Michael Page, an international employment agency, has noticed a surge in executives, particularly in the property industry, looking to relocate as Saudi Arabia unveils projects for entire new cities that could yet eclipse the splashy developments, such as the Burj Khalifa skyscraper, on which Dubai built its name.
"Over the last 18 months, we have seen many high profile leaders in the real estate sector moving from across the world looking to be involved in the giga-projects," said Tom Watson, a partner at Michael Page Middle East.
That's the catch for Dubai-Saudi Arabia's sheer size. At 34 million, the population is more than three times the U.A.E.'s, making it the biggest market in the Gulf by far. Even if Prince Mohammed only succeeds in realizing part of his vision to transform the country, it will have implications for neighboring states, which long benefited from Saudi Arabia being a closed shop.
The island of Bahrain, linked to Saudi Arabia's Gulf coast by a bridge, served for decades as a weekend destination for Saudis and foreign executives looking to catch a movie or concert. With all that now available at home, Bahrain's economy could also feel the pinch. In the U.A.E, weak oil prices and a real estate slump have prompted authorities to rethink residency rules to encourage the large expatriate population to stay through the tough times.
Saudi Arabia was among the top 10 most improved countries in the World Bank's Doing Business report for 2020, having made it easier to start a company, get permits, power and credit and enforce contracts. In 16th place, the U.A.E. still leads the region, but the gap is narrowing.
"There is definitely nervousness about Saudi Arabia's opening in Dubai," Steffen Hertog, a Gulf specialist and associate professor at the London School of Economics, said. "I don't think Dubai will lose its status as the region's primary hub anytime soon as it is so far ahead.''
"That said, Saudi-focused business at least is more likely to relocate to Saudi as social life and bureaucracy get easier there," he added.
That's the case for Golden Scent's Saudi co-founder, Malik Al-Shehab. Back in 2014, he and Froehlich tried to set up their company in the kingdom, which they always saw as their home market. But it was difficult to find Saudi investors and, at the time, Saudi Arabia had tight restrictions on foreign investment. Now those rules have changed, it made sense to come home, Shehab said.
The social measures have also helped. Shehab is now preparing to relocate his family to Riyadh from Dubai.
Early on, Prince Mohammed viewed Dubai as a city built on the back of Saudi Arabia's shortcomings, providing a home for Saudi businesses driven abroad. He imagined his futuristic project of "Neom," a $500 billion city built from scratch, becoming a global center bigger than Dubai.
However, in an interview in 2017, the crown prince dismissed talk of rivalry. "I don't think Hong Kong harmed Singapore or Singapore harmed Hong Kong," he said. "They are creating good demand around each other."
Indeed, many executives say the rise of a new Saudi Arabia, and the new markets it would open up, could ultimately boost the tiny states dotted along its Gulf littoral. That's the line taken by Dubai officials, who've also cast the Saudi transformation as a win-win.
"This is not a story of either/or, it's a story of a combination," said Fadi Ghandour, chief executive of Middle East venture capital firm Wamda Capital, based in Dubai. "The U.A.E. and Saudi Arabia are complementary."
As for Froehlich at Golden Scent, the Dubai apartment will stay. But he's looking for a place in Riyadh too.