The Kingdom of Saudi Arabia (KSA) has emerged as a global business hub of innovation and entrepreneurship. The innovative agenda of Saudi Vision 2030 revolves around the three pillars - a vibrant society, booming economy, and an ambitious nation. The initiatives under Vision 2030 have opened up numerous business opportunities in the country across diverse sectors. If you are looking to start a small business in Saudi Arabia, this blog is for you. Read on to know more!
Back to topProcess of Starting a Small Scale Business in KSA for Expats
If as an expat, you are planning to invest in a small scale business in Saudi Arabia, understanding the involved process is important. Mentioned below are the steps:
Step 1: Select Business Idea
The first step towards starting a small business in Saudi Arabia is to identify a good business idea. Select the product or service that your business will focus on after conducting thorough competitor analysis and market research.
Step 2:Decide on the Business Structure
The next step is to choose the business structure that suits the nature of your business. Expats can choose among business structures such as sole proprietorship, representative office, joint ventures, limited liability company (LLC), and branch office.
Step 3: Obtain Initial Approval
The third step is to apply for an entrepreneurial license in Saudi Arabia. In addition to that, you also have to obtain an initial approval from the Ministry of Investment Saudi Arabia (MISA).
Step 4: Register with the Ministry of Commerce (MoC)
Once the above mentioned steps are completed, you need to register your business with the MoC. It requires submitting necessary documents such as the business plan, incorporation certificate, contact details of investors, and company bylaws. You must also register your business name in the MoC portal.
Step 5: Open a Bank Account
Expats need to open a local bank account to legally operate their small business in Saudi Arabia. With top banks in Saudi offering services suited for foreign entrepreneurs, all you need to ensure is having the right documentation and proof of registration. It will help in opening the bank account without any hassle.
Step 6: Register for Zakat and VAT
Next, you need to register the business for Zakat, which is an Islamic tax with the ‘Zakat, Tax and Customs Authority (ZATCA).’ The business also needs to register for Value Added Tax (VAT), if they cross the set revenue thresholds.
Step 7: Obtain Business License and Additional Permits
Finally, you must obtain the business license from MISA and additional permits from government authorities based on the sector you serve. For example - If you want to start a healthcare business you may need to avail an additional permit from the Ministry of Health.
Back to topWhy Expats Choose to Set up a Small Business in Saudi Arabia?
Business setup in Saudi Arabia is being preferred by global entrepreneurs due to its stable economy and diversification initiatives. A favourable business ecosystem is provided for both large-scale and small investment in Saudi Arabia. Let us look at some other reasons why expats are choosing to set up a small business in Saudi Arabia:-
Complete Ownership
Foreign entrepreneurs can now invest in Saudi Arabia across diverse sectors and claim 100 percent ownership without the need of having local partners onboard.
Strategic Location
The strategic location of the country is ideal for setting up all kinds of businesses as it acts as a gateway to three different continents namely Asia, Europe, and Africa.
Financial Incentives
Access to government funding, easy regulatory procedures, tax incentives, and presence of special economic zones in Saudi Arabia play a crucial role in drawing expats to set up small scale businesses.
Digital Transformation
With the kingdom undergoing a rapid digital transformation with advanced digital services for business registration and setup process, entrepreneurs are drawn to the country.
Growing Opportunities
The economy is rapidly growing due to the diverse business opportunities in Saudi Arabia. A chance to invest in booming sectors such as ecommerce, retail, food and beverage, tourism, hospitality, and educational services acts as a ‘catalyst’.
Back to topWhy Commitbiz?
For expats planning to set up a small business in Saudi Arabia, it is an ideal time. The government’s initiatives towards diversification and foreign investment is encouraging entrepreneurs to launch all kinds of businesses. If you enter the Saudi market today, you can position yourself for long-term success in the Middle East. Contact us today if you are an expat planning to start a small scale business in the region. Our experts at Commitbiz can help you with hassle-free small scale business setup.
Back to topCan I use a trade name in English, or should it be in Arabic?
English trade names can be registered, but they need to be translated into Arabic, particularly for official documents and signatures. According to the Ministry of Commerce standards, Arabic must be used extensively on shopfronts and marketing materials.
How do I protect my brand or intellectual property in Saudi Arabia?
You can protect your brand or intellectual property by registering with the Saudi Authority for Intellectual Property (SAIP).
Can I open multiple branches in KSA?
Yes, you can open more branches after you are granted the primary license . Every branch needs to be registered with the Ministry of Commerce and adhere to local zoning regulations and permissions.
