Setting up a business in Saudi Arabia brings about an exciting opportunity and challenge for a foreigner. From geographical location to an agile economy and visionary ambitions through its Vision 2030, this kingdom comes as a splendid platform for international entrepreneurs or non-Saudi investors. The process of setting up a business in Saudi Arabia requires proper insight into local regulations and industry-specific requirements, besides a feel for the local culture. Here we address the complexities associated with the formation of companies in Saudi Arabia and identify major issues facing foreigners who wish to establish their presence within this dynamic market.
1. Understanding regulatory bodies
Your first contact will be SAGIA- Saudi Arabian General Investment Authority. The body is responsible for FDI attraction into the Kingdom. You should understand their regulation and comply with them.
2. Sectorial regulation
Priority is given to innovative and knowledge-based industries. If you can justify that your business will either bring value addition or technology transfer to the Kingdom, you can easily open a startup.
3. Recent Regulatory Changes
The recent easing of rules for innovative firms can be helpful. You have to determine if you meet new regulations by considering whether you have or are going to get a patent, or if you are going to export products/technologies.
4. Location Considerations
Choose the location for the start-up wisely. Saudi Arabia has several economic and industrial clusters like NICDP and KAEC. Techno-valleys—Dhahran Techno Valley, DTC, and Riyadh Techno Valley, RTV—offer very good environments for start-ups. They are most often associated with university technology transfer offices and industrial collaboration programs.
5. Saudization Requirements
All businesses have to comply with Saudization rules to make a certain percentage of the workforce Saudi nationals. This number is increasing to 75%. A Saudi co-founder can help ease compliance and can make an entry easier into the market.
6. Need for a Saudi Co-founder
A Saudi cofounder will deliver not only local market knowledge and networks but also an understanding of the intricacies of the local environment. This means using events like Riyadh Startup Weekend or Arabnet Conference to build your network and find a suitable partner.
7. Incubators and Accelerators
Depending on the phase of your startup, there are various incubator and accelerator programs. Among them, the most prominent are BADIR Technology Incubators and Oasis 500. These two programs support foreign entrepreneurs with a Saudi founder on their board. The government-backed tech initiatives may flex a little if you can prove long-term value to the Kingdom.
8. Localization
First of all, you need to localize your business. Consider local resources and industrial capacities available, the workforce, and the presence of universities and multinationals. Understand the needs of the local market by seeing what kind of business can help provide what is locally not available.
Analytix can help you set up your business in Saudi Arabia.
Analytix can help you ensure overall success in the dynamic and fast-moving Saudi Arabian business landscape. Drawing on years of experience as your on-ground partner in international business setup support, we are one of the leading business and management consultancy firms dedicated to helping businesses enter the Kingdom, led by highly professional experts who help establish, incorporate, expand, and grow your business.
We offer complete solutions much beyond Business Incorporation. From accounting and bookkeeping to taxation and auditing, and GRO and PRO services, we cover every aspect integral to the smooth functioning of your business. Analytix brings in the professional expertise and resources needed to help you navigate the business environment in Saudi Arabia. With Analytix at your back, any foreign entrepreneur will be sure to succeed in establishing and growing a business within this thriving landscape.
Conclusion
We’re glad you’re here!
Did you enjoy reading our blog?
Hopefully, by now, you have a much better view of the challenges and considerations that exist for a non-Saudi when setting up a business in Saudi Arabia. From regulatory bodies to rules of Saudization, searching for a Saudi co-founder, and localization of your business, it’s quite a journey.
However, if you feel we have missed something or if you have any questions, let us know in the comments.
Happy reading!
- FAQs
Frequently Asked Questions
If your question is not addressed here, please feel free to reach out to us. We value your inquiry.
Can a non-Saudi start a business in Saudi Arabia?
Yes, it is absolutely possible for a non-Saudi to set up a business in the Kingdom of Saudi Arabia. The government of Saudi Arabia has presented various reforms and plans to attract foreign investors to the kingdom and facilitate non-Saudi to start their businesses in the country. However, the investors should obtain necessary licenses and permits from the relevant authorities like SAGIA (Saudi Arabian General Investment Authority).
Can a foreigner own 100% of a business in Saudi Arabia?
Yes, a foreign national can own 100% of a business in Saudi Arabia. The Kingdom recently changed the regulation governing the operation of foreign investment and is now permitting complete ownership for foreign investors in all sectors other than the exempted. The reforms are part of Saudi Arabia’s diversification plan through Vision 2030 to encourage foreign investment in the country. But it is also important to make sure that there are certain requirements for particular industries as some of the restrictions can be seen in such spheres.
