As top Gulf leaders vied to commit trillions of dollars in investment pledges during President Donald Trump’s Middle East tour, a significant shift emerged among financiers and business circles. Saudi Arabia’s appeal as the region’s primary investment hub is being overshadowed by the United Arab Emirates and Qatar, whose growing economic clout and more flexible policies are attracting greater international interest.
Saudi Arabia’s challenges stem from structural economic constraints, regulatory hurdles, and a cautious approach to foreign business engagement. The kingdom’s Vision 2030 reform programme, while ambitious, has encountered delays and mixed results, limiting investor confidence. In contrast, the UAE, particularly Abu Dhabi and Dubai, has steadily expanded its financial infrastructure, diversified its economy, and cultivated a business-friendly environment that appeals to global capital.
Qatar’s economic growth, buoyed by its vast natural gas reserves and strategic investments abroad, adds another layer of competition. The country’s increasing global visibility through initiatives in sports, technology, and finance has bolstered its reputation as a dynamic investment destination. Moreover, Qatar’s emphasis on innovation and relatively streamlined regulatory framework has drawn the attention of venture capital and private equity firms.
While Saudi Arabia remains a heavyweight in energy production and has made efforts to open sectors like tourism and entertainment, persistent issues remain. Restrictions on foreign ownership, bureaucratic red tape, and geopolitical tensions in the region have tempered enthusiasm. Investors are reportedly wary of the kingdom’s slower pace in implementing reforms and the uncertain regulatory landscape, factors that influence risk assessments and capital allocation decisions.
Bankers and dealmakers indicate that the UAE’s stable governance, transparent legal systems, and active promotion of free zones continue to be significant advantages. Abu Dhabi’s sovereign wealth funds, alongside Dubai’s status as a global trade and logistics hub, offer diversified opportunities not as readily accessible in Saudi Arabia. These factors have shifted deal flow and capital movement towards the Emirates.
The dynamics between the Gulf states reflect a broader trend of economic diversification and competition for global investment dollars. Each country aims to leverage its unique strengths: the UAE with its cosmopolitan financial centres, Qatar with its resource-backed innovation drive, and Saudi Arabia with its vast scale and reform ambitions. However, the gulf between rhetoric and on-the-ground realities is increasingly apparent for Saudi Arabia.
Some international investors have expressed frustration with the slow bureaucratic processes in Saudi Arabia, citing examples where permits and approvals have taken significantly longer than in neighbouring countries. Additionally, the kingdom’s social and cultural restrictions create a less open environment for expatriate professionals and foreign businesses compared to the more liberal UAE.
This environment has prompted some multinational corporations and financial institutions to adjust their regional strategies. Investment portfolios are being recalibrated to focus more heavily on opportunities in Abu Dhabi and Doha. The UAE’s success in hosting global events and establishing itself as a gateway between East and West reinforces its appeal, while Qatar’s expanding sovereign funds and infrastructure projects draw considerable interest.
Saudi Arabia’s leadership recognises these challenges and has announced efforts to streamline regulations and enhance transparency. New initiatives aim to attract foreign direct investment and improve the ease of doing business. Nevertheless, experts highlight that fundamental changes in governance and market openness are essential for Saudi Arabia to reclaim its position as the primary Gulf investment hub.
