Saudi Arabia is the largest economy in the MENA region, accounting for around a fifth of its total GDP. It is also home to one of the fastest-growing economies in the world.
As the country continues its diversification efforts to reduce its reliance on oil, we can expect this trend to continue. And no industry is better placed to benefit than construction.
There are currently more than 5,000 active construction projects underway in Saudi Arabia, from record-breaking mega-builds to numerous residential, corporate and infrastructure developments.
So, if you’re considering starting a construction business here in the Middle East, here’s why Saudi Arabia could be the ideal location.
Overview of the construction industry in Saudi Arabia
The total value of construction projects currently underway in Saudi Arabia is estimated to be over USD 819bn. Within this are vast projects like The Line, the 711-property Norlana residential development and Utamo, a world-leading immersive destination for art and entertainment.
There are also hundreds if not thousands of projects that never take the headlines. From office blocks and leisure facilities to villas, mansions, houses and apartment buildings.
In all, the construction industry accounts for around 7% of Saudi Arabia’s economy, making it the second-largest non-oil industry and one of the country’s largest employers.
We can expect this figure to increase in the years ahead. Saudia Arabia’s Vision 2030 National Development Plan is set to increase the value of the construction sector to over USD 91bn by 2029.
Starting a construction company in Saudi Arabia
When you work with the team at Creative Zone, we will help you establish your construction business in Saudi Arabia in just five simple steps.
Step 1: Choose your jurisdiction
The first step is to decide on the most suitable jurisdiction for your business. You can opt for a Saudi mainland setup or establish your business in one of the special economic zones. Each jurisdiction has its own benefits and regulatory requirements, so it’s essential to consider which aligns best with your business goals and activities.
Step 2 – Define your business activities
At this stage, you will also need to outline your intended business activities to ensure you are correctly licensed. There are many sub-sectors within the construction industry, from project management to excavation and engineering.
The team at Creative Zone will ensure all relevant activities are listed on your license application.
Step 3 – Trade name registration
With your structure and required license determined, it is time to choose a company name. At this stage, you must be sure to choose one that is not too similar to any other business. It must also be free of any words or phrases likely to cause offence.
Step 4 – License application and approvals
You are now ready to apply for your license and approvals from the Ministry of Investment Saudi Arabia (MISA). As well as your completed application form, you will need to submit all supporting documentation.
At this stage, you must also get your Articles of Association notarised and register with the relevant government departments for taxation, insurance and employment.
Step 5 – Receive your license and open a bank account
Once your commercial license has been issued, you can open a Saudi Arabian bank account to make and receive payments.
Licenses are usually issued within two to four weeks, depending on your business activity.
Benefits of starting a construction company in Saudi Arabia
Market demand: Demand for construction services has never been higher. Through its Vision 2030 Development Plan, Saudi Arabia is publicly committed to investing billions of dollars into its infrastructure over the next few years.
There are numerous industrial, infrastructure and residential developments with many more on the horizon. Gain a reputation for fast, quality and cost-effective work and your business is likely to be in demand for the foreseeable future.
Regulatory changes: The Saudi government has implemented regulatory reforms in recent years to make it easier for foreign-owned businesses to operate. This includes streamlined licensing processes, improving legal frameworks and simplifying the visa rules for investors.
Tax and financial benefits: Foreign entrepreneurs and business owners benefit from minimal income and sales tax liability, as well as a great support network, particularly for non-oil-related businesses.
The country’s rulers are offering billions of dollars to support construction businesses across a wide range of projects to create a broad, strong and futureproof economy outside of oil production.
Growing economy: The International Monetary Fund predicts Saudi Arabia’s economic growth to outstrip the global average by almost 1.5% next year. Beyond this, GDP is expected to rise by over 3% year on year up to 2029.
These are ideal conditions for newcomers to the market, with long-term growth offering greater stability and more potential opportunities.
Lifestyle benefits: As well as a large and growing economy, there are many more great reasons to set up in Saudi Arabia.
For one, the country has an incredibly low crime rate and regularly ranks among the safest countries in the world. It recently topped the list of the most secure nations in the G20, beating South Korea, the US and many EU countries.
Saudi Arabia also performs well on the global stage in terms of both education and healthcare.
Why work with Creative Zone
Every business wishing to operate in Saudi Arabia must obtain the appropriate licenses. While the company formation process is designed to be straightforward, it can be daunting for those unfamiliar with the local procedures.
That’s where Creative Zone can help. We have a long and successful history of helping investors start new lives here in the Middle East. Our dedicated team is well-versed in the region’s business and real estate markets and the complexities of the immigration process.
When you work with us, you get fast, reliable and unbiased advice on your unique business setup requirements. We can help you choose the right kind of license for your business activity and take you through the entire process from start to finish.
We’re here to assist every step of the way. No matter your chosen activities, legal entity or visa requirements, we’re on hand with support, guidance and expertise. So, if you’re looking to lay the foundations for life in Saudi Arabia, Creative Zone is your ideal starting point.
Get in touch today to take the first step towards setting up your construction business in Saudi Arabia.
