If you are considering starting a business in the Middle East, Qatar and Saudi Arabia are two of the most attractive options. Both have strong economies to support startups, and Saudi Arabia is seeing the emergence of more female leaders in the tech industry.
Like any country, both have their own unique advantages and challenges that require consideration. Factors such as their currency, taxes and visa requirements can have a major impact on your decision.
How Startup Friendly Are Qatar And Saudi Arabia?
In recent years, Qatar has been aggressively investing in creating a supportive business environment, producing some exciting startups to watch. The country has formed initiatives such as the Qatar Science and Technology Park (QSTP) to help foster innovative startups in tech, sports and sustainability.
Similarly, Saudi Arabia is also home to cutting-edge startups. The Kingdom launched their Vision 2030 back in 2016, which aims to create a society where citizens are able to thrive and pursue their goals.
Overall, both countries are conducive to startups although Saudi Arabia does have a larger market size to offer entrepreneurs.
Taxes
Qatar: The country does not have any personal income tax, while the corporate tax rate is 10% for businesses that are foreign-owned. With no Value Added Tax (VAT), it is a major drawcard for businesses who want to target consumers.
Saudi Arabia: Likewise, Saudi Arabia does not have personal income tax or VAT. However, the corporate tax rate is at 20%, double than that of Qatar’s for foreign-owned businesses.
In this case, Qatar does have the more favourable tax structure for startups.
Currency
Qatar: The Qatari Riyal (QAR) is the official currency of Qatar, and has a fixed rate to the US dollar. This offers more stability particularly for investors.
Saudi Arabia: The Saudi Riyal (SAR) also has a fixed rate to the US dollar, providing the same stability.
In this regard, both countries offer security with their currencies and are equally advantageous.
Language
Qatar: The official language is Arabic, although you will find that English is widely spoken even when conducting business activities. This can make it easier for foreigners to integrate into a business setting.
Saudi Arabia: Arabic is also the official language in the Kingdom. While English is spoken both in business and government communication, it is not as widely spoken in the rural areas.
A language barrier won’t be an issue in either of these countries, especially for English-speaking foreigners.
Cost Of Living
Qatar: The country is known to have one of the highest costs of living in the world, especially when it comes to housing and utilities. For residents, there are government subsidies to reduce the costs of healthcare and education, but these won’t apply for foreigners.
Saudi Arabia: The cost of living here is slightly lower compared to Qatar’s, and housing is more affordable. The Kingdom’s healthcare and education systems do have cost-effective options, although these aren’t always applicable to expatriates.
Overall, Saudi Arabia is more affordable which can make it appealing to entrepreneurs on a tight budget.
Visa Requirements
Qatar: Foreigners are able to acquire residency visas through employment or business sponsorships. Some industries have recently begun to allow 100% foreign ownership which can make the visa process a bit easier.
Saudi Arabia: Entrepreneurs can apply for business visas through programs such as the Saudi Green Card or the Premium Residency program. Likewise in Qatar, there are certain sectors where 100% foreign ownership is allowed.
Both countries offer a fairly streamlined visa process for foreigners and entrepreneurs. However, Saudi Arabia’s Premium Residency program is more flexible for long-term stays.
How To Set Up A Business In Qatar And Saudi Arabia
Qatar: The first step is to register with the Ministry of Commerce and Industry. You can then apply to the Qatar Financial Centre or Qatar Free Zones Authority for any relevant tax incentives. Some industries will require you to have a local business partner, but you can have full foreign ownership in the free zones.
Saudi Arabia: Firstly, you will need to register with the Ministry of Investment. The next step is to receive your commercial registration from the Ministry of Commerce. As in Qatar, free zones allow for full foreign ownership but a local partner is needed for some industries.
Where Should You Start A Business?
Both Qatar and Saudi Arabia are top choices when it comes to starting a business in the Middle East. Your decision will largely depend on your own needs and what you want to prioritise.
Qatar can provide a stable market with favourable taxes and a strong currency, but the high cost of living may deter some entrepreneurs.
On the other hand, Saudi Arabia has a larger market to offer with exciting opportunities under the Vision 2030 and a lower cost of living but a higher corporate tax rate could impact your long-term profitability.
