Riyadh, KSA — Saudi Arabia’s economy is set to grow at the quickest pace in a decade and will likely be one of the world’s fastest-growing economies this year, according to the International Monetary Fund (IMF).
Expanding the country’s industrial base, strengthening its financial sector, and attracting foreign direct investment across sectors are among the main pillars of the overarching Vision 2030 program. Moreover, labor market reforms, boosting employment and ease of doing business are among the other priorities for Riyadh.
Today, as brands are looking at Saudi Arabia as their gateway in the Middle East, there is an expected influx of huge amount businesses looking to establish a commercial presence in Saudi Arabia. This flow requires business setup, company formation, visas in Saudi Arabia and many other procedures that enterprises must be aware of to open headquarters or branches in the kingdom.
New business licenses
Setting up and running your own business in Saudi Arabia, was never easy. However, given the massive changes and investments that the kingdom is now open to, it is becoming better and more efficient.
According to Paul Arnold, Managing Director of Sovereign PPG, a global leader in company incorporation, corporate governance, and secretarial services in the Middle East, Africa, Asia, the Caribbean, and Europe, the application process for obtaining a business license or commercial registration in Saudi Arabia and receiving the initial response and agreement is becoming very efficient and could be completed in a matter of weeks rather than months before COVID-19. It has become quite fast and, to some part, digital, albeit enterprises must still go through the proper formalities and physically apply, etc.
He added that those enterprises, on the other hand, require the right professional advice and assistance to assist them in the process and guide them through some critical steps. However, once the application process is completed, we are seeing initial licenses or approvals arrive in a couple of days.
Arnold told TRENDS that most firms looking to enter the Saudi market are interested in the new legislation and licenses given by the Saudi Ministry of Investment, such as the 100 percent foreign investment and ownership model, which is possible for most companies.
“About 90 percent of the businesses and enterprises seeking our support and advise are aware of that model, and we’re assisting people in navigating and achieving that application process,” he noted. For example, a company with a solid positive track record, a good trade history, and profitable financials looking to expand into Saudi Arabia can receive the license, unless there are any significant issues or concerns.
He also mentioned that there are other licenses that require, for example, 25 percent Saudi national shareholders. “In this scenario we can assist with identifying and placing that Saudi as a legitimate 25 percent shareholder in the business if necessary”.
The ideal timing
Saudi Arabia has proactively positioned itself as a leader in investment opportunities. The Saudi Vision 2030 and the National Transformation program that the kingdom is implementing are carrying out that social and economic transformation, which is changing the country in many ways, particularly in terms of the business landscape.
Many enterprises and SMEs, both in the region and elsewhere, have recognized that Saudi Arabia is the place to be. They’ve realized it’s finally time to set their feet on the ground, incorporate and register in the country. They are currently looking to capitalize on opportunities in major industry sectors such as construction engineering, energy, solar, hotels, and others.
According to Arnold, the Saudi government programs have been a critical factor in attracting businesses, such as the Regional Headquarters Program, which will restrict international companies without regional headquarters in Saudi Arabia from contracting with agencies, institutions, and funds owned by the Saudi government post-January 2024.
Thus, businesses that want to operate or continue to function in Saudi Arabia must be registered and have a regional headquarters or presence in the kingdom, which has been taken up proactively by huge global brands and some relatively more minor organizations.
A promising market
Arnold sees a bright future for Saudi Arabia and an exciting year ahead.
When it comes to Sovereign PPG’s presence in Saudi Arabia, we’ve had a very successful number of years in the services that we give in terms of public relations and structure, and our forecasts and current projections are significant.
So, from our perspective, the Saudi government and the ministries are convinced that it is now their turn to shine, grow, and develop as a nation, and we hope and believe that with our support and other companies and other professionals in the market looking to deliver on the vision of 2030 and the economic and social transformation the vision will be achieved.
“I would argue that these things take time, money, and investment, but everyone has the correct positive mindset to do excellent business and grow that shift in Saudi reform, and it will come,” Arnold said.