Today starting a business in Saudi sounds like it could actually be a thing and that feels exciting. The transition from a traditional reliance on oil to a private innovation in almost every sector has transformed the Kingdom. For locals and for foreigners, now is the moment to jump into new business ideas, to bring new solutions to market and become a part of the country’s economic future.
Saudi Arabia is ready to support the entrepreneur, as stated in Vision 2030, the national reform plan. Registration has been streamlined as a process of registering a company, rules for the foreign investment have been introduced and the more sectors are being opened for the private ownership. Whatever your business idea, whether you want to open a café, start a tech startup, or invest in real estate, there is a route for you, and in Saudi Arabia.
Tech Savvy Audience for Business in Saudi Arabia
The Saudi market really does have a lot of energy at the moment. Saudis are young – more than half the population is under 35 – and tech savvy, with high smartphone take-up and a growing desire for digital services. People are willing to accept or try anything that can help improve their lifestyles a bit. If you’re providing a useful, convenient or exciting thing, then there is a ready audience for what you’re offering.
Saudi Arabia has also made a lot of effort to facilitate the creation of a business within its territories. Long waits and paperwork filled by hand are no longer a requirement; things can be done online in the space of a few hours. Whether you are registering an organization or applying for the commercial license, there will be very few old roadblocks which stood before.
Know the Basics
Generally before you dive in you need to get a feel for the rules and systems in place. The activities of business in Saudi Arabia are regulated by the Ministry of Commerce. For foreigners, the Ministry of Investment (formerly called SAGIA) will also need to be involved. These are the contact government bodies where you apply (seek licenses/approvals) and you (register) your company.
However, the majority of people opt for starting up their venture in the form of a Limited Liability Company (LLC). The structure here is a flexible and accepted one. It is a great alternative for small to medium sized businesses and allows to evolve. Other choices include being an international company with a branch office or sole proprietorships. Things became even more attractive since foreign entrepreneurs can now own 100% of their business in Saudi Arabia in a lot of sectors. However, some industries are one that still need a local partner, so it is good to do some research or get help from a legal expert.
How to Get Started
The first thing that you need to decide is what kind of business that you want to start. Depending on what you act, what licences you will need (or not need) and what approvals you will need (or not need) will depend. Once you have made that decision, you need to choose a company name and register with the Ministry of Commerce’s online portal.
Secondly, you’ll make an application for your Commercial Registration (CR). It is the document that officially puts your business in play. You also will need an investment licence from the Ministry of Investment if you are a foreign investor. It consists of the exchange of a few documents (in most cases: a business plan, an identification proof, and some financial information).
Then you register your business with the tax office and, if you’re employing staff, with the social security office and the Ministry of Human Resources. You’ll also need to open your business bank account, and need your CR for that as well. Also, if your business in Saudi Arabia is of a certain type such as food service, healthcare or construction, you may require additional permits from the local or national authorities.
Finding Where You Can Get Help and Get Funding
Fortunately, that is just one of those things that makes a lot of people feel uncomfortable and is not totally your fault. Several government programs help people start a business in Saudi Arabia. They also include grants, soft loans as well as training support. For example, the Social Development Bank provides loans to the small and micro businesses. Human Resources Development Fund helps in hiring and getting the required training. There are support also in the Saudi Industrial Development Fund for manufacturers and industrial projects.
Also, the number of business incubators and startup hubs across the country continues to grow. There are programs such as Flat6Labs, Misk Foundation and Badir to get new businesses off the ground with mentorship, office space and sometimes funding. I don’t know how else to put it but if you’re starting a tech startup, digital something these resources can supercharge your progress.
So, What Type of Business Should You Start?
Choosing an industry to start a business in Saudi Arabia is soothed by the fact that there is one of its kind of business in Saudi Arabia where that business is needed by now or expected to be needed in the near future. Such projects as NEOM, The Red Sea Project, and AlUla, plus new visa options, have led to a boom in tourism at the moment. Now is the time if you have an idea around travel, experiences or hospitality.
Tech and digital services are also red hot. Whether it is e-commerce, mobile apps, fintech, delivery solutions, there is a demand for smart and user friendly services that make things easier. A lot of young people like to shop online, pay online, and they want things quickly, delivered. If you manage to build something in this space your business in Saudi Arabia might grow really quickly.
Lookout for renewable energy as another area. Solar and wind power receive heavy investment in the country and they are looking for companies who can contribute to this vision. And, as usual, health, education, food delivery and entertainment remain strong markets with room to new additive players.
Respect the Culture
Saudi Arabia is modernizing at a rapid pace, however, it is important to remember and adhere to the customs and value system of the local culture. It takes time for building trust and it still matters having face to face relationships. People tend to begin casual conversation when entering the room before tackling the real business matter. And being polite, respectful and, most importantly, being well prepared will always leave a good impression.
Be dressed modestly and professionally and be aware of the working week, which goes from Sunday to Thursday. Friday is a day of rest to pray. Work hours are cut and the pace of business slows when it’s Ramadan, so go in accordingly.
While most business professionals speak English, it can be incredibly helpful to learn a few Arabic phrases (or have someone fluent with you) in the case that you encounter government offices or local clients.
Final Thoughts
It is no longer the dream for the few to launch a business in Saudi Arabia. Now, with a good idea, a little bit of planning, and some local know how anyone can get started on something meaningful and surprisingly successful. The market is full of potential, the people are waiting for new products and services, and the government is willing to support you too. First, understand the rules and select your sector well and then reach out to support programs. Follow Know Saudi and be prepared to adjust how you work and behave to not only respect the culture, but also do valuable work. If you do, your business in Saudi Arabia won’t just survive; it could actually thrive.
