Saudi Arabia’s market is experiencing unprecedented growth, offering exciting prospects for international brands, particularly in hospitality, F&B, luxury, design, and agrifood sectors. The Kingdom plans to invest over $550 billion in new travel destinations by 2030, positioning itself as the world’s largest investor in tourism, with 150 million annual visitors expected by 2030.

Yet, entering and growing in a new market can prove costly. Based on the specificities and legal framework of the Saudi market, contracting a freelance Brand Representative is certainly the solution offering the best value-for-money, the largest freedom, and the least liabilities to international companies. Here’s why.

Specificities of the Saudi Arabia’s business culture

The power of personal presentation in Saudi Arabia

In Saudi Arabia, business thrives on personal relationships, known as “wasta.” For companies without a local presence, establishing these crucial networks can be challenging, which can be solved by a representative offering immediate access to their established network.

Moreover, Saudi culture permeates every aspect of business. Missteps due to cultural unfamiliarity can hinder commercial development. A local representative, well-versed in Saudi customs, can prevent such pitfalls and guide companies through the nuances of doing business in the Kingdom.

Building trust and maintaining presence

Trust-building precedes all business discussions in Saudi Arabia, with face-to-face interactions preferred over written communication. For foreign companies, this necessitates frequent, costly, and time-consuming trips. On the other hand, a local representative can meet prospects, potential partners, distributors, and clients regularly, fostering relationships crucial for business success.

Embracing localization and seizing opportunities

“Localization” has become a priority in Saudi Arabia, even in the private sector. Saudi partners seek committed collaborators who are readily available and supportive of the country’s development. A local representative demonstrates this commitment, being just a phone call away for impromptu meetings, which are common in Saudi business culture.

In addition, the Saudi market is characterized by a scarcity of reliable data and information. A representative on the ground can gather crucial market intelligence, identify business opportunities, and tap into personal networks where many private sector projects are shared through word-of-mouth.

The Saudi legal landscape

Cost-effective market entry

Registering a company in Saudi Arabia can be expensive and time-consuming. Additionally, the process can take several months in certain cases, requires to use the services of a local law firm and necessitate many steps between several administrations. Now, on the contrary, a local representative allows companies to commence operations immediately, at a fraction of the cost and without the complexities of company registration.

Flexibility and Freedom

Furthermore, opting for a local representative offers greater flexibility. If business prospects don’t materialize as expected, companies can easily terminate the arrangement without the complications associated with closing a registered entity. This approach provides a low-risk entry strategy for testing the Saudi market.

Navigating Saudization Requirements

The Saudization policy, or Nitaqat, mandates hiring Saudi nationals. This policy can significantly increase operational costs and HR challenges for foreign companies. A freelance representative circumvents these requirements, offering expertise without the associated employment obligations.

Overcoming Licensing Hurdles

Obtaining a distribution/retail license in Saudi Arabia can be prohibitively expensive for many international companies. The alternative—working through local distributors—comes with its own challenges, such as ensuring proper brand representation and consistent sales efforts. A local representative can manage client and distributor relations, ensuring the brand is effectively promoted and distributed.

Expertise in Local Regulations

Navigating Saudi Arabia’s specific market entry rules and regulations can be complex from abroad: registration of HS codes, certifications of factories and products with SFDA and SASO, translation of labels and so on. A knowledgeable representative can coordinate between the brand, local distributors, and logistics companies, ensuring smooth and timely registrations and shipments—a critical factor in a market where clients often make last-minute decisions and expect rapid order fulfillment.

Conclusion: The Strategic Advantage of Local Representation

Contracting a local freelance representative offers international companies numerous benefits for promoting and developing their brands in the Saudi market:

1. Immediate Network Access: Companies benefit from an existing business network, accelerating market penetration without spending years building connections.
2. Cost-Effective and Flexible Market Entry: Avoiding the expenses and complexities of company setup, businesses can opt for a flexible, cost-saving solution with no long-term commitments.
3. Continuous Local Presence: Companies save on frequent travel costs while maintaining a constant market presence through their representative.
4. Cultural and Legal Expertise: Representatives provide invaluable insights into local culture, legal frameworks, and business processes, ensuring compliant and culturally appropriate brand development.
5. Optimal Value for Money: This solution proves more economical than establishing a local entity, hiring a team, or maintaining frequent travel. It offers a simple, terminable contract without the burdens of taxes, office rentals, expatriate packages, or missed opportunities due to absence from the market.

Artemis Business Care is here to help you prepare your entry on the Saudi market, and to represent your brand in the country. With 25 years of experience in international trade, a large local business network, and an extensive knowledge of the local culture and legal framework, we offer you the best solutions to grow in the Saudi market and benefit from the opportunities that it offers.