A new scheme that grants residency permit to qualified expatriates
should go a long way in attracting leading global entrepreneurs,
innovators and investors in Saudi Arabia. “Our aim is to attract innovators from across the world to live and work
in Saudi Arabia – and this reform will play a significant role in doing so,”
said Eng. Ibrahim Al Omar, governor of the Saudi Arabian GeneralInvestment Authority (SAGIA). “These investors and entrepreneurs will
help to drive the private sector growth, which is needed to realise the
ambitious goals set out in Saudi Vision 2030.” The residency permit will enable expatriates in Saudi Arabia to gain
access to a range of additional privileges alongside their residency,
including allocating visas for their families and enabling them to own real
estate in the kingdom. There will be two separate forms of the
programme, one acting as a permanent residence permit, and another
that is renewable on an annual basis. “It is important that stakeholders understand that Saudi Arabia offers
significant long-term opportunities,” said Eng. Al Omar. “We want to
attract people who will build a foundation and a network in Saudi Arabia,
and who will play a role in the future development of the Saudi economy
and benefit from the growth opportunities it presents. We believe that
this reform will make a real difference.” In the past year, SAGIA also launched a specialised Entrepreneur
License, which allows international entrepreneurs to launch a fully
foreign-owned start-up company in Saudi Arabia. These recent reforms
have led to a 70% spike in the number of new foreign business licenses
issued by SAGIA in Q1 2019, when compared to the same period last
year. GEM SURVEY The latest survey of Saudi citizens’ perceptions of entrepreneurship
underscores a strong desire to start their own businesses. According to the 2018/19 Global Entrepreneurship Monitor (GEM) Saudi
Arabia National Report, just over a third of the Saudi population has
expressed their intention to start a new business in the next three years Over 5% had started a nascent business not more than three months
old, and nearly 7% were running new businesses between three
months and 3.5 years in operation. Together, those involved in the
nascent and new phases show that a total of 12% of Saudi Arabia’s adult
population was involved in early stage entrepreneurial activity. “Among the countries in the MENA region, Saudi Arabia occupies an
intermediate position with regard to the percentage of the adult
population that declares its intention to start a new business within the
next three years,” GEM said. “As Saudi Arabia develops, entrepreneurial intentions may be
progressively less influenced by necessity, where people are compelled
to create their own source of employment, and more by the
development of an entrepreneurial-minded society as the country
advances with its Vision 2030 plan.” Another key highlight of the report is the financing needs of Saudi
entrepreneurs, which is increasingly being met by informal investors.
The survey shows that 12% of the adult population in Saudi Arabia
provided funds to entrepreneurs, nearly equal to the entrepreneurship
rate. This is an increase over the prior two years and suggests some role
in the upward movement in total early-stage entrepreneurial activity
(TEA). “Saudi Arabia’s population has a high level of informal investment in
entrepreneurs compared to other countries in the MENA region, and
also higher than the United States and the average for high-income
economies,” GEM said. “This demonstrates both the willingness of
people to finance entrepreneurs and the critical importance of this
funding source for entrepreneurs in Saudi Arabia.” BIDDING FOR GROWTH Saudi SMEs are eyeing new opportunities and bidding for new contracts
amid a surge of projects that are under way in the kingdom. The Human Resources Development Fund (HRDF) recently revealed
that more than 7,000 SMEs joined its platform to partake in bidding
opportunities valued at SAR 394 million. The Forsah.sa platform is one of
the services provided by the 9/10ths programme and connects buyers
and vendors across the kingdom by allowing the former to submit their
purchase requests online, so that approved SMEs can access them and
offer their proposals based on their field. The platform has already
approved SAR 73 million worth of bids. “The portal offers a number of platforms including Tojjar, APPWEB,
Forsah, Bahr, Kanaf, ATWAR, ZADD and EMADAD with the aim of
changing the work culture among individuals and the society through
encouraging and supporting entrepreneurship and SMEs, as well as
enabling entrepreneurs to create jobs from those start-ups,” HRDF said. The Saudi start-up scene is also heating up with Saudi Aramco Wa’ed
Ventures providing funding to Hazen.ai, a start-up focused on
artificial-intelligence-based traffic analytics and monitoring solutions.
Hazen.ai is building advanced traffic cameras with the capability to
detect dangerous driving behaviour through video analysis. Similarly, Zid, a Saudi-based e-commerce company, announced a USD 2
million pre-series A investment led by Elm VC and joined by regional and
international VCs, as well as other angel investors. Saudi start-ups are emerging as major job creators. The GEM report
notes that last year, 7.2% of the Saudi adult population received income
from paid work obtained via a digital platform. Taking into consideration that this figure is greater than half of the
current Total Early-Stage Entrepreneurial Activity rate in Saudi Arabia
(12.1%), it is safe to say that work based on digital platforms is rapidly
becoming popular in the kingdom. “Additionally, the average time allocated by people involved in gig
activities is substantial. In Saudi Arabia, 78% of individuals allocated
between 10 and 40 hours per month to these activities, while 18.5%
allocated more than 40 hours,” GEM noted. |