AstroLabs' New Online Platform Eases Procedures For Setting Up Foreign Companies In Saudi Arabia
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AstroLabs, the first international business incubator licensed in Saudi Arabia, has launched an online source of information on how businesses can set up a 100% foreign-owned entity in the Kingdom.
The Set Up In Saudi platform, touted as the first of its kind in the region, provides users with a 16-step setup process, information on legal requirements, as well as the services of an operations team in Riyadh to manage end-to-end business processes.
Muhammad Mekki, founding partner of AstroLabs, says that the incubator has already helped over 60 businesses set up shop in the Saudi market, with a combined value of over US$5 billion, of which 56% have been in the tech sector. "The large consumer market that is highly connected online and relatively underserved locally is driving this trend," he explains. "We have assisted many top tech-enabled companies to set up in Saudi, including Bayut, a real estate discovery platform, and Kitopi, a cloud kitchen for F&B businesses."
AstroLabs also offers businesses with a physical address and dedicated working space in its Riyadh coworking facility, in addition to providing connection to recruitment partners and service providers.
The platform and the overall service is due to the incubator's partnership with Saudi Arabia’s Ministry of Investment, entered in 2018, which entailed that AstroLabs could be a partner of choice to support businesses expanding into the Kingdom.
The startup ecosystem in KSA will see further growth and expansion, Mekki says, especially du to a growing shift towards the technology sector. “We can expect to see Saudi-born startups expanding internationally and making an impact beyond their local market," he adds. "This is fueled by a deep pool of venture capital, particularly for scaling companies, as well as more talent shifting from traditional jobs in finance and oil and gas to the technology sector.”
Muhammed Mekki, Founding Partner, AstroLabs. Source: AstroLabs
But in addition to understanding the legal ramifications of setting up a business entity in KSA, it is equally important for business owners to be aware of the cultural and religious nuances of the region, Mekki says. Therefore, the Astrolabs team always advise entrepreneurs to recalibrate their expectations, especially when it comes to gaining an understanding of what type of products or services would be successful in the Saudi market.
He enlists four main points every company expanding into Saudi Arabia should keep in mind.
1. Redesign your customer experience from the ground up "Taking your current offering and translating it to Arabic is not enough to be successful in the Saudi market. The best companies understand that they have to spend time understanding the Saudi customer and reimagining their products and services to meet their needs."
2. Hire locally "Having Saudis on your team will give you a competitive edge, and if you spend the time properly searching, you’ll find a talented pool of Saudis that are hungry for opportunities at fast-growing companies. Practically speaking, you’ll easily comply with the Saudization requirements and your startup phase will be much easier not having to jump through the extra bureaucratic hoops when hiring expats."
3. Have patience "Operating in Saudi Arabia is a long-term investment. There are challenging entry hurdles which serve to filter out a lot of competition at the gates. Establishing your brand in the market takes relatively longer but once you have found your niche, the market is deep and rewarding."
4. Invest in relationships "Although you can now enter into Saudi Arabia as a 100% foreign-owned company with no local partner, don’t be fooled into thinking you can operate independently without collaborating with local players. Time invested into building strategic relationships pays dividends in this market, especially as you are learning how to navigate things at the beginning."