Now is the prime economic time to establish a trading company in Saudi Arabia if you aspire to success. The country, and especially its capital Riyadh, offers the best benefits through government regulations and facilities. This country offers a great commercial, labor, and economic infrastructure to attract foreign investment.
In this article, let us show you how to start a business in Saudi Arabia and the advantages of it. In addition, you will know the establishment costs, as well as the capital you must have depending on the type of entity established.
Why Choose Saudi Arabia for Your Trading Company?
As a foreigner, some key advantages will help you start a trading company in Saudi Arabia. Likewise, some organizations show interest in doing business in the country, looking for people who want to invest and establish their ventures.
Ease of doing business
In terms of ease of business, Saudi Arabia occupies one of the privileged positions among developed countries. Therefore, it is a good sign for companies or organizations currently operating in the largest of the Gulf States.
Nationalization efforts for privatization
In recent years, Saudi Arabia has experienced business model changes resulting in increased privatization and national corporations. Likewise, consulting services take advantage of the benefits of these changes. Therefore, this promotes growth and a profitable base for setting up trading companies in Saudi Arabia.
This is due to the increase in operations through the transition from nationalization to privatization.
Improved political and cultural system
In Saudi Arabia, there is a Council of Ministers, which is an advisory body founded in 1995. The council is made up of ministers who are assigned specific activities that lead the country to liberalization of the economy. Therefore, for foreign investors, there is a complex business culture attached to ancient customs and traditions.
Natural resources
An important asset to start a trading company in Saudi Arabia consists of its natural resources. In this case, the country has enormous natural wealth that it has been able to take advantage of. Likewise, it ranks third among the countries with the greatest natural resources such as oil, gas, and strategic minerals.
Good security
Saudi Arabia has security like many countries in the Western world. In addition, foreign investors who currently operate their businesses here ensure that the country has high security compared to other countries in the world. In the same way, Riyadh belongs to one of the 50 cities with the highest security.
Great job and business opportunity
According to the World Economic Forum, Saudi Arabia is among the top 30 countries with the best global economy. Likewise, the country has the second position among the 20 largest emerging market economies. Also, it has the largest economy among the countries that make up the Gulf Cooperation Council (GCC).
Accommodation places and infrastructure
Foreign investors decide to live in Saudi Arabia with their families thanks to the security, comfort, and conveniences. In addition, travelers enjoy a quality stay and have supermarkets, restaurants, gyms, and recreational places. Therefore, it has fundamental foundations and infrastructure to start trading companies in Riyadh.
Benefits of Riyadh as Your Business Hub
A booming destination in the Arabian country for business, tourism, and investment is its capital Riyadh. Therefore, we will show you the benefits of starting a trading company in Saudi Arabia in Riyadh.
Diverse economy and business development
Riyadh implements several economic diversification plans following planning for 2030. Likewise, the planning has similarities with that carried out in Dubai and Doha in their particular contexts. Therefore, Riyadh maintains an important position before Dubai, which is the world’s trade capital, and Doha, which takes advantage of its gas reserves.
Similarly, Raid is a significant financial center that attracts investments as a mechanism to diversify the economy beyond oil.
Infrastructure and projects
To support growth, Riyadh made significant investments in infrastructure. On the other hand, as we already mentioned, Dubai is known for investing in emblematic structures such as the Burj Khalifa and the artificial islands. Similarly, Doha also invested in transportation infrastructure and stadium construction.
However, Riyadh has developed its infrastructure such as the construction of metro lines, and improvements in historical areas in tourist destinations. Likewise, he invested in the creation of the King Abdulaziz International Events Center. Established in 2018, this center is a favorite destination for events, conferences, exhibitions, and more.
Tourist attraction areas
To boost the tourism development process, Raid has invested in the opening of important tourism museums such as the Saudi Arabia Museum. Likewise, it works on cultural attraction projects and entertainment works to attract national and foreign visitors. On the other hand, the office has an office of the World Tourism Organization (UNWTO), which is a great step for the city.
In this way, the city obtained international recognition and support for its efforts in Saudi tourism development. Therefore, you can not only establish a trading company in Saudi Arabia but take advantage of the tourism boom. This is thanks to the experience in tourism aspects that international cooperation through the UNWTO has provided.
Thus, due to the attraction that this center has generated, Riyadh is a conducive business center for a general trading company. Furthermore, all these benefits have generated employment, and opportunities for companies, and service providers.
Brand positioning to encourage investment
To encourage the creation of trading companies in Saudi Arabia for economic growth, Riyadh uses place branding. In this way, it promotes the city while building the international image for foreign investment. It has achieved this through various actions devised by local authorities.
One of these actions is marketing campaigns in international media, highlighting history, culture, and the economy. With these campaigns, the country achieves the visibility of its capital for foreign investment and local tourism. Likewise, the city continually participates in international events and conferences to increase its image as a business center.
This way, the world knows the various efforts of the country, such as modern projects, advances in infrastructure, and innovation.
Steps to Start Your Trading Company in Riyadh
Establishing a trading company in Saudi Arabia requires effort, dedicated work, and preparation. However, the authorities allow the establishment of businesses in the country for economic advancement and diversification. Below you will see the steps you should follow to start your business in Saudi Arabia.
Business opportunities
To start your trading company in Saudi Arabia the first thing you need to do is study the possible business options. In this case, it is about identifying a growing niche that has a broad customer base. In this way, you can have greater security regarding the demand for the products or services that you are willing to offer.
However, you must adequately investigate the industry and its behavior within the country’s economic and labor environment. Therefore, you can make a better decision among the many options you will find in Saudi Arabia.
Take advantage of the advantages that Riyadh offers
As we have previously detailed, the capital of Saudi Arabia offers great advantages for those who wish to establish a business there. For example, it offers a large customer base for various types of business and also a modern infrastructure. Hence, the city, and the country in general, are a source of optimal resources for investors and entrepreneurs.
Additionally, for some years now, the number of investors in emerging businesses has grown regularly. Thus, as an entrepreneur, you may find help from said investors who may be interested.
Trusted partner
Another essential point to start your trading company in Saudi Arabia is to find a local partner that you can trust. This way, you will have a better chance of success in the competitive Saudi market. In this case, the said partner must be experienced, knowledgeable about the industry, as well as aware of current trends and developments.
Additionally, the right partner will be able to provide you with the advice necessary to manage your business. Also, this help will help you make the right decisions to improve and grow your business.
Business plan
This is the best way to develop your general trading company, through a well-detailed business plan. Thus, the action scheme must include the following:
- Business idea
- Marketing plans
- Finance
- Operations
In this way, you set your business up for efficiency, effectiveness, growth, and success. Likewise, this plan will allow investors to understand your business and the vision you have for it.
Profitable business model
In the first step, we tell you that you need to choose a business opportunity for your trading company in Saudi Arabia. After you have completed this aspect, you need to choose the business model that best suits your vision. You can choose between the following business models:
- Subscription
- Commission
- Advertising
- Of services
You should take into account that each of the models mentioned has its pros and cons. Therefore, carefully evaluate each of them to find the best fit for your company.
Find and hire qualified personnel
For a business to advance and be productive, it must have the best talent within its workforce. This is the importance of having qualified personnel to establish a profitable business in Saudi Arabia. In this case, we are talking about people with experience in the field of work of your company, in marketing, and sales.
Additionally, if you want to find the best talent, you must offer competitive salaries in your chosen business niche. It can also include additional benefits and have expert advice in this aspect of Saudi employment.
Costs of Initiating a Trading Business in KSA
Setting up a trading company in Saudi Arabia has a cost associated with it due to the procedures you need to carry out. The cost breakdown is as follows:
- The Commercial Registration Certificate that you must obtain from the Ministry of Commerce and Investment (MOCI) costs SAR 500.
- The cost of the municipal license varies depending on the location and size of the business and can be between SAR 1,000 and SAR 5,000.
- A Foreign Investment License (FIL) costs between SAR 3,000 and SAR 8,000 depending on the type and size of the business.
Aside from the costs associated with establishing your business, you must consider the capital requirements according to the type of entity. According to this, the capital must be the following:
- Limited liability company – SAR 100000
- Public limited company – SAR 10 million
- Simple limited partnership – SAR 2 million
- A SAR 500000 general partnership
- Limited partnership by shares – SAR 2 million
On the other hand, there are no minimum capital requirements for individuals or self-employed workers.
Leveraging Saudi Arabia’s Potential
Starting a trading company in Saudi Arabia is like doing business in Western countries and they provide benefits for foreigners starting a business. Likewise, from an economic point of view, Saudi Arabia has the following potential:
Vast Consumer Base
Saudi Arabia has a population of around 32 million people which represents an excellent consumer market. Thus, your company will be able to take advantage of this potential and in turn, benefit the local population with its requirements.
Strong Business Infrastructure
You will be able to count on a solid infrastructure that will include airports, ports, logistics facilities, as well as transportation. Therefore, you can count on an efficient supply chain and a constant flow of merchandise within and across borders.
Exploring Free Trade Agreements
Regarding free trade agreements or FTAs, the country has signed with different nations including the GCC states. Likewise, this provides tariff reductions in addition to very simple customs procedures. As a result, you will have an advantage in accessing global markets with your trading company in Saudi Arabia.
Ease of Business Operations
The government of the Saudi nation implemented a series of simplified procedures and imposed laws and regulations that benefit companies. As a result, companies will have a smooth process to start business and operate in Saudi Arabia.
Saudi Arabia Skilled Workforce
Saudi Arabia will offer you a qualified workforce as the education system of the country is solid and efficient. Therefore, it will provide you with a qualified human resource to operate your company in KSA.
Conclusion: Success your trading in Saudi Arabia
As you have seen, Saudi Arabia is a good pillar to start your trading company in Saudi Arabia as it offers excellent opportunities and benefits. Likewise, although abu dhabi and Dubai is the famous to have business setup in dubai mainland and their freezones, you cannot deny that Saudi Arabia is equally promising. Also, for more information about this and the Saudi labor sector, do not hesitate to contact us.
