How to Start a Business in Saudi Arabia for Residents and Foreigners?

Entering the Saudi Arabian market is the key to success for expanding your business in Saudi Arabia, especially in Riyadh, Jeddah, Riyadh, Medina, and Mecca. The most effective way to reach Saudi Arabian markets is with your business in Saudi Arabia, to take advantage of Saudi Arabian tax rates. Establish a company in Saudi Arabia with the help of our qualified team for company formation in Saudi Arabia, import-export in Saudi Arabia, immigration to Saudi Arabia, real estate in Saudi Arabia, supply chain in Saudi Arabia, and resource consulting humans in Saudi Arabia.

Years of experience in honing our specialization for Saudi Arabia, major cities covered starting a new business in Riyadh, starting a new business in Jeddah, starting a new business in Makkah, starting a new business in Madinah, and starting new businesses in Riyadh and international partnerships for Saudi Arabia and partnerships. for Saudi Arabia by providing excellent solutions to our clients for Saudi Arabia at the best competitive prices.

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How to Do Business in Saudi Arabia?

Saudi Arabia is the largest economy in the Middle East. It represents 25% of the area’s economy. It is also one of the 20 largest economies in the world.

Saudi Arabia has always been dependent on oil production due to its large production volume and global reserves. Today, Arabia intends to make a strategic change and become an industrial and self-sufficient country so as not to depend only on oil. To this end, a VISION 2020-30 strategic plan has been established that aims to make strategic changes and evolve towards a leading country in the Middle East and have alternatives to oil such as high-tech industrial and value-added sectors, services, and tourism. and leisure, etc.…

To achieve this plan, market requirements have changed and therefore new business opportunities are presented to foreign investors. In addition to the business opportunities and challenges of the privatization plan (Infrastructure, utilities…), the country requires Technology, Knowledge, and added value from consulting to training. This requires skilled and value-added services from advanced countries.

Nowadays foreign companies can be established in the country without a local partner (100% foreign participation). Only some licenses require a local partner, such as the Engineering activity, although there are always changes in legislation and it can change. This makes implementation in Saudi Arabia more attractive.

The Saudi Arabia General Investment Authority (SAGIA) encourages with special conditions the implementation of companies that provide added value and high technology to the country. SAGIA license fees vary depending on the company’s activity. For construction and maintenance activity the fee is SAR 500,000 for 3 years.

Contact with IBAS: +201000498154

The business opportunities by sector   

Consulting and services, Construction, Oil & Gas, Combined Cycle Energy, Renewable Energy, Water Treatment, Mining, Telecommunications, Health, Food and Beverages, Tourism and Leisure, Education and Training, …

To do business in Saudi Arabia, we must take into account the following aspects:

– Have a product or service that provides added value to the country;

– Have the financial capacity to invest in the country. One of the documents required to establish a company is the financial balances of the last 3 years in the parent company. They prefer companies that work well and generate profits in their parent company;

– Follow the established rules and laws regarding the management of the company and the hiring of personnel

– Mention the Softening plan that involves hiring a percentage of Saudis based on the company’s activity;

– Take into account annual increases in costs and fees when defining prices;

– Take into account the high local and Asian competition;

– Adjust structure cost charges at the plant to be competitive;

– Adjust the costs of our expatriate staff;

– Take into account the cultural adaptation of our staff. Pre-displacement training for expatriates is important;

– It is important to adapt to the business culture of Saudi Arabia, as well as redefine our processes and procedures in accordance with the country’s culture;

– Patience and Perseverance a key factor to take into account.

 Formulating a business plan and its importance

Purpose: sets the direction, goals and strategies of the business.

Plans: Include market analysis, financial projections, marketing strategies, and operating plans.

Benefits: Enhances odds of success, helps obtain funding, and helps guide work through multiple stages.

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 List of basic documents for registration 

A properly completed company registration application form.

  1. A copy of the trade name confirmation.
  2. Identity and address evidence of business managers and shareholders.
  3. Company Memorandum of Association (MOA) and Company Articles of Association (AOA).
  4. Business plan, bank account reference letter, power of attorney, etc.
  5. Third party approvals (if any).

Taxes and financial considerations in the Kingdom of Saudi Arabia

Overview of the zakat and tax system:

Corporate Taxes: The tax system in Saudi Arabia under the Zakat and Tax Law implemented in 2018 subjected companies to a tax rate of 20% on income, profits and capital gains.

The minimum threshold for applying corporate tax was raised from 375,000 Saudi riyals to 1 million Saudi riyals, and the tax was reduced from 20% to 15% for companies  

The 5% tax was also applied to companies that achieve profits of less than 1 million Saudi riyals.

Individual taxes: Individuals are taxed progressively, at rates ranging from 2% to 45%, depending on income level.

Registration in the tax number: It is a system adopted by the Kingdom to identify persons and institutions registered for value-added tax.

Contact with IBAS: +201000498154

Why start a business in Saudi Arabia

The United Kingdom, which has always been a hotbed for tourism and the epitome of British culture, has also been ranked sixth in the world for setting up a business enterprise by the World Bank. This is first because Saudi Arabia allows the lowest corporate taxes in Europe at 6%. Furthermore, it would take only 28 days for investors to establish a company according to the World Bank. In addition to these provisions, the United Kingdom attracts investors to its country by measuring high standards of living. This includes personal safety, health provisions, environmental quality, educational facilities, work-life balance, and income-generating opportunities. Making it a great place to not only invest but also to raise a healthy and happy family.

Apart from this, other positive elements that attract investment in the country include the availability of a large talent pool from top universities. Not only does this ensure that your potential hires bring their A-game, but it also creates a healthy work environment that is conducive to growth. Also, according to the World Bank again, Saudi Arabia ranks second in Europe for the quality of potential employees. Salaries are also relatively affordable among other European countries.

Finally, the United Kingdom has created and invested substantial amounts in its fantastic trade and transport network that extends between the 27 member states of the European Union. Furthermore, it increases its investment attractiveness and scalability for any commercial enterprise in the country.

WHAT TO DO and WHAT NOT TO DO to be successful in Saudi Arabia 



1- Study and analyze the market/business opportunities:

  • Are our Products / Services / Projects / Prices viable for the market?
  • Are we competitive?
  • What value do we bring to the market?
  • Are we prepared to expand our business in this market?
  • Our team speaks English.
  • Our team is able to work outside and in different conditions (it can be difficult), and different cultures.
  • Do we have people trained to export our know-how and experience?
  • Do we have the necessary resources to address the market?


2- Make a strategic decision and establish our company in the market. Nobody will grant you projects if you are not present in the market.


3- If you decide to go with a local partner, choose the correct local partner


4- Understand the local culture to do business and adapt. Don’t wait for the local partner or customer to change their culture.


5- Be competitive. Work hard. It is a market with great opportunities and great project potential in all sectors, but the best competitors from around the world are present.


6- Be supported by advisors (Consultants, Lawyers, etc.) with a business mentality and full knowledge of the business culture and the market.


7- If you choose a local partner, who you are going to have to trust, trust, and trust, make sure it is a trusted partner.


8- Invest jointly with your local partner and create a long-term business strategy.


9- Send key people with previous training about the country, who understand your business, who speak English, and select the appropriate local staff who know the local market.


10- Follow the business and maintain the relationship with your local partner.




1- Do not decide to go to this market because:

 Everyone talks about great business opportunities and projects.

 Your competitor has established itself there and is doing business.


2- Do not send unprepared personnel. Do not choose employees who are free and we do not know what to do with them.


3- Do not try to obtain projects from your office in country. Do not believe that granting projects is easy. It is an arduous effort with many competitors from all over the world.


4- Do not plan the business without understanding the local culture.


5- Do not select a local partner solely for its external image. Research their history of success.


6- Do not use lawyers and advisors who can be an obstacle to doing business (they do not understand the culture,)


7- Do not think that the local partner cannot do the business without their know-how or technology. Do not underestimate the capacity of the local partner.


8- Do not plan a short-term business.


9- Do not send poorly prepared people to lead the business (No English, no knowledge, no adequate skills, …). Do not choose people who agree to be expatriates but are unprepared  


10- Do not start the business if you are not sure of entering the market

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Summary of Business in Saudi Arabia 

Saudi Arabia is the center of Islamic culture and the richest Arab country thanks to its oil industry. The Saudi market depends on foreign suppliers for the supply of all types of products and the construction of infrastructure. Local competition is scarce.

In recent years there has been a significant liberalization of import trade (decrease in tariffs) and exchange controls have been eliminated, changes that have brought with them the interest of foreign companies.


  • It is important to develop a level of trust and familiarity before entering into a business relationship. Therefore, face-to-face and leisure meetings play an important role. Although modern Saudi Arabia has adopted many of the methods and styles of the West, many differences remain.


  • Business appointments with Saudi businessmen must be established at least one month in advance. In the communication addressed to the Saudi company, two or three possible dates should be suggested. The best time to arrange visits is mid-morning or afternoon. In Jeddah and other major cities, offices remain open until 9:00 p.m.


  • Business is established on the basis of personal relationships, not between companies, or through contracts. That is, the Saudis like to know and assess who they are dealing with before entering into the negotiations themselves. This means spending time establishing personal relationships. You have to leave the initiative to them to start talking about business.


  • Saudis attach great importance to professional status. Foreign negotiators must be company directors and have the power to make decisions.


  • In terms of punctuality, the foreign visitor is expected to be punctual, although it is common for appointments to be delayed, changed to another day or even canceled without prior notice, as a demonstration of power.


  • During a business meeting, people use body language and eye contact more than direct words. During conversation, people infer what is not explicitly said. Particular emphasis is placed on tone of voice, use of silences, and facial gestures. It is essential to be aware of these non-verbal aspects of communication in all types of business situations to avoid misunderstandings. For example, silence is often used for contemplation, and one should not feel compelled to speak at these times.


Likewise, during the meeting, it is easy for the conversation to be interrupted by phone calls, matters that need to be dealt with urgently, or even the entry of other visitors. You have to stay calm and not show displeasure. It is their usual way of working.

How are you? Do you have it clearer now? We invite you to review our offerings to decide once and for all what your next step will be.  

Contact with IBAS: +201000498154

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