How To Launch A Startup In Jeddah, Saudi Arabia

If you’re thinking of starting a business in the Middle East, Jeddah may be on the top of your list of destinations. This Saudi Arabian city runs along the Red Sea coast and is able to seamlessly blend ancient culture with modern innovation.

Whether you’re roaming the streets of Al-Balad or in awe of King Fahd Foundtain, one of the world’s tallest fountains, Jeddah is certainly a diverse city.

But with Saudi Arabia pushing its Vision 2030 initiative to diversify the economy, Jeddah is also becoming a business hotspot. So if you were to launch your own startup there, how would you go about it? Let’s get into it.

 

Why Start A Business In Jeddah?

 

Jeddah is quickly climbing the ranks as a top location for entrepreneurs and there are several reasons for this. Here are just a few of them.

Location: Jeddah is a major port city, which is a big drawcard for business owners. Given its easy access to Europe, Africa and even Asia, importing, exporting and e-commerce is on the rise.

Government support: As part of Vision 2030, the government is actively trying to reduce the Kingdom’s reliance on oil. As a result, they are offering more incentives, funding and backing the growth of new startups.

Lifestyle: Jeddah has an extremely high quality of life, with good schools, transport and healthcare.

 

Industries That Have High-Growth Potential

 

Technically, you could start almost any kind of business. Maybe you already have an incredibly niche and innovative one in mind. But these sectors in Jeddah are seeing particularly rapid growth and worth having a look at.

E-commerce: Consumers are shopping online now more than ever, resulting in increased demand for items to purchase online such as clothes, tech and even groceries.

Tourism: Saudi is gaining traction when it comes to international tourism with travellers visiting Jeddah more frequently. Tavel businesses, hotels and tourist experiences are all in high demand.

Technology: FinTech, EdTech and SaaS startups have seen a major surge in Jeddah thanks to government initiatives backing them.

Logistics: Jeddah has a large port, making it ideal for businesses who want to innovate the logistics or trading industries.

 

Accelerator And Incubator Programmes In Jeddah

 

As a new startup, having access to guidance and networking from early on can really make a difference in the trajectory of your success. Fortunately for those wanting to start a business in Jeddah, there is a solid support system through various accelerator and incubator programmes.

King Abdullah University of Science and Technology: Offers accelerator programmes, access to labs as well as housing for startup members.

Flat6Labs Jeddah: This is a top accelerator giving startups access to training and seed funding.

The Garage: A government-supported initiative designed to assist startups in tech and AI.

 

Funding Opportunities For Startups

 

Securing funding is another critical aspect for new ventures to consider. There are different ways of going about achieving this, either through venture capital firms, angel investors or government grants. Here are some of the options available to entrepreneurs in Jeddah.

VC firms firms and angel investors: Firms such as Raed Ventures and Impact46 offer funding to Saudi Arabian startups across the MENA region, including Jeddah.

Crowdfunding: This has become another popular method for raising funds and platforms like Scopeer are gaining traction in Saudi Arabia.

Government grants: The Saudi Industrial Development Fund (SIDF) supports startups in manufacturing and logistics. Another option is Monsha’at which provides grants and support to both local and international entrepreneurs.

 

 

Visa Requirements For Foreign Entrepreneurs

 

Even if you are not a Saudi national, it’s still very possible for you to start a business in Jeddah as long as you have the correct visa.

Investor Visa: This can be applied for through SAGIA which forms part of the Ministry of Investment and allows holders to run a business in Saudi Arabia.

Foreign Ownership: Some sectors allow foreign entrepreneurs to have 100% ownership which was recently approved by the Saudi government. This makes it much easier to set up a business without needing to have a local partner.

Residency and Work Visas: After the successful registration of your business, a residency permit can be applied for and work visas for your team if you have one.

 

How To Start A Business In Jeddah

 

If you are ready to take your business from an idea to a fully-registered business, here is a simplified process of how to get up and running legally in Jeddah.

 

Choose A Legal Structure

 

The first step is to pick a legal structure that aligns best with your business. In Jeddah, you have three options that are commonly used.

Limited Liability Company: The best choice for startups.

Sole Proprietorship: Ideal for one owner or freelancers.

Joint Stock Company: Suited to bigger startups who require a lot of investment and have multiple shareholders.

 

Apply For Foreign Investment License

 

An application can be submitted through the Ministry of Investment website. For this step, you will need your business plan, copies of your passport and of any other shareholders in addition to proof of capital.

 

Register The Business

 

The next step is to register your company name and business structure with the Ministry of Commerce and Investment. When approved, you will be granted with a Commercial Registration that will be required for opening business bank accounts and signing leases for work spaces.

 

Open A Corporate Bank Account

 

This can be done through Saudi banks like NCB and SABB which offer tailored business accounts for small-to-medium enterprises (SMEs). For this, you will need the Commercial Registration, tax number and your ID.

 

Register For Tax

 

This can be done with the Zakat, Tax and Customs Authority. For foreign-owned businesses, the corporate tax rate is currently 20%.

 

Should You Launch A Startup In Jeddah?

 

Starting a business in this diverse city may seem like a big step, but it can also be a highly rewarding one. Jeddah is full of so many opportunities, especially now, and it’s the right time to break into the market.

With plenty of startup support, access to funding and a growing economy, it’s an exciting business environment that is ready to welcome you.

Good luck!