By Shaden AlRabiah and Amy Land Pejoska
This article is a follow up to the presentation at WSB Connect held at SheWorks incubator and co-working space on 20 March 2019 by Shaden AlRabiah, an Associate at Al Tamimi & Company Advocates & Legal Consultants, on options for expat and Saudi women to start businesses in Saudi Arabia. We have put together a summary of options relevant to freelancers, home-based businesses and entrepreneurs in Saudi Arabia.
1. Freelance – how to register for freelance and definition. The site to register.
Freelancing is a form of self-employment that allows you to work independently for one or more clients. If you are a linguist or have a skill you can teach, it can be a flexible option to pursue.
It is now possible to apply for the issuance of a freelancer certificate online through quick and easy procedures and to benefit from a range of employment-related services from the Saudi Human Resources Development Fund (“Hadaf”).
Freelance.910ths.sa (Arabic website) or Freelance.sa (English website) is an initiative from the Ministry of Labour and Social Development (“MOL”). MOL launched this portal to motivate and license freelancing work in the Kingdom. This programme is intended to have an impact by creating more opportunities for economic participation for Saudis. Regulations have been issued to provide protection to freelancers as well.
A freelancer can be employed or unemployed, and can even apply for financial support by registering and submitting a request after complying with the rules and regulations.
- MAROOF – how to register, the definition of categories and site to register
These days, e-commerce is a new leading way for everyone to sell or buy through online platforms and modern means of communication and women working from home are using social media to seek out a customer base more and more frequently. The use of home-based promotion of wares via social media can often be suitable for business-like activities such as craft production and baking. According to a recent news report in the Saudi Gazette, 27,000 shops are registered on the Maroof e-commerce portal in Saudi Arabia and half of those are run by women.
Maroof is an initiative from the Ministry of Commerce and Investment. It is a new and useful service to all e-commerce participants, whether sellers or buyers.
Benefits of Maroof:
- registration increases consumer confidence in e-commerce which could in turn increase business volumes for registered sellers;
- registration makes it easier for the seller to reach out to the targeted customers by providing a central place for customers to look for Saudi e-commerce providers;
- the service is free and the seller does not even need a commercial registration; a seller can simply sign up at maroof.sa (those merchants who include their commercial registration are awarded a Maroof Golden Certificate);
- consumers can evaluate e-commerce websites and experiences and report complaints; and
- sellers can register all their social media locations in one place, adding convenience for both sellers and buyers.
- Entrepreneur – Sagia site, categories, costs, CR advantages, time frames for goals.
If your business idea is more substantive and has a real chance of success, like a workable app or perhaps an entertainment-sector related activity, then you should consider formalising it, for example, by applying for an entrepreneur license.
The SAGIA guide sets out the nature of the entrepreneur license and the costs and timeframes for applying for one.
An entrepreneur license allows entrepreneurs to establish pilot projects accredited by Saudi universities or business incubators.
According to the SAGIA Guide, the documentation to be provided includes:
- the entrepreneur’s Board of Directors decision of its desire to get an entrepreneur license;
- the invention type, its sponsors and the powers;
- relevant identification (passport/iqama);
- a letter of support from the supervising authority (Saudi universities or business incubators) within the Kingdom;
- a letter of no objection from the Saudi sponsor if the applicant is a resident of Saudi Arabia.
Advantages of the entrepreneur license are its low license fee and its long duration.
The license term is five years and the fee is two thousand (2000) Saudi Riyals annually.
After five years, the entity will need to pay fees for obtaining services from the SAGIA Business Center in accordance with its classification.
Applications can be made through the SAGIA e-services portal. It is possible that applications may be processed within two working days according to the SAGIA Guide.
If you get that far and find that your business is growing, there are certain steps that may also be relevant, particularly if you are looking to develop an app.
- Preliminary advice on appropriate documentation relating to the App. The type of documentation that will be required can vary, depending on whether you are developing the App yourself, or whether you are having a third party do it for you. Additionally, it will be necessary to consider on-going requirements, such as the need for on-going support/maintenance.
If you are looking to develop and protect your brand, then you will need to consider:
- Preliminary advice on trademark protection. You will need to identify the appropriate classes and descriptions of goods/services and consider the core class or classes on which you should focus in order to ensure suitable protection whilst managing budget. It will be important to consider the ‘distinctiveness’ of the trademarks you are considering.
- Clearance search in KSA for a trademark in a single ‘class’. Prior to filing a trademark application, you should undertake a ‘clearance search’ to determine whether there are any prior third party trademarks that might act to block your own trademark application/s from being accepted. (A trade mark clearance search is not a strict requirement, but it is advisable as it can reduce the risk of a subsequent application being unsuccessful.)
We wish you the very best in stepping out as a freelancer, entrepreneur or home-based e‑commerce businesswoman or man in Saudi Arabia. Please contact Shaden AlRabiah on S.AlRabiah@tamimi.com about setting up your company or Amy Pejoska on A.Pejoska@tamimi.com about questions on tech-based business.