How easy is it to start a new business in oil-rich Saudi Arabia?
Saudi Arabia is one of the most oil-rich countries of the world. Apart from its status as being an oil-rich country, it is also seen as a conservative and religious country. Saudi Arabia is the largest exporter of oil and the second largest producer in the world. However in recent times due to the dipping oil rates, Saudi Arabia has started expanding its industrial base.
The country wants to put a minimum dependency on oil and develop other industries to boost its economy. This has opened up the gates for foreign investment in the country. However all said and done, the question remains that how easy it really is to start a new business?
The Saudi Arabia business directory is heavily loaded with companies that are directly into oil supply or related to oil supply. Apart from these Saudi Arabia also earns revenues through agriculture and other industries as well. Since the mid-1990s Saudi Arabia has opened its gates to foreign investments, however, there were still a number of restrictions. It is now that the changed regime has sought a more active involvement of foreign companies into Saudi Arabia.
Starting a Business in Saudi Arabia-.
Saudi Arabia has slowly started to feel the heat of a depleting economy and hence is looking at other avenues to boost its economy. Saudi Arabia wants to break free from the over-dependence on oil revenues and help other sectors contribute their share. While starting a business in Saudi Arabia can be tempting, you must indulge in extensive research before taking any decision.
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1) Choose your industry:.
Saudi already has a long list of petroleum companies. The Saudi Arabia company list is full of companies that are related to petroleum in some way or other. The Saudi government has in recent times allowed more subsidies and cuts in taxes for businessmen looking to invest in other industries. Your first and foremost research should be based on the viability of your product in the country. Keep in mind that Saudi follows a strict practice of the Islamic religion and anything that is.
Considered unislamic will be immediately shot down. Hence do not choose something that will not see the light of the day. There is an increased demand among Saudi Arabians to learn English and as such English language tutorials or institutes could be a profitable proposition.
2) Decide on your investment:.
Take into consideration the investment option. Depending on your chosen industry research as to how much finance will be required. If you are a multinational company you can consider a high-value investment in the country, however, for small-scale operators do not start off with a heavy financial burden. Though there are laws in place, Saudi largely works on Islamic laws and the King remains the ultimate authority. In the larger run, there could be changes in laws overnight. Hence.
Start off with smaller investments.
3) Look for a local partner:.
It is mandatory for you to have a local partner who holds a majority of the shares in the company with zero or limited financial investment. This may seem like a biased law but is a law after all. Although now reforms have been made to give foreign investors’ 100% ownership still while starting off, you will need a local partner. For a small time business person, this is a good option as your partner will most likely know all the formalities to be completed. He would also know the way to work around any problems that may arise in setting up the business. You can get a directory of companies in Saudi Arabia to look for an apt partner. It is more advisable to partner with a company rather than an individual as the company will already have a professional set up.
4) Hire a lawyer:.
One of the most crucial aspects of starting any business is hiring a lawyer or a law firm that specializes in this. You can get the contact details of law firms from database companies that will give a list of companies in Saudi Arabia which specialize in business setups. This is important as the contract that you draw with your partner company will be in Arabic. You will need a copy in English to make sure there are no ambiguous terms that may cause problems later on.
5) Complete all legal formalities:
You must complete all legal formalities as prescribed by the laws. There are quite a few unofficial businesses running in Saudi Arabia and earning a profit too, however, do not fall for that trap. Register and go through the process however tedious or time-consuming it may seem. The laws are strict in Saudi and you do not want to be caught on the wrong side of it. You can also search for Saudi companies list that has faced the wrath of the government for non-compliance..
6) Connect with local Chambers of Commerce:
The local chambers of commerce are the best to seek advice from. They will not only guide you with the names of potential partners but also furnish email addresses of companies in Saudi Arabia to initiate communication. This also ensures that you are directed to the right set of companies.
7) Know the laws:.
Lastly, once you have your business set up, you need to know the laws that govern the everyday working. Saudi Arabia has a revered position amongst the Islamic states of the world and follows a strict religious code. Adhere to their work timings and weekends. Consumption of Alcohol and Pork are strictly prohibited and Saudi is not very receptive to western ideologies. Hence keep yourself contained till business matters only.
The World Bank’s Business Report 2010 states Saudi Arabia as the best country for registering a property and the 11th best for overall ease of business. With an extremely low crime rate and high subsidies, Saudi Arabia is one of the best countries to start up a business.