Saudi Arabia now has a fast business climate improver that is one of the best in the world based on the report of the World Bank. The ongoing reforms in the country at social and business levels are better for future investors.
Even if the petrochemical industry and construction are the most profitable industries in Saudi Arabia, there are new spheres that have started to develop. Since tourism improved since 2019, they are now open to visitors, and they started issuing tourist visas, removing their archaic public relations. Businesses in events, advertising, and tour operations are now busier because there are many tourists.
If you want to start to invest in Saudi Arabia, you can learn more from here.
Even if you can directly sell to private sectors outside Saudi Arabia, you must employ an agent or distributor in Saudi Arabia. The Saudi law is not allowing the operation of an alien business as a commission agent. The wholesale, distribution and retail trading must be at least 20 million SR foreign investment and 25% with a local partner.
In general, Saudi Arabia seems to be open to foreign investment, and they worked in the past to modernize their country by doing economic and social initiatives. These are international investment, social opportunities for women, employment expansion, and an increase in the role of private sectors. It is worth noting that they have proposed movements to make more jobs for the youth in the future.
To do business in Saudi Arabia, you must have a good knowledge of them. You must be ready to perform extensive research into the business sector you want to be part of. It would be best if you had a proper business plan, which means studying market conditions, competitors, and have a forecast of future results. Be prepared with your investment that comes from your resources or bank and preferably from other means than to apply locally, especially if you do not have a track record in Saudi Arabia yet. Having a competent and credible plan might draw in local support, and possibly from the government.
Foreigners who want to set up a Saudi Arabia business are most likely to gain support from related authorities as long as they can comply with present regulations. Today, companies that do not have a local partner is now allowed to obtain their license for starting a business in Saudi Arabia, and they will have 100% ownership. After you have reserved a company name, you need a license from the Saudi Arabian General Investment Authority (SAGIA).
They have minimum capital requirements, which is based on the kind of company.
Type of companies are:
A new company in Saudi Arabia needs a Commercial Registration (CR). The CR is given by the Saud Ministry of Commerce & Industry that lets you operate activities in Saudi Arabia. These activities need licenses and certificates from the Chamber of Commerce. It is a mandatory documentary that is required with the CR.
Foreign business owners must come to Saudi Arabia to finalize everything after they have completed documents. It would help if you came in once to do an attestation at the Notary. There are few other government registrations that you must complete to form a company your company in Saudi Arabia successfully. Some of them include Labor Office File, Municipality license, General Authority of Zakat and Tax File (GAZT), and General Organization for Social Insurance File (GOSI).
The expat minimum wage in Saudi Arabia is 2,500 riyals, and 5,300 riyals for the Saudi nationals. With the current Saudization process, employers must hire locals, and the number depends on the business category.
Their legal work week is 40 hours, which is 8 hours a day for five days. Their work days are Sunday to Thursday. Even if some businesses start on Saturday and only one day off or they operate six days a week. All companies, public sectors and governmental bodies must have prayer breaks five times a day.
Their corporate law is like western countries; that businesses can have limited liability operations, private companies, or other concerns. As what has been discussed, setting up or buying a going concern can be hard, and you must get legal advice and guidance regarding the formalities of registration. As a foreign investor, you will most likely contact a law firm that is owned by western/Arab. At the point when you are picking, solicit the counsel from Arab-British Chamber of Commerce, Middle East Association, DTI, and the business areas of your consulate.
Usually, western expatriates are very qualified. Otherwise, they will not have work. Their qualifications are checked carefully with the issuing bodies regardless of where they have been obtained. Therefore, Western expatriates occupy the senior positions, and their salaries and perks are commensurate. The workers from Indian sub-continent and Southeast Asia usually have menial, semi-skilled, or unskilled jobs.
Even the ones who have professional qualifications and experience like what westerners have will most likely not have the same benefits. That is because the foreign worker’s remuneration is like what they expect to earn in their home countries. It is higher for westerners. However, this situation is starting to change.
You must contact 3E Accounting if you plan to set up a business in Saudi Arabia so that you will have assistance in the entire process. You can also contact EasyBuySellBusiness if you have other questions. We will know what to do so you can start right away.