Are you on the lookout for Saudi business opportunities? There could not have been a better time, as Saudi’s economy continues to rapidly expand. It was the Middle East’s largest economy in the 2022, and continues to pursue further growth as part of its Vision 2030 aspirations.
In order to leverage the plethora of opportunities in Saudi Arabia, it is important to understand its business landscape. The following is an essential guide, to better prepare you for a potential new business venture in Saudi.
Ease of doing business
In recent years, Saudi Arabia has made great progress on the World Bank’s Ease of Doing Business Report. In the 2020 edition, Saudi secured the 62nd position out of 190 countries.
This is a testament to the efforts and reforms undertaken by the Saudi government to enhance its competitiveness as an investment hub. For example, the following reforms have contributed to an improved business environment in Saudi:
- Starting a business. It is now easier to start a business in Saudi Arabia. Thanks to ‘one-stop shop’ business centers that assist aspiring entrepreneurs and investors before and after registration. Additional documentation requirements for married women applying for a national identity card have also been eliminated. Accordingly, it is now easier for women entrepreneurs to set up businesses in Saudi.
- Securing credit. The introduction of a secured transactions law and a new insolvency law have significantly bolstered access to credit, giving entrepreneurs and business owners a financial helpline to grow their business.
- Trading across borders. Import-export is now faster with an improved electronic trade window, a new online certification platform, and upgraded port infrastructure across Saudi Arabia.
- Enforcing contracts. Enforcing contracts has been made easier with the publication of court performance measurement reports and information on the progress of cases.
- Resolving insolvency. A new process is in place for debtors to restructure loans. It supports business continuity and boosts contract management during insolvency.
Factors to consider
You must have a thorough understanding of legal structures in Saudi Arabia. It will provide a strong foundation for doing business in Saudi. Among the things you must study are the regulations surrounding business operations, as well as specific laws and restrictions depending on the type of business you have.
In addition, you must be aware of the rules for partnerships and foreign investments. The Saudi Ministry of Commerce and Industry provides a comprehensive list of regulations and laws for businesses on its website.
Saudi’s thriving economy and stability are some of the key factors that have led to the emergence of new Saudi business opportunities. Key indicators, such as inflation rate, vastly influence operational expenses and profits. Furthermore, consumer spending and confidence contribute to shaping the local economy and business landscape.
Moreover, these factors also directly influence product and service demand, reflecting market health and shaping business opportunities in Saudi Arabia.
Saudi business opportunities
Saudi Arabia provides a conducive environment and a plethora of opportunities in many business sectors, including:
- Renewable energy. This sector is ripe with business opportunities as Saudi aligns its energy policy and overall economy with sustainable practices. For example, Saudi Arabia plans to generate 50 percent of its electricity from renewables and the other half from gas by 2030.
- Tourism and hospitality. Tourism is poised to become a key driver of Saudi Arabia’s diversified economy, aiming to contribute at least 10 percent to its GDP and target 100 million visitors annually by 2030.
- Information, communications and technology. The size of the information and communication technology sector in Saudi Arabia amounts to SAR154 bn ($41 bn), which constitutes 4.1 percent of its GDP. Further investments make this sector ideal for new ventures.
- Real estate. Experts estimate Saudi’s real estate market to grow in market value to SAR352 bn ($94 bn) by 2028, providing a wealth of new opportunities for startups and investments in this sector.
Company formation tips
Starting a business in Saudi Arabia can be a rewarding venture, but it requires a thorough understanding of the process. Elsewhere on this site, we have outlined the steps you need to take to set up a new business in Saudi. But the following process provides a quick overview:
- Choose the industry and business structure.
- Submit the essential documents.
- Understand Saudi Arabia’s corporate rules.
- Select a trade name.
- Get the required approvals.
- Look for a physical office.
- Obtain government approvals.
The initial cost of setting up a business in Saudi Arabia is approximately SAR56,000 ($15,000), which includes company incorporation, setting up corporate bank accounts, and government fees. After the first year, annual expenses are projected to be around SAR27,800 ($7,420).
Ready to get started?
While the process of establishing a business in Saudi Arabia is intricate, it can be effectively managed by adhering to the specified procedures. In addition, there are company formation specialists that you can tap to help you get started.
Saudi business opportunities abound; they are just waiting to be tapped by enterprising individuals and companies eager to enter its rapidly growing economy.
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