The Kingdom of Saudi Arabia is on the verge of becoming the hub for foreign investors . From India to UAE, the business owners are looking for profitable opportunities for business setup in KSA. During an elaborative meeting, the minister of Investment of Saudi Arabia, Mr Khalid pointed out some opportunities. These included foreign investors business expansion in KSA. This was supported by Mr. Hatem, CEO of Business Link UAE and SAGIA authorities.
BusinessLink helps companies for business set up in KSA and grab fruitful opportunities for the benefit of the investors. As a foreigner, it is complicated to understand the functioning of KSA. However, with the help of BusinessLink, now companies can contribute to foreign investors business expansion and gain profit. Understanding the financial status with stats will help you assess the market better.
The value of foreign investors’ ownership at the end of the third quarter of last year was 145.05 billion riyals. This is huge compared to 16.50 billion riyals at the end of the same quarter of 2018.
Despite facing difficulties by the global economy, foreign investors increased their shares in the Saudi financial market “Tadawul”. This grew on an annual basis at the end of the penultimate quarter of 2020 by 37%. This saw a huge change compared to about 16.50 billion at the end of the same period of 2019.
Past year, foreign portfolio investment rates in Tadawul witnessed a growth. 21.4% during the second quarter, reaching 124.30 billion riyals, compared to 102.86 billion in the previous quarter (first quarter 2019). This rise continued by 16.7% in the third quarter, equivalent to 20.75 billion riyals.
A new foreign investment law passed in 2000. According to that, the Saudi Arabia General Investment Authority is responsible for providing you with the foreign investment license. This license can be used to conduct business in any part of the Kingdom without the need of any local partner. However, some activities such as medical and counselling are restricted. With the help of BusinessLink, you can smoothly finish the process and become a successful foreign investor in KSA and complete business setup in KSA.
Foreign investments require formalities and firm decisions. For expansion, you need investment and acquisition. The stats are witnesses that KSA is a booming ocean for investors. However, you can succeed only if you invest properly.
What Do Big Companies Do To Grow?
It is the stage of anxiety or tension that immediately follows success after the project stands on its feet and achieves small or large success. Moments of fear or anxiety begin to run through the veins of the entrepreneur or project owner. Every moment a number of annoying questions come to mind, such as What next? Where are we going? How do I stand longer and how do I beat the potential competition?
Yes, we should expand, but how?
Thus, the obsession turns from the obsession of fear of lack of success to the obsession of fear of weak growth (expansion of success), which is an important and inevitable obsession, but it may turn into an obsession that destroys the previous success unless the project takes the decisions of expansion or growth correctly and in accordance with the reality of the current stage heading towards with all ambition towards a clear future.
The four strategic expansion options for business setup in KSA:
- Market penetration strategy,
- Market development strategy,
- Product Development Strategy,
- Diversification strategy.
Market penetration strategy
In this option, you focus on achieving more sales of your existing products in your current market to increase your market share. This means more advertising and marketing effort to be able to acquire a larger percentage of the market share, expand your customer base, and try to make the most of the energies of your current market with your current products.
Example: Al Baik Restaurants Company expands in Jeddah (same market x same products) as the number of its branches reached more than 30 branches
Market development strategy
You focus in this option on selling your existing products in new markets. The idea of expanding in this option is to increase the market segments targeted by Market Segments, which will increase your growth in sales very significantly compared to the first strategy, and the reason is that the chances of Opening new markets with the same products are higher than the opportunities to focus on one market.
Example: The expansion plan of the McDonald’s restaurant company using the option of developing the market globally, as it copied the experience through the Franchise system to reach more than 36,000 branches in 118 countries around the world. They sell the same products (with minor technical modifications to match the culture and religions of customers in different markets) in new markets.
Product Development Strategy
In this strategic choice, you focus on selling new products in your existing markets. Opportunities for expansion and growth in this option involve a key premise (that your current market is able to absorb and thirst for new types of products which will enable you to resell your new products to your existing customers)
Example: The decision to expand Jarir Bookstore in the Kingdom of Saudi Arabia, which accompanied its launch of the slogan (not just a library) focused on the third option, which is the product development strategy. Jarir was no longer just a bookstore but was able to expand the range of its products in a very bold way to include in its shelves and its exhibition yards have other products such as computers, smartphones, library tools, drawing tools, architecture and a number of other products, as some estimated statistics indicate that book sales (the main and first product) do not exceed 5% of the annual sales volume.
In this last and most dangerous option, you focus on selling new, never-before-seen products in new markets where you have not worked before. This strategy is often followed in large and intercontinental investment companies, where they have tools, relationships and sufficient funding to conduct marketing research in new markets that have not previously been worked in and do not have sufficient time experience in them, and they are ready to implement the outputs of these researches and the new products that you propose to them to succeed in new markets and on which previous research and studies were conducted.
Example: The board of directors of a large-sized company working in the field of investment in banknotes and shares in Kuwait took the work in the field of hotel and tourism (which is a completely new product) in the Republic of Turkey (which is a completely new market), and this decision was correct, as the company has high cash flow that coincided In 2012 with the height of maturity of the tourism sector in Turkey.
The strategies work only with the right support. BusinessLink works as the catalyst for business setup in KSA to help you set up a business in KSA by overcoming all the hurdles. From shipping agents to scientific and technical offices, you can invest in any industry you perceive as profitable. Businesses worldwide are now showing interest in the flourishing industries of KSA. Collaborating with the authorities, companies such as BusinessLink, the foreign investors business expansion can witness a steep rise.
You can become one of the successful foreign investors in KSA and also fulfil business setup in KSA https://www.businesslinkuae.com/ will help you with its commercial services to set up your dream business in the land of Saudi Arabia. KSA is filled with business opportunities now. You have to strategic in order to expand your business. The first step would be researched, followed by availing of professional services. BusinessLink is supporting KSA in improving the foreign investors business expansion. They provide services such as SAGIA company formation, business visas, services licences and many more.
The professional team of consultants help you build your dream business within your budget. Thus, the Executive Director in Investor, Advisory and Relations (Ministry of investment of Saudi Arabia) highlighted the role BusinessLink. https://www.businesslinkuae.com/ is a service company based in the UAE that helps entrepreneurs to set up and grow their business in and out of the UAE. The process of foreign investment will become seamless when you hire someone experienced.