Saudi Arabia is the largest market in the Middle East. It is making headlines with giga projects and ground-breaking plans to diversify its oil-dependent economy. Business setup in Saudi have a great support system that allows them to thrive and stay ahead of the market. Vision 2030 has led to the proliferation of small and medium businesses (SMEs). It aimed at job creation, technological innovation, and boosting exports. In recent years, the Kingdom has demonstrated an unwavering commitment to fostering startups and nurturing a thriving entrepreneurial ecosystem.
Saudi Arabia has developed a startup-friendly environment through reforms across key economic sectors that are unlocking new markets, boosting entrepreneurial ambition, and opening avenues of innovation. These reforms are fueled by the country’s plans to diversify the economy by increasing small businesses’ contribution to GDP from 20% to 35% and boosting foreign direct investment from 3.8% to 5.7%.
Supporting startups in varied ways
- Formation of Monshaat: Monshaat, formally known as the Small and Medium Enterprises General Authority, is a crucial entity in Saudi Arabia’s efforts to support and promote startups and SMEs. Established in 2015, Monshaat was created with the primary objective of fostering entrepreneurship and economic diversification in line with Vision 2030. This dedicated authority plays a pivotal role in implementing policies, programs, and initiatives that facilitate the growth of startups.
- Investment initiatives: To attract local and foreign investors, Saudi Arabia has established a range of investment initiatives and venture capital funds. The Public Investment Fund (PIF), is one of the largest sovereign wealth funds in the world. It has allocated significant resources to support startups. Initiatives like the Future Investment Initiative (FII) have brought global investors and startups together, fostering valuable connections and funding opportunities. Earlier this year, a fund worth $2.4 million was announced by several entities in Saudi Arabia to support startups.
- Regulatory reforms: The Kingdom has introduced several regulatory reforms aimed at simplifying business procedures and reducing red tape for startups. The launch of the “Shareek” platform, for instance, streamlines the process of setting up and managing businesses, offering a one-stop shop for licenses, permits, and registration.
- Incubators and accelerators: Saudi Arabia has invested in the establishment of numerous startup incubators and accelerators, both public and private. Initiatives like the “Misk Innovation” and “Wa’ed” accelerators provide startups with mentorship, resources, and funding to develop their ideas. These programs offer a nurturing environment where entrepreneurs can refine their business models and access valuable networks.
- International partnerships: Saudi Arabia has forged partnerships with international organizations and startup ecosystems to create a global network of support for its startups. Collaborations with Silicon Valley, China, and Europe have opened up opportunities for Saudi startups to tap into international markets. It gains exposure to diverse business environments.
Vision 2030’s focus on innovation and entrepreneurship has created a fertile ground for startups to flourish, attracting both local and international talent and investment. With its strategic investments, regulatory reforms, educational programs, and global partnerships, Saudi Arabia is on a path to becoming a prominent player in the global startup ecosystem. As the Kingdom continues to nurture its entrepreneurial spirit, we can expect to see an even more vibrant and dynamic startup ecosystem emerging on the Arabian Peninsula.
Start your business setup in Saudi today
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