INVESTMENTS IN NEOM – MAGNET FOR INVESTORS

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The more ambitious the project is, the more it requires financial support and investments. Not surprisingly, investments in NEOM, even according to the most conservative estimates, will require at least $ 500 billion. This amount will only increase as we approach the year 2030. Of course, the potential of Saudi Arabia is huge but still will need to attract investors to implement such a large-scale plan.

Where to find them and how to attract them? In fact, the international practice of cooperation in terms of investment already has a well-established tradition, so that the Neomean society will adopt world trends. Moreover, the main directions for the implementation of commercial cooperation in this region are fully presented.

This includes tourism potential, development, and technological innovation. So, let’s talk about this important topic for any project.

International investment experience

The ability to invest money profitably is the highest degree of development of a person’s financial literacy. As a rule, the path of a future investor begins with the acquisition of professional skills and the development of his own business. Further, a person conceives the need to diversify risks and redirect his savings to other areas not related to his main business or work.

So, investors appear who comprehend this science, honing their skills. Of course, investments in NEOM will offer a variety of investment options given its natural potential and technological prospects. By the way, you can read about them in our articles: NEOM – Natural potential and wealth, as well as NEOM – The world of robots.

In most cases, investors either pay attention to traditional investment options, for example, banking products, precious metals, and real estate, or experiment with innovative startups, IT projects, and play in the cryptocurrency market. Most likely, the economy of the NEOM metropolis will develop in all ways.

Buying real estate in the metropolis NEOM

Following the example of the UAE or Singapore, branches of international banks can be opened in the city, which will complement local financial institutions. Already, 30 large banks are actively operating in Saudi Arabia, of which 13 are local and 17 are branches of foreign banks.

Residential and commercial property will also be in demand, given the abundance of tourists and expats. This is due to the advantages of this type of investment, including its reliability and return on investments in NEOM.

Firstly, housing will never hurt the owner himself, given the growth of his family. If not for him personally, then the children will definitely need it.

Secondly, renting apartments, houses, offices or warehouses makes it possible to receive a long-term and stable income that is not associated with the main place of work or business.

Thirdly, real estate prices tend to rise, increasing its value and thus making a good headroom for the future. Investments in real estate provide profit not only in the case of the lease but also resale, which is important in the Neomean project, which will attract more and more attention from the world community every year.

In European countries, as well as on the territory of the post-Soviet space, is investing in foreign real estate actively promoted. There is an undoubted bonus to it – the opportunity to obtain a residence permit in the selected country. Turkey, Spain, Portugal, Germany, Montenegro, and Poland are very popular.

Some Asian countries, such as Thailand, are no less popular. With the opening of the borders of the country, Saudi Arabia has every chance of becoming a priority player in the international real estate investment market. To estimate this parameter at least a little, we present the following indicator.

Residence permit for investments in NEOM

The total volume of investments in overseas property for six months is approximately $ 341 billion. That shows the readiness and desire of wealthy people to invest their money in the economy of other countries in order to derive mutual benefit.

For example, in order to obtain a residence permit in Spain, an expat needs to invest at least $ 500,000 in local real estate. A residence permit in Thailand will be cheaper – $ 300,000.

An even more elaborate system is in Portugal, which has introduced a whole price list for various types of investments. A residence permit in this country can be obtained in a number of different ways – real estate investments – from $ 500,000, research and development – $ 350,000, new startups – $ 350,000, development of cultural or natural potential – $ 250,000, support of local funds – $ 350,000.

It is up to the individual to decide what is the most suitable way of his investment. Given the desire of the Neomeans for a new technological revolution, which can be read about in our article NEOM – Science and innovation many science enthusiasts will want to be at the forefront of this trend.

High-yield investments in startups are very popular in developed countries.

This type of investment allows you to get super-profits but can carry significant risks. According to statistics, less than 10% of startups are successfully developed, while the rest burst like soap bubbles.

These are so-called high risk investments. In the event of bankruptcy, it is unlikely that the founders of a startup will be able to compensate depositors for their losses. On the other hand, if the project is successful, the investor’s profit can reach huge amounts. It resembles a lottery or roulette.

It is in the state’s interest to support new businesses and investments, providing them with certain guarantees. Therefore, the Saudis have begun to implement programs to attract the attention of the world community.

Investment in Saudi Arabia

As part of the promising VISION 2030 program for the development of Saudi Arabia, ample opportunities are opening for the injection of foreign capital into the local economy. Moreover, the kingdom is a member of the G20 – the top twenty most developed economies in the world.

Realizing its prospects, the Arabian government is taking decisive steps towards increasing the investment attractiveness of the kingdom. For example, in 2015, the TADAWUL, Saudi Stock Exchange was opened. It is considered to be the largest capital market in the Middle East and North Africa. Since 2017, the Saudi parallel market NOMU has emerged.

More than 240 mutual funds (Open-End Fund), 3 exchange-traded investment funds (ETF), and 17 real estate investment funds (REIT) are traded on the Kingdom’s stock exchange, which once again proves the prospects of this direction.

193 companies have been listed on the Saudi Arabian stock market. Their shares are included in both, the main TASI index and the NOMU small-cap index.

At a conference on future investment initiatives in Riyadh, Crown Prince Mohammed bin Salman announced that the first phase of projects aimed at strengthening the investment potential of Saudi Arabia will be completed by 2025.

It is then that the tourism infrastructure will be complemented by research and development centers that will attract the most talented scientists and inventors from around the world, as well as people willing to invest in technology development.

A significant place in these plans is occupied by investments in the NEOM metropolis and the luxury resort destinations AMAALA and the Red Sea Project.

Attractiveness for the NEOM project Investments

Let us move on to the most interesting part of this publication – to the investment prospects of the Neomean world. According to the organizers of this project, great attention, especially from 2025, will be paid to high technologies, robotics, the IT industry, genetic engineering, nanotechnology, and biomedical research. This market is already becoming attractive to investors from all over the world.

In almost all developed countries, the nongovernmental sector accounts for a significant portion of research investment. For example, in Austria, private individuals provide 62.3% of science funding needs. About 15% of the budget is foreign investment. In countries such as Japan, Denmark, Canada, and Finland, approximately 20% of the research share belongs to the private sector.

Even some emerging economies have adopted the trend of attracting private investors to the development of science. For example, in China and Georgia, the state provides only 20% and 40% of the total number of studies, respectively.

This is completely justified and fair because the achievements of science should be not only speculative but also have a specific application. Engaging business helps to make research more pragmatic and more realistic.

In the NEOM metropolis, technological innovations will be significantly introduced into the life of society, so that investment will fulfill a double function – increasing scientific potential and simultaneously generating profit.

Investments in science and technology

In fact, there are enough examples of successful interaction between the private sector and government research centers to make sure that such collaboration is effective. Back in 2008, the private firm Space X signed a contract with NASA on joint launches of carrier rockets. It is believed that space exploration will be greatly simplified by attracting a business community.

In addition to Elon Musk, Amazon founder Jeff Bezos plans to explore the moon, and the owner of the Virgin Group, Richard Branson, also has space ambitions.

Technological revolution at NEOM

It is possible that the opportunity for investments in the NEOM metropolis will also attract the attention of the richest people on the planet who want to invest in genetic engineering, biotechnology, robotics, and the improvement of artificial intelligence.

Moreover, the existing bans on many progressive types of research in countries around the globe, especially those related to the human genome, noticeably slow down the scientific and technological revolution in the world.

If the Saudis really give the green light to all science enthusiasts, then the significance of the NEOM project for humanity will be difficult to overestimate, not only in terms of tourism and culture but also in the terms of realization of scientific potential.

Most likely, within the framework of the “smart” city program, about which you can read in more detail in our article NEOM – Management and administration, where the main advantages of the correct management decisions are described. If the authorities show wisdom and flexibility regarding the private sector, the prospects for the development of the Neomean world will not only be fantastic, but truly fabulous.

Already at the planning stage, the metropolis attracted the attention of all progressive humanity. As the project development continues, there will be even more people willing to invest in its development.

Saudi Arabia has taken a confident course towards integration with the world community, and this process will intensify and gain momentum so that investments in NEOM will only increase.

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