable energy capacity and 50 per cent electricity through renewable energy projects by 2030.

Amaala

Amaala is a year-round ultra-luxury coastal destination planned for the north-western Tabuk province.

It will have its own airport and target luxury travellers seeking “transformative personal journeys” inspired by wellness, arts, culture and the “purity of the Red Sea”. It borders the city of Neom and the Red Sea Project within the Prince Mohammed bin Salman Natural Reserve.

Amaala will offer 3,000 hotel rooms in 25 hotels, and 900 private residential villas, along with a retail area with 200 outlets.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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• Spend less than you earn and save the rest. You can do this by earning more, or being frugal. Better still, do both.

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• Stick with it. Do not sell up in a market crash. Use the opportunity to invest more at the lower price.

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Saudi National Day: Eight mega-projects shaping the kingdom's future

A city of 9 million people, 8,000km of railway and a new mountain tourism destination are part of Vision 2030 strategy

Diriyah Gate

Shaheen Sat

Train Projects

​​The Line (Neom)

​Qiddiya

​Trojena (Neom)

​The National Renewable Energy Programme

​Amaala