Why Expanding into Saudi Arabia Should Be on Your Radar?
Saudi Arabia is the largest economy in the Gulf region and is fast becoming a top business destination for foreign investors. Recent regulatory changes have opened up the Kingdom to foreign companies unexpectedly, making this once closed-off economy accessible to all. That is why entering Saudi Arabia has now become easy. Companies from the region and the world are now starting to realise the big opportunity and fundamental changes happening in the Saudi market and are deciding to set up locally. Listed below are the top reasons why expanding into Saudi Arabia should be on your radar.
KSA’s Favourable Vision 2030 to Boost the Economy:
KSA’s Vision 2030 includes many economic goals and reform strategies to build a thriving economy for the Kingdom’s long-term economic success. To achieve a thriving economy, the Kingdom plans to diversify its economy and create dynamic job opportunities through entrepreneurship and innovation.
Vision 2030 is reorienting the Saudi economy from petrochemicals to a more diversified, private sector-led structure backed by many new government initiatives and projects seeking top international vendors.
The Saudi Vision 2030 includes:
A strong emphasis on increased private sector involvement and investment with a particular focus on healthcare, housing, energy, and municipal services.
The privatisation of several government businesses.
The development of various industries and non-oil sectors.
developing the retail and trading sector to create a million jobs through the easing of foreign investment restrictions.
The development of telecommunications and information technology infrastructure, including high-speed broadband.
The creation of a regional logistics hub with interlinked, cross-border infrastructure.
Enabling atomic energy as well as renewable energy to contribute to the national energy mix.
Low Local Competition:
The consumer population is underserved locally with pent-up demand for different services due to high historical barriers to enter the market. With the local competition now relatively low, there are many opportunities to scale up your business in the Saudi market.
100% Foreign Ownership:
As part of the wide-ranging transformation in the Kingdom, the Saudi government has opened up 100 percent foreign ownership across varied industries. Therefore, business operation in Saudi Arabia has become easier via the Ministry of Investment of Saudi Arabia (MISA).
With many sectors now open for 100 percent foreign ownership and with no minimum capital requirements, KSA is witnessing a growing number of businesses interested in expanding into the country.
High Priority to Attracting Foreign Investment:
In February 2020, the Saudi Arabian General Investment Authority (SAGIA) became the Ministry of Investment of Saudi Arabia (MISA), elevating its status to a ministerial level. This change reflects the high priority placed by the Saudi government on attracting foreign investment into the Kingdom.
The priority is to attract diverse and integrative industries to increase the number of value-added manufacturing and transformation products.
MISA is the Kingdom’s investment promotion agency that facilitates the entrance of investors into the country. It also issues licenses to investors.
The government has launched a unified licences service for foreign investors. The time needed for new business licences has been reduced from 19 days to just 1 day.
Business-Friendly Government Initiatives:
The Saudi government has assigned several authorities to prepare a list of initiatives and specialised services to enable Saudi entrepreneurs to expand and go global.
The government initiatives include development funds, such as Industrial Fund to support projects in the industrial sector, Agricultural Development Fund, National Development Fund, Human Resources Development Fund, and Social Development Bank. Saudi Arabia’s development funds aim to:
provide direct and indirect loans
provide employment support and training programs to beneficiaries to work in the private sector
create lending programmes for micro and small enterprises
provide financing support to small- and medium-sized health facilities
finance indirect lending programs through financial institutions
Currently, the government provides many support services to Saudi businesses to partner with foreign investors and sell franchises abroad.
In the current unprecedented times, being an early entrant into an emerging market gives any company an overwhelming head start.
While competitors are withdrawing due to the uncertainty around the coronavirus pandemic, this is a unique opportunity to leverage the first-mover advantage by improving market share and profitability over a long period.
Given all of the above reasons, expanding into Saudi Arabia should be on your radar. However, setting up a company in Saudi Arabia is a complex and time-consuming process. It involves several steps at multiple government authorities and ministries level. So, it is best to seek professional help from business setup consultants like Creative Zone.
Our specialised team can navigate through the entire setup process quickly and seamlessly. It can effectively manage third parties and fulfil all requirements needed to help your company expand into the Kingdom. Once your company gets established, our team of business setup consultants will be able to guide you through the post-setup operations, enabling you to have the best start to your business in Saudi Arabia. Call us at 800 LICENSE (5423673) to speak to one of our advisors and get started today!