Pros and Cons of Starting a Business in Saudi Arabia


If you choose to set up your business abroad, you must carefully pick a destination. Well, if Saudi Arabia has caught your eye, it is a must to get closer acquainted with it first. To this end, we’ve put together a guide on the pros and cons of starting a business in Saudi Arabia!

The cons of starting a business in Saudi Arabia

Pros and Cons of Starting a Business in Saudi Arabia
Pros and Cons of Starting a Business in Saudi Arabia

The hiring difficulties you might encounter

The first and foremost con of starting a business in Saudi Arabia is the hiring difficulties. Now, there are two sources for this. First, unlike when starting a business in NYC or a similar location where there are lots of graduates and freshly minted young professionals, you can’t expect them to come to you. You’ll need to go looking for staff. Second, due to Saudi Arabia hiring laws, depending on what business you’re in, you might be forced to have a certain percentage of local staff. Some business fields even dictate that one hundred percent of your staff must be locals.

Local banking efficiency

There are two reasons why local banking is considered a con. First, you need to understand that Saudi Arabian banks are slow. You can expect any normal process that you consider a quick and painless trip to the bank to turn into much more than that. Second, some of the local banks do not offer internet access for foreign currencies. This will either force you to convert into local currency quickly, or you’ll have to make a personal trip to the bank every time you want to handle foreign currency. Obviously, neither is preferable.

Starting a business in Saudi Arabia takes a while

There are several stumbling blocks on your way to starting a business in Saudi Arabia that take a while to overcome. First, in order to get a residency visa, you need to stay in Saudi Arabia for at least two weeks. And you can’t even become a bank signatory without a visa! Without a bank setup, you naturally can’t set up a business. And getting all that paperwork sorted out often takes at least a few months.

The language barrier

South Arabia is not a place you want to set up without knowledge of Arabic. You need to understand that almost every bit of paperwork here must be done in the local language. At the very least, get a basic handle on it, or you will be completely lost. The same, of course, applies to any employees you bring with you.

Differences in law

If you plan to lean into your existing law knowledge, don’t. It would be one of the top business mistakes you can make when starting a business in Saudi Arabia. The local laws are quite a bit different from what you’re likely to be used to. And even thinking about starting a business before you get acquainted with them is unwise. Do your studies first, or you will hit many roadblocks on your way to running a profitable business.

The pros of starting a business in Saudi Arabia

Very lax taxes

The biggest pro has got to be the taxes. Lots of services and goods are entirely exempt from taxes in an attempt to encourage businesses to handle them. The personal income tax is extremely low, and even the corporation tax is only around fifteen percent! Compared to almost every country out there, this makes for what is practically a tax haven. If you want to set up a serious business in Saudi Arabia, you will quickly notice how helpful the tax breaks are both during the inception of the business when you don’t have a lot of capital and when it’s fully up and running!

A high standard of services

An amazing thing about starting a business in Saudi Arabia is the high level of service quality. The quality of life you’ll experience here is considerable! So, no matter what kind of logistics services you need for your business, a skilled team can help. The quality of housing and similar is also high, so you definitely do not have to worry about having a rough time away from home. Overall, most expatriate business people have an extremely good impression of Saudi Arabia.

A very safe environment for doing business

We can’t emphasize this enough, but Saudi Arabia has an extremely high level of security. In every possible sense of the words, at that. In fact, crime rates in Saudi Arabia are much lower than they are, on average, in the US. You can focus on managing your business’ finances and not worry about coming across danger.

A move to improve the broader economy

Recognizing that they lack breath of economy, the local government is trying to encourage the development of less popular fields in Saudi Arabia. This means that you will encounter a lot of help from the government when setting up and running your business. This can come in the form of tax exemptions, help with paperwork and similar, or various events where you can make business connections.

Lots of different business opportunities

The final pro is the many local opportunities. Saudi Arabia has a very bustling economy, and, as we just mentioned, the government has realized it’s to their benefit to develop every aspect of their market. As such, even if the market is oversaturated in the US or other countries abroad, you will find your own niche much easier no matter what field you decide to focus on. This leaves you with a lot of wiggle room to develop and expand your business!

Starting a business in Saudi Arabia yourself

Now that you are aware of the pros and cons of starting a business in Saudi Arabia, you can take the time to decide whether you want to set up here yourself! Of course, there are definitive drawbacks and challenges. For example, we didn’t even mention the need to adjust to the local business culture. However, the many opportunities Saudi Arabia offers more than makeup for this!