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Run by the Al Saud royal family, Saudi Arabia sits on twenty five percent of the world’s oil reserves and has a capacity of producing nearly ten million barrels per day. It is the number one oil producer in the world and has a strong trade partner in the US and UK. The slick chance of natural resources has been the basis of Saudi’s success as petroleum exports account for seventy five percent of the government’s income.

Why start a business here?

Almost everything about the Middle East evokes antiquity and authenticity. Saudi Arabia can brag of expansion rather than geographical destiny, as there have been intensive efforts to redefine the economy. With all its reforms and liberalizations there are plenty of entry options for foreign investors. The government is concentrating on efforts to improve the education and employment rate of its population with $40bn set aside for infrastructure projects. With one of the most rapidly expanding populations in the world there are excellent opportunities for companies setting up a business in Saudi Arabia. So if you are contemplating expanding business overseas, you may want to consider Saudi Arabia.

What is the Economic overview?

There is evident government control over the major economic operations, as Saudi Arabia is an oil based economy. More than 20 percent of the world’s petroleum reserves are in Saudi, and it plays a leading role in OPEC, being one of the largest petroleum exporters. The petroleum market constitutes approximately 75 percent of budget revenues, 45 percent of GDP, and 90 percent of export earnings. To decrease its dependence on oil exports and to boost employment opportunities for the mounting Saudi population the government is encouraging private sector growth – especially in power generation, telecommunications, natural gas exploration, and petrochemicals.

Business Investment opportunities

Saudi Arabia recently gained WTO membership, which makes it a more transparent and foreseeable arena for trade and foreign investment to take place. The Saudi government has also introduced measured reforms and is open to all outside investors. Foreign investors can now own up to 100% of ventures in some sectors.

The Main industrial Opportunities in Saudi Arabia
With 45 percent and 90 percent of export earnings all coming from the nations oil reserves, oil is easily Saudi Arabia’s biggest commodity. The others include power, vocational, technical and business education, Construction, Information and Communications technologies, oil, gas and petrochemicals and financial services.

Overcoming the Challenges
One of the biggest challenges faced by investors besides bureaucracy is contract enforcement. With no civil court system for resolving contract disputes or bankruptcies and no legislation for the protection of shareholders or investments, business operations could prove challenging in Saudi. When doing business overseas, especially in Saudi Arabia, it is important to acclimatize yourself with the law. Along with the help of a business expert, you can get the necessary guidance on all aspects of your business, be it legal, HR, Payroll, compliance or international accounting.

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