If you’re looking for emerging markets in which to launch a startup, perhaps none is as ripe as the Kingdom of Saudi Arabia. Since the KSA joined the World Trade Organization in 2005 and modernized its trade policy to reflect global practice, foreign investment in the country has exploded.
While some trading areas remain off-limits to foreign investors, the Kingdom has greatly expanded investment opportunities for international entrepreneurs in recent years. And, as Saudi Arabia continues to modernize and open its doors to foreign tourism, the area is becoming an increasingly attractive prospect for startup opportunities.
While some barriers exist to setting up a business or startup as a foreigner in Saudi Arabia, such as the need to obtain permits and visas, the government of the Kingdom has also made it increasingly easy for entrepreneurs to set up shop.
Nevertheless, it’s important to check if you need to obtain a permit or visa for Saudi Arabia before planning a business venture in the country. This may vary depending on your nationality and country of residence (for example, see do UAE residents need a Saudi visa?).
Advantages of Basing Your Startup in Saudi Arabia
There are are a number of both social and economic advantages to establishing a startup in Saudi Arabia, including:
- Ease of doing business
- Positive attitude towards foreign capital
- Lack of income tax on foreinger’s salaries in many cases
- Growing diversification away from the country’s oil-dependent economy
- Cutting-edge business practices boosted by the latest technology
- High standards of healthcare and education
- Friendly character of the Saudi people
- Strong focus on family in Saudi culture
- One of the lowest crime rates in the world
- Energy and water
- Mobility and biotechnology
- Food production
- Technological and digital sciences
- Advanced manufacturing
- Media and entertainment
NEOM is part of a long-term strategy to boost international capital investment. Billed as “separate from the kingdom’s existing governmental framework”, it’s a deliberate attempt to remove capital investment from the Saudi public sector.
Deciding on a Market for Your Saudi Startup
There are several opportunities for foreign investors looking to establish a startup in emerging and expanding industries in Saudi Arabia, including in
- Educational services
- Innovating healthcare facilities, equipment, and procedures
- Finance and technology
- The entertainment sector
- Services for religious pilgrims
- Food products and household items
Additionally, as the Kingdom has opened to international tourism as part of its Vision 2030 initiative, there is now a huge market for tourist-related services in the country.
This in turn is also leading to a need to strengthen the transportation industry within the country, meaning more investment opportunities in both sectors.
Examples of Successful Startups in Saudi Arabia
Hundreds of young entrepreneurs have already taken advantage of the favorable conditions in Saudi Arabia to establish a start-up. Some notable examples include:
- ACWA Power – A power generation developer, investor, co-owner, and operator focused on renewable energy. Established in 2004.
- Fordeal – A cross-border purchasing marketplace for lifestyle products in the E-Commerce sector. Established in 2017.
- Lendo – A financial services startup that provides a peer-to-peer lending platform that focuses on debt financing for small businesses. Established in 2019.
- Jahez – A food delivery platform that uses a mobile app to connect restaurants, logistic fleets, and meal orders. Established in 2016.
- Nana – An E-Commerce startup that provides an online grocery delivery service. Established in 2016.
- PayTabs – An award-winning B2B online payments solution provider with a global reach. Established in 2014.
- Red Sea Farms – An AgTech startup that focuses on the use of salt water in enhancing commercial crop production. Established in 2018.
- Salla – A platform that provides guidance on setting up an Arabic E-Commerce business. Established in 2016.
As you can see, these startups have taken advantage of emerging industries such as online grocery shopping, digital payments, and renewable energy development to carve out a business niche in Saudi Arabia. And many of them are now enjoying huge success.
How to Setup a Startup in Saudi Arabia
Once you have decided on the type of startup you wish to establish in Saudi Arabia, you’ll need to start organizing the necessary licenses and permits to allow you to operate in the Kingdom.
While these will depend on the type of business you intend to set up, you’ll generally need to
● Lease a business premises or collaborate with a local service agent
- Obtain an investment license from the Saudi Arabia General Investment Authority (SAGIA)
- Apply for a commercial registration certificate, Articles of Association (AOA), and Memorandum of Association (MOA) from the Ministry of Commerce and Investment
- Hire service providers to assist your day-to-day operations. From language experts who can provide French, Hebrew, and especially Arabic translation services to those that can do your digital marketing, you will need help.
To establish your company in Saudi Arabia, you also need to open a Saudi bank account, get the articles of association notarized, and provive SAGIA with proof of this alongside copies of ID, passport and proof of address for directors and shareholders.
Once all these steps have been taken, and the relevant visa has been obtained, you should be able to go ahead and get started with making your startup in Saudi Arabia a success!
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