Starting your Online Business in Saudi Arabia

by Jayati Gadamsetty 12, Mar 2024

The more we move towards digitisation, the more Saudi Arabia is gaining popularity for starting an online business. 

Table of Contents

The Kingdom of Saudi Arabia (KSA) is among the top 10 markets for e-commerce. The e-commerce market is growing at a rapid pace due to the: 

  • Young and tech-savvy population 
  • And support from the government

The country's internet usage rate is around 99%, and the e-commerce market size is estimated to reach 30.2 billion USD by 2028, making setting up an e-commerce business in Saudi Arabia a very lucrative opportunity.

Let us understand the process for starting an online business in Saudi Arabia.

How to Start Your Online Business in Saudi Arabia?

The Saudi Ministry of Commerce has built a platform known as ‘Maroof’. It allows small and medium-sized businesses to secure a free e-store for six months. Along with this commercial registration allows businesses to -

  • Expand in the local and international markets.
  • Reap the dividends of working in a growing e-commerce market.

Let's read about the steps for starting your online business in Saudi Arabia -

  1. Pick your Business Name and Logo

It is necessary to pick a name for your e-commerce company. While selecting the name, make sure it's following the rules set by the authorities. Register the name with Saudi Arabia’s Ministry of Commerce and Industry. 

Create a unique logo for your brand. This will help your customers identify and differentiate your company from others.

  1. Selecting a Business Model for your E-commerce App

The KSA offers two types of e-commerce business models for businesses to choose from -

  • Single Vendor
  • Multi-Vendor

Single Vendor - This involves two parties, the first being the seller and the other one being the buyer. Here, the seller will completely be in charge of the inventory and products. 

Multi Vendor - In this model, multiple vendors can sell their products on the same e-commerce platform. Every seller needs to handle their own products and inventory.

  1. Secure the Foreign Investment License

Submit the application to the Saudi Arabian General Investment Authority (SAGIA) to secure the license. The license is valid for up to 5 years, and the processing time can take from 15 to 20 days.

  1. Get Other Necessary Approvals from the Authorities

In order to conduct online business in KSA, you will need to secure approvals and licenses from the authorities mentioned below -

  • Chamber of Commerce and Industry
  • Ministry of Labour
  • Tax Authorities

  1. Complete the E-commerce Registration Process

Every business aspiring to enter the e-commerce sector in Saudi Arabia must register their business with the Ministry of Commerce. Submit the necessary documents to complete the registration procedure. 

Post registration, you will receive an e-commerce license and will be able to operate in Saudi Arabia.

  1. Create a Bank Account for your Online Business in KSA

Every business is required to have a bank account to handle their transactions. Selecting the correct bank is essential, so research thoroughly before you fixate on a bank. Compare the interest rates, benefits, etc.

Documents Required to Open an Online Business in Saudi Arabia

When applying for licenses for your online business in KSA, you will need to submit the necessary documents to the authorities. The documents need to be verified and notarised by a legal professional for setting up a company in Saudi Arabia.

The list of documents is mentioned below -

  • Identification Proof of Directors and Shareholders (Passport)
  • Certificate from Chamber of Commerce
  • Certificate of Commercial Registry
  • Employee Registration Certificate
  • Articles of Association (AOA)
  • SAGIA Investment License
  • Proof of Company Name
  • Incorporation Certificate
  • Proof of tax registration
  • Application Form

Starting your online business in Saudi Arabia is a great idea, yet it can be slightly difficult to navigate. Experts at Commitbiz are trained and have experience with business incorporations worldwide. Call us to understand the process and clear any doubts.

FAQs

Is it easy to start an online business in Saudi Arabia?

Starting an online business in Saudi Arabia is relatively straightforward, but it does require adherence to certain regulations and guidelines. You will need to register your business with the Ministry of Commerce and Investment (MOCI) and obtain necessary licenses depending on your business type. Additionally, you should ensure compliance with Shariah law, which governs many aspects of business in Saudi Arabia.

What are the popular e-commerce platforms available for launching an online business in Saudi Arabia?

Several popular e-commerce platforms are available in Saudi Arabia, catering to various business needs. Notable options include Souq.com (now Amazon. sa), Noon, Wadi, and Desertcart. These platforms offer a range of services, from hosting your online store to providing payment gateways and logistics support. Additionally, you can also opt to build your own website using platforms like Shopify or Magento, which provide customisable solutions for online businesses.

How can I ensure the successful delivery of products to customers across Saudi Arabia?

 Ensuring successful delivery of products to customers across Saudi Arabia requires efficient logistics management. You can partner with local courier services such as Aramex, SMSA Express, or Saudi Post for reliable shipping solutions. Additionally, consider optimising your inventory management and fulfilment processes to minimise delivery times and provide exceptional customer service. Offering multiple shipping options, including express delivery and cash on delivery, can also enhance customer satisfaction and improve your business's reputation.