Start Real Estate Company in Saudi Arabia?

Saudi Arabia is a country rich in business opportunities, natural resources, and culture. Currently, the real estate sector is one of the most dynamic and profitable in the country. The reason is the great demand that exists for offices, homes, hotels, and shopping centers. If you want to start a business in this sector, it is essential to know what steps to follow to start a real estate company in Saudi Arabia.

In this article, we will explain the steps you have to follow to create your own real estate Company in Saudi Arabia. From legal, administrative, and financial requirements, to sales, marketing, and property management strategies. The idea is to give you the keys so you can launch your business successfully. Read on and discover how you can harness the potential of the Saudi real estate market.

Selecting Saudi Arabia (KSA) for Establishing Your Real Estate Business

Opportunities galore: Today, KSA is the largest economy in the Middle East and offers a wide range of investment opportunities. The government’s focus on economic diversification stimulates growth in the real estate and construction sectors. Saudi Vision 2030 has a comprehensive plan to transform the economy. In addition to giving top priority to the development of the real estate industry. As a result, it is the right time for entrepreneurs to enter the market.

Solid economic fundamentals: Saudi Arabia’s sound fiscal policies and economic stability provide a favorable climate for doing business. The country has a strategic location, a large consumer base, and abundant natural resources are some aspects that contribute to its economic resilience.

Additionally, the Vision 2023 reforms provide increased avenues for foreign direct investment opportunities. Especially for all foreign investors with intentions to invest in the real estate sector.

Favorable legal framework: KSA provides a transparent and investor-friendly regulatory environment. Currently, the government’s mission is to implement reforms to streamline the process of starting and operating a business. The idea is to reduce bureaucracy and improve efficiency.

Thanks to the establishment of the Saudi Arabian General Investment Authority (SAGIA) everything is simplified. Specifically, the procedures so that foreign investors can establish businesses in the country without difficulty.

In summary, establishing a Saudi real estate Company offers promising opportunities for entrepreneurs. Especially for those entrepreneurs who are willing to accept the challenges and rewards of this dynamic market. The key to success in this process is to follow all the steps precisely and start practicing without problems. A good recommendation is to seek guidance from experts such as Saudi Company Formation.

Advantages and Disadvantages of Establishing a Real Estate Company in Saudi Arabia

By establishing a prosperous real estate company in Saudi Arabia, entrepreneurs have access to several benefits.

The rapidly growing demand for commercial, industrial, and residential properties in KSA presents huge lucrative opportunities. Specifically, in high returns on investment in the sector.
Having a real estate company allows entrepreneurs to diversify their business portfolios. In addition, to mitigate risks concerning other sectors.
Over time, real estate investments are resilient to market fluctuations. Thus, stability and long-term wealth accumulation are offered.
By investing in a real estate company, entrepreneurs help contribute to the realization of Saudi Vision 2030. Thus, they can support the country’s socioeconomic transformation and sustainable development goals.

On the other hand, there are also some disadvantages of creating a real estate company in the country. Especially for foreigners, that is why below you will see some of these problems and possible solutions.

Not having cultural awareness: You have to have a good knowledge of the local culture before thinking about opening a real estate company in KSA. Especially when hiring workers in Saudi Arabia.
Work pressures are high: Although many companies have the custom of working a week from Monday to Friday, in Saudi Arabia this is not the practice. The work week in Saudi Arabia is on Saturday and generally ends on Wednesday.
Difficult to build good business relationships: The population of the Middle East also has closer relationships with people from other parts of the world. Sometimes, when trying to promote a business or other relationship, they can get mixed up with those of the Saudis. That is why it is important to study the country’s customs to make good business relations.

Essential Steps: Establishing a Real Estate Company in Saudi Arabia

Establishing a company in Saudi Arabia is a very good idea for investors from all over the world. For this reason, starting a real estate Company in KSA is a great opportunity thanks to the kingdom’s thriving real estate market.

In this way, this sector has become one of the most attractive investments in Saudi Arabia. Therefore, starting your own real estate agency or company is a great step to grow in the kingdom. However, there is a common question in these cases and that is, how to open a real estate Company. For this reason, we present the following steps if you want to establish your own real estate company.

Market Research and Feasibility Study

Before starting any type of business and studying the maze of regulations, you must conduct thorough market research. In this way, you must understand all the nuances that the Riyadh real estate market has.

In addition, you must evaluate the potential niches and the demand for specific types of properties in the country. This is a fundamental step for any new business and will help you lay the foundations for your business strategy. This way, you will be able to better understand the market you are entering and the competition you will encounter there.

Legal Structure and Registration

Now a new question arises, how to register a real estate Company in Saudi Arabia. Therefore, it is important to first know that companies in KSA have great flexibility to adopt different legal structures. Among these, we find Joint Stock Companies JSC Limited Liability Companies or LLC, and many more.

Choosing the most appropriate structure depends on the specific objectives and requirements of your company. For this reason, you can seek the help of lawyers in Saudi Arabia, legal experts, and business advisors and thus make the best decision. On the other hand, the process to register your company may involve acquiring essential licenses and permits.

Compliance with Real Estate Regulations

When knowing how to start real estate Company it is important to know what the regulations of this sector are. Therefore, knowing the following regulations is important:

There must be consistency between the total percentage of KSA and the capital. All this is according to the economic limits that are established for the type of activity.
If one of the partners was previously authorized by the Ministry of Investment, they must clarify their data when submitting the electronic application.
The applicant must enter all national identity details (Saudi/Residency/Premium Residency) if one of the partners has any of them or the commercial registry details of the Saudi companies that participated during the electronic submission of the application.
If it is related to real estate investment projects; The amount of the project to be built cannot be less than 30,000,000 Saudi riyals for land and buildings that are outside the reach of Medina and Mecca.

Financial Planning and Capitalization

The various business sectors in Saudi Arabia require various capital conditions. Therefore, it is imperative that you do financial planning meticulously. This way, you will be able to meet all obligations and keep all your operations smooth.

In addition, optimal management of your finances, banking, and taxes can be essential for the correct functioning of your company. However, this can be a difficult job if you do not have the necessary knowledge. For this reason, seeking help from experts can be a very cost-effective solution for your business.

Required Documents to Set Up a Saudi Real Estate Firm

Initially, in order to open a real estate company you need a real estate license in KSA. Below you will see all the documents and requirements you need to obtain this license.

Submission of the application through the website or electronic platform of the General Real Estate Authority.
Establish an electronic link between the General Real Estate Authority and the real estate platform after approval of the application.
Integrate with the National Access system to allow access to the same system.
Provide a special page to receive complaints and establish a mechanism to resolve them.
Publish a corresponding intellectual property rights policy.
Publish the corresponding privacy terms and conditions.
You need to know the terms and conditions of using the publishing platform.

Regarding the essential documents to apply for a real estate license in KSA.

Photocopy of the commercial registry of the shareholder partner from the Embassy of Saudi Arabia.
If one of the partners is a natural person who has the nationality of one of the GCC countries, he or she must present a photocopy of the national identity document.
Financial statements for the last financial year of the applicant company. To be valid, they must have certification from the Saudi Arabian embassy.

On the other hand, to make real estate ads in Saudi Arabia, there are certain requirements that you have to provide:

Advertising license number and name of the licensed advertiser.
Marketing and brokerage license number for brokers.
Property details, for example, neighborhood, city, street view, area size, property facade, purpose, price per square meter or unit price. In addition, the type of property, age of construction, basic services, the object of advertisement (rent or sale), and contact number of the advertiser.