In recent years, there has been a boom in the online business sector in Saudi Arabia. The advancement of technology allowed hundreds of foreign entrepreneurs to invest in the country and boost the economy. If you want to be one of these entrepreneurs and form an online business in Saudi Arabia, in the next lines you will get all the information you need.
In this article, you will find all you must know about the e-commerce businesses, the process to register and open an online business in Saudi Arabia, the most profitable ideas for this year, and how we can help you start this kind of company in the country. Get started now!
- What is an e-commerce business?
- Is it legal to start an online business in Saudi Arabia?
- How is the registration process for an online business in Saudi Arabia?
- How can you open an online business in Saudi Arabia?
- Ideas for an online business in Saudi Arabia
- Benefits of starting an e-commerce
- How can we help you start an online business in Saudi Arabia?
1. What is an E-Commerce Business?
E-commerce is the process of selling services and goods over the Internet. Customers come to an online marketplace or a website and purchase products using electronic payments. Upon receiving the money, the merchant provides the service or ships the goods.
1.1 How does E-Commerce Work?
E-commerce principles are the same as a physical store. Customers come to your e-commerce store, browse products and make a purchase. The difference is that your customer base is not limited to a region or geographic area, and the clients do not have to go personally to your store. Whether you are selling home supplies or running shoes, you go through the same process when operating an e-commerce website:
- Accept the order: The client places an order on your e-commerce platform or your website. You will be alerted that an order was placed.
- Execute the order: Next, the payment is made, the sale is logged, and the order is marked ready. The payment transactions are, generally, processed through a payment gateway.
- Ship the order: The last step in this process is the shipment. You must ensure prompt delivery if you want to repeat customers.
1.2 What features should an e-commerce site have?
To succeed in electronic commerce, you should have a comprehensive list of the services and products you sell on your marketplace or website. The online shop should be user-friendly, easy to navigate, and aesthetically appealing.
The checkout experience is another important aspect of the company’s functionality. It is the process the customer goes through when they buy your service or product. If your checkout process requires too many steps or is cumbersome and clunky, you may lose the sale.
2. Is it Legal to Start an Online Business in Saudi Arabia?
In 2019, the Ministry of Commerce and Investment (MOCI) introduced the new Electronic Commerce Law (the e-commerce law). This law will apply to these individuals providing services or goods via an electronic store in the country or any electronic platform that can be accessed by consumers in Saudi Arabia.
By opening up the e-commerce sector, the E-Commerce Law seeks to develop and stimulate the online commerce activity while regulating the relationship between all types of consumers and providers. Under this law, service providers must provide consumers with conditions and online terms of use.
The service provider will also have to disclose details of their trade, total price (which will include taxes, fees, and other related payments), and the services and goods provided. Moreover, to further govern the relationship between practitioners and consumers in the e-commerce realm, this law also requires service providers to issue an electronic notification to make it clear that it will blind the end-user in a contractual relationship. Check out more about tax strategies in the KSA.
In other words, yes, it is legal to start an online business in Saudi Arabia. In fact, it is encouraged by the government to improve the economy of the country.
3. How is the Registration Process for an Online Business in Saudi Arabia?
Registering an online business in Saudi Arabia is now easier with the e-service provided by the Ministry of Commerce, which enables beneficiaries to register their companies in the country, get a commercial certificate, and get a membership number in the Chamber of Commerce, without visiting the branches of the Ministry.
To register your company properly you must go through the following steps:
- Access the Ministry of Commerce website
- Enter and username and a password
- Next, the applicant must select the option “commercial registration” and then choose “issue commercial registry”
- Choose the commercial registration period between one and five years.
- Submit all data related to capital, fiscal year, facility address, and contact information.
- Confirm the request and select “send”
- The payment will be issued, and you will receive a text message on your phone.
- The applicant can pay the bill through the different channels
- After the submission, when the payment is ready, you can benefit from the service by simply printing the commercial registry without the need to visit any of the branches of the Ministry.
4. How can you Open an Online Business in Saudi Arabia?
Before starting your online business in Saudi Arabia, it is advisable you look for a business setup agency, like Company Formation Saudi, to help you understand every legal and administrative process involved in the setup of your business.The steps you must go through to establish your business are the following:
4.1 Choose your industry
First, it is necessary that you define the industry you wish to work in and the activities your online business in Saudi Arabia will perform. This will determine whether you should set up in mainland Saudi or in a free economic zone. This will also define the type of legal entity and license you require.
4.2 Business premises
From 2023, every company must have headquarters in the country if they want to acquire a business license and operate legally in Saudi Arabia. Therefore, if you are establishing a branch company, you will need to lease a business premise or work with a local service agent.
If you are starting a new business, you can either sign up for a license package in a free economic zone or take it on Mainland premises.
4.3 Business license
If you are a foreigner planning to form an online business in Saudi Arabia, you will need a business license. This is issued by the Ministry of Investment of Saudi Arabia (MISA). Once you have this, you can establish, invest, or buy a new company or set up a foreign branch.
You will also need to get a commercial registration certificate from the Ministry of Commerce and Investment at this stage.
4.4 Additional documentation
Next, you will need to obtain some documents from the Ministry of Commerce. Company Formation Saudi can help you with this process. We can also contact the relevant authorities to get your Commercial registration and the issuance of your Memorandum of Association. To confirm the setup of your company, you will also need to appoint a General Director and submit the following documents:
- ID and address for directors and shareholders
- Articles of Association (AoA)
- Copy of trade name confirmation
- Passport copies of shareholders and directors
- Bank references
- Memorandum of Association (MoA)
You should note that it is necessary that you get a business visa to live, work, and reside in Saudi Arabia.
5. Ideas for an online business in Saudi Arabia
To have a business plan, you must first know what your business will be about. Some ideas for an online business in Saudi Arabia are the following:
5.1 ICT
Saudi Arabia has the largest IT market in the region. Huge investments in health, education, and infrastructure have paved the way for advanced technology and security systems in the country.
The government plans for the IT industry to raise its contribution to the GDP by 20%. The IT market in the country was valued at SAR 3,6 billion and is expected to go up to SAR 4,9 billion.
5.2 Tutoring of English language
The interaction of Saudi Arabia with western countries is continuously increasing. Many qualified professionals are coming from different countries to work in different firms in Saudi Arabia. For this reason, the citizens are in great need to learn the English language.
Having a grasp of both languages (English and Arabic) means that you can earn a great amount of money by arranging English tutoring sessions. This is a good idea for a business in Saudi Arabia without sponsors. It is worth pointing out that if you want to see higher profits, it is always a good idea to seek financial advice.
5.3 SEO consulting
If you are a pro at SEO or in Search Engine Optimization, and you have skills and experience getting websites to rank highly on Google, then there are plenty of companies willing to hire your services.
Whether it’s by updating the company blog, editing metadata tags, or searching for smart keywords to rank highly on, a good SEO consultant can drastically change how a company’s website appears to search engine users.
5.4 Freelance writing
If you are skilled in words instead, you might become a freelance writer, so as long as you have a stable internet connection and a keyboard, you can contribute with blog posts. It also helps if you are an expert in certain subjects. In this way, your employers will know you are qualified to comment on certain topics.
5.5 Freelance coding and web design
If you are a software engineer, or you are into web design, freelance coding is the best online business in Saudi Arabia. Working for a startup or a tech giant offers a wide range of benefits. Also, you can double as a software consultant as well, offering your expertise and critical eye without necessarily coding.
5.6 Software and app development
If you want to take freelance coding to the next level, you can focus on software and app development. Instead of helping clients, you can work on your own programs, applications extensions, and add-ons. Whether you sell your work in the app store or make money through advertisements, the cash you make will be a direct result of your effort.
5.7 E-commerce store
Starting an e-commerce store is relatively cheap and easy, at least compared to opening up a brick and mortar store. If you are creative, you could craft your products and sell them on different sites. The biggest challenge of having a store would be getting discovered, depending on your niche and how viral your products are.
However, there are tons of advice available to help you out, from pricing your work properly to taking the best photography possible.
5.8 Telemarketing
If you are naturally talkative, and you like helping others, virtual telemarketing is another online business in Saudi Arabia to consider. Plenty of companies outsource some customer service staff and their sales. So, if you do not mind working on the go, you should try this option.
5.9 Online personal assistant
The job of an online personal assistant will depend on your experience, skills, and network of contacts. However, you can expect tasks from data entry to research, customer management, scheduling, and more. And of course, like all online business ideas, you can perform this from anywhere.
5.10 Transcription
For an easy online business in Saudi Arabia that does not require background knowledge or experience, you might consider transcription. Offering this kind of service online can take many forms, you can create captions for TV shows, transcribe audio interviews for reports, or develop transcribed versions of podcasts.
6. Benefits of starting an e-commerce
Some benefits you can enjoy by starting an online business in Saudi Arabia are the following:
- Convenience: Online commerce makes purchases faster, simpler, and less time-consuming, allowing for 24 hours sales, easy returns, and quick delivery.
- Global marketplace: Customers from around the globe can easily shop on e-commerce sites. This means that companies are no longer restricted by physical barriers or geography.
- Minimized experience: Since mortar and brick are no longer required, digital sellers can start online stores with minimal operating costs.
7. How can we help you start an online business in Saudi Arabia?
Company Formation Saudi is a specialized business setup agency with many years of experience in the field. Our professionals are highly trained to assist you in every legal and administrative process your company may need.
By working with us, you can enjoy a large range of services to guide you through the path to success. Let us ensure that you only get the best legal assistance from the most qualified team.
Our team is more than ready to help you create your online business in Saudi Arabia . You can always call us at +971 43 316 688. If you would like to request our services, ask about our packages and prices, and more, send us an email at anytime: contact@companyformationsaudi.com.