Expat entrepreneurs having problems getting Saudi business licenses

Expat entrepreneurs wanting to set up businesses in Saudi Arabia are being stymied by Saudi laws regarding business licences.

Many expatriate businessmen wishing to establish a company in Saudi Arabia are frustrated by laws preventing them from obtaining the necessary paperwork without first finding a Saudi sponsor. It’s virtually impossible to start a new business via alternative methods, leaving those wishing to invest in the kingdom unable to move forward. An important drawback is the rule which states investors must have arrived in the kingdom with the intent of starting a business, thus ruling out entrepreneurs already resident in Saudi who’re wanting to start up on their own.

The Saudi Arabian General Investment Authority (SAGIA), makes the rules governing foreign investment, and acts as a general sponsor for expatriates arriving with start-up investments on their minds. SAGIA is the authority which grants permission to foreigners wishing to start their own businesses, with refusals admittedly rare.

CEO of several business consultancy firms Ali Shah is happy to explain the reasons behind the archaic laws. One of the major difficulties caused by expat-owned start-ups, he says, is the supposed influence of foreigners on Saudi’s traditions, social structure and culture as well as the security of the Kingdom. He adds Saudi society is already being compromised by the ever-increasing presence of ‘foreign entities’ and suggests a structured and regulated system of allowing expats to run their own companies could be legally implemented.

Shah believes allowing already resident expats to become business owners would benefit the Saudi economy during its recently introduced period of intense change. His only problem would be the entry of undesirable criminal entities, although he believes intelligence and effective law enforcement would take care of any such issues. Expatriates agree with him, with Shah also stating established expats should be given the right to own their own homes as well as being free of the sponsorship requirements and able to achieve citizenship.