Saudi Arabia’s journey towards its Vision 2030 goals of opening up the economy – and diversifying away from oil to attract foreign talent and investments – has been accelerated by digitalisation, although challenges remain.
With the lockdown measures to combat the spread of coronavirus last year, the public and private sector alike had to strengthen their digital presence to remain viable which accelerated the digitalisation efforts already underway, said Stuart D’Souza, co-founder and CEO of Arabian Enterprise Incubators (AEI).
“In the last five years, [the kingdom’s business landscape] has been transformed. The digitisation of so many government services means the days of queuing up with triplicate versions of documents and multiple stamps and attestations are diminished,” said D’Souza.
“When I first moved to Saudi 15 years ago, I set up a foreign-registered business and it took us 18 months to get the foreign investment through. We’re doing dozens of those nowadays and generally completing that first phase of activity is a matter of weeks, so it’s a vast improvement,” he added.
The improvement in the ease of doing business in Saudi Arabia coupled with the initiatives and reforms, such as the regional headquarters based in the country decision, have already made an impact.
Stuart D’Souza, co-founder and CEO of Arabian Enterprise Incubators (AEI)
“The growth in interest in Saudi as a place to do business, invest and live, has been extraordinary. Even during the pandemic in 2020, we saw a 300 percent growth in our corporate services business,” said D’Souza referring to Sovereign AEI, a firm which was launched in 2019 to help foreign companies set up their business in the UAE.
However there continues to be some challenges for foreign companies looking to set up business in the UAE, especially when it comes to the regulatory environment as it is “not a cut and paste from the UAE or any other jurisdiction,” said D’Souza.
“Saudi can sometimes be quite opaque as a marketplace and it can be difficult to understand what the procurement processes are, both in the private sector and government that applies to setting up entities as well as tendering and contract management,” explained.
Paul Arnold, managing director of Sovereign Saudi Arabia
The minimum investment needed to set up a business is “costly” compared to operating from a free zone in the UAE and that is a challenge for SMEs, said Paul Arnold, managing director of Sovereign Saudi Arabia.
“None of these challenges however are insurmountable and there are entities to support companies through them,” pointed out D’Souza.
Since the establishment of the strategic partnership in 2019, Sovereign AEI has reported solid performances in its operations, enabling over 600 business visits to Saudi Arabia that year. AEI alone has enabled over 1,500 foreign businesses to enter, establish or expand in Saudi Arabia since the company commenced operations in 2012.
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