Richard Wilson (00:00.966)
Hello, welcome to the 966-episode number 130, 130, a nice big round number. I'm your host Richard Wilson, and I hope you caught our previous episode number 129 talking about the Saudi film scene six years after cinemas were reopened after a 35-year hiatus. A great conversation with Todd Albert Nims on the sector, how it's grown, what still needs to be done, I recommend it to you.
I'm really excited not only about today's guests, but also today's topic, which is what you need to know when you set up a business in Saudi Arabia. Our guest is Saeed Al -Ansari, who is the founder and CEO of Tawaref a Saudi Arabia -based tech investment community that also provides startup advisory, legal consultancy, and due diligence support.
Tawaref, in collaboration with Wamda which is a well -known media site, and it's a venture capital firm that invests and supports entrepreneurs in the MENA region, has produced what I think is a rather extraordinary series of articles examining how to establish a business presence in Saudi Arabia. Lucky for us, today we get to talk with Saeed about this series and all that needs to be considered if you are thinking of doing business in Saudi Arabia. Saeed, hello, welcome to 966.
Saeed Al-Ansari (01:17.23)
Richard, thank you for inviting me. Glad to be here. And I think the first thing I want to talk about is like, I love your 966 as a number. It was amazing to know there's a channel called 966.
Richard Wilson (01:35.974)
Well, it's been fun, you know, in the run up to this discussion, cause you and I have talked a lot. we've talked about the series, we talked about, you know, how to put this together. and I want to get into that series because it's really valuable and I haven't seen anything else like it. But before we do that, can you tell us a little bit about Tawaref, what it is, what motivated you to establish it?
Saeed Al-Ansari (01:57.294)
Sure. So again, thank you, Nurture, and thank you for everyone listening. Hopefully I can add some value to your series of valuable talks that I've heard myself, a couple of people. So Tawaref is a Saudi startup company established in 21 back. We started our journey as a syndicate investment platform.
Kind of the largest network of angels in Saudi. More than 200, 300 investors are investing in tech. A bit selective in our selection. And then we added, we keep adding services on top of Tawaref on that angel investment. So now we have the way we structured Tawaref is it's an investment house, as you mentioned. But it also has a lot of consulting and legal services that complement our investments.
So, on the investment side, we don't have any more angels. We also have institutional investors, corporate VCs, family offices in the region, outside the region, who want to invest in the region for early -stage startup. We're going all the way from pre -seed all the way to A. That's our core business, actually, let's say. What happened in 23, because of money reasons, the economy reasons, recessions, but also...

towards too much of demand that people are getting in our investment platform. We learn the hard way that only being an investment or investor as a passive investor will not be enough. We need to be more active with our portfolio companies and with non -portfolio companies that want to come to Saudi. As you know, Saudi is booming, Vision 2030, everything is there, but the people looking for someone on the ground help.
support. And this is where in 2023, actually, only on day 22, the idea of consulting or services came in. And we sit with a lot of VCs. Almost every VC knows me, every angel group or accelerator. We work with them in a collaborative way. We sit together, what are the core services that you might be looking for to help both the companies, SMEs and startups?
Saeed Al-Ansari (04:24.718)
established companies. And we came up with a list of services and I think that's where we picked up one of those services is Saudi landing or the legal set up of the Saudi landing that we do. But we do a couple of other services now. We help in recruiting co -founders, recruiting JPs of these cities. We help in, I'll tell you in a while we'll talk about a couple of things we are doing on site, but it's a bunch of services. And now at the moment we are about to announce the marketplace.
Richard Wilson (04:32.582)
This is how it is happening.
Richard Wilson (04:50.662)
It's a bunch of services. And now at the moment, we're about to announce the marketplace. Where if you need a consultant in organization, you can get it. If you need a consultant in sales, you can get it. If you need recruiting consulting, you can do it. We're building a marketplace where we won't stop shopping for anyone who wants to.
Saeed Al-Ansari (04:55.022)
Where if you need a consultant in marketing, you can get it. If you need a consultant in sales, you can get it. If you need recruiting consulting, you can do it. We're building a marketplace, maybe one stop shops for anyone who wants to come to Saudi Arabia. So that's kind of the big picture of Tawaref.
Richard Wilson (05:13.926)
That's really interesting because there's is there anybody else doing this in the kingdom? And I say that because there's plenty of investment groups. And this sounds like an interesting collection of investors, a whole range of types of investors. And as you say, it's preceded a so that you're plugging in all along the line. There's also any number of incubators, you know, setups and entities that are helping startups, you know, get begin.
But you're doing both.
Saeed Al-Ansari (05:47.022)
So, the way we see ourselves, we are not a typical accelerator per se, you have to come in a program, there's the in and out, there's an intake and outtake. You're not a venture builder, you're not even a typical VC actually. I think we come very close to what we call the virtual accelerator model, where you can check, check and pick the services that we want, and you don't have to go a full program. So.
If you look at the accelerator incubator, there are a couple of services they've bundled together to help you to accelerate on the venture builder, right? The way we do it, we broken down those services into each service. And then you can cherry pick one purpose that we want. What we found out in Richard is most of the good startups don't want to go on accelerator for many reasons.
Saeed Al-Ansari (06:46.702)
Accelerators for some reason in the region at the moment I'm not picking the hype from the tier one startups. What we're looking for and the top startups comes to us, and we find out the best model for those startups and not just startup, we work with a lot of enterprises by them and SMEs and typical. They want cherry picking service, they want a legal consultant, and they really need cheap. They need it cheap; they need it fast. They need...
Saeed Al-Ansari (07:16.238)
an auditor and they needed fast, and they needed all its offerings They need fundraising. They need, so this is like 17 services all in all. I cannot go to all of the services, but they're like seven services all in all that people are looking for. And we, we try to make up a one stop shop. So, for example, one example that we get a lot by the way, they're more than 30 entities in Saudis. I think 30 plus who are giving grants in Saudis.
Saeed Al-Ansari (07:45.262)
starting from the tech ones like NTPP and others, but there are more than 30 by the way. And by the way, next week is the week of investment. The whole country has been talking about a lot of investments. There's no one stop shopping for all of them. If I am an agri tech and I want to know what the agriculture funds are there, I want their criteria and I can apply to one platform, it's not there.
So that's the vision we are coming with that can have a one stop shop for many things. Hopefully this vision will see a light one day.
Richard Wilson (08:23.75)
Fascinating. So, let's talk a little bit about the series in Wamda And this makes sense. You're talking about your decision that you needed to be a one -stop shop. You needed to expand your offerings. And you needed to make it sort of available on a menu basis. You can pick this. You can pick this. You can leave the rest. But so, the Wamda series, and Wamda is a really well -regarded publication, how did that start? Did they come to you? How did this work out? And for you listeners and viewers, how
I'll include links to this Wamda series. There are eight articles now that have been completed. They're all good and they cover a whole range. But anyway, how did this connection, how was this established?
Saeed Al-Ansari (09:04.494)
I think it's a combination of both, actually. So, we were looking for that, and they were also asking that, and I talked about Wamba, they are very well -known publication. I think it's better that they answer. I think there was a need for us to let the people know, because we get a lot of hits from the startup we're helping. Actually, one step back, before we started offering Saudi lending as a service, like one year at least, we held a lot of our portfolio for free.
Saeed Al-Ansari (09:33.55)
So, from helping those for free, we got a lot of answers that we thought, this answers could be in articles, and we can help a lot of people. And then we just, we were one of our partners actually was Wamda Capital, not Wamda Arm, the publication, they're two arms. So, I asked Wamda Capital, do you think this is something that maybe fascinates Wamda Publication? And then we met, and it sounds like everybody was looking at that time for someone.
Like everybody was asking about something about Saudi authentic and in English. So that was the gap that was there. A lot of article here in Arabic, that something authentic by a company who can put their brand on it and something more procedural, a tactical, a strategy that could be telling people how to do it was something that they were looking for.
And of course, this was a pleasure, an honor to be on Wamda and write those articles on Wamda. So, we were definitely happy and looking forward.
Richard Wilson (10:38.886)
I imagine it's gotten a great response. So just for, again, for our listeners, this series is built, it's intended to quote, provide valuable insights and guidance on various topics such as legal and regulatory requirements, key challenges, tips and tricks, how to manuals, sector specific information and opportunities for growth, showcasing the key hubs, do's and don'ts, common missteps and incorporation detail, facts that save money, unquote. I love that last part, facts that save money.
You know, we were talking beforehand and like I said, I'll list the eight articles in their titles, but we were talking about trying to identify the five sort of things that are the most common missteps. And I don't want to box you in with just five because you were talking about, you had examples, but can you tell us some common mistakes? You know, everybody's flocking to Saudi Arabia. Everybody thinks there's business to be done. Let's go. Let's set up business. And in fact, there's been regulatory reforms that make it easier. access is much greater than it used to be, but what mistakes are made in this process?
Saeed Al-Ansari (11:45.038)
Yeah, I think I would start with the last part, which is the good one, the best one I think, which is the government has gone a long shot and there's still a lot to come. I'm very close to some parts of the government. So, they're doing an amazing job. I think before I've started challenges, no government, I think with one or two exception, you have to go through 13 government agencies in the whole process. No government takes more than two or three days to respond.

except one or two, but I think 10 of them give you a response within two or three working days. That's amazing. I should be very frank. And that's even into the challenges. If every government is working so efficiently, then where's the problem? Why are people stuck? What's going on? What's going wrong? Why are people going so much in the round and circles and they're not open to open a company? And I've seen cases where six months, I got cases that are talking two months with a lot of people.
Saeed Al-Ansari (12:44.078)
And then they're still lost, kind of lost. And I talk to many governments these days. So, I'm talking to Korean, Chinese, all of GCC government, Jordan, Egypt. So, I'm talking on government level, helping the tech, 30 companies from X country to come to Saudi. It's a bulk thing now, not just one division. So, the number one issue, I think, and I think people know this issue and government knows this issue, which it's a scatter.
over 13 government agencies. So, the big picture is missing. Everyone comes to me like Richard, like sometimes after two, three months of research, Saeed, where to start? What's the first step? What's the last step? I know everybody is efficient, but how? This is the one stop shop kind of thing now. So that's the problem. If you know where to go next, it's like moving the file. If you know where to go next,
You can do it yourself. If you live in Saudi and you have the patience to live. A lot of people ask me, can I do it myself? Yeah, of course you can do it yourself. If you live in Saudi, you are patient to have a lot of trial and error and go visit physically yourself, you can do it. It's not rocket science, by the way. It's just opening a company. It should be much easier than this. But unfortunately, at the moment, the problem is you have to go through 78, 80 agencies, all in all. So, the big picture is missing now. Most of the people don't know how much time.
Richard Wilson (14:07.942)
So, the picture is missing. Most of the people don't know how much time.
Saeed Al-Ansari (14:12.718)
how much money, what are the requirements? They know the requirements of each entity. Now, Alhamdulillah, MISA is super active, Ministry of Investments, they are super source. So, like everybody knows the requirement of MISA, but after the MISA, they go to what I call the dead valley. They go into something that they don't know what to do. So, the number one problem is, so a lot of people come to my site, Doug's lawyer told me that's going to be one month to open a company. something that you don't know what to do. So, the number one problem is, a lot of people come to me and say that this lawyer told me that's better than one month.
Saeed Al-Ansari (14:41.966)
Yeah, it could be two weeks or three weeks. But there's whole pre -work that needs to be done. And there's whole post -work need to be done to get the iqama to get the bank account. Opening companies is a small part of the whole process of being fully compliant. And it's like 18 step process that takes four to five months. So that's the number one issue here. Yeah, go ahead. I think you want to say something.
Richard Wilson (15:09.062)
So, this, so when, when, when somebody comes to you and you, but you put your finger on something that becomes clear, it becomes very clear in these articles. And it's one thing to open up. It's one thing to do the legal necessaries to establish your business. It's another thing to staff it to do all the HR requirements and comply with all the regulations in terms of having employees on the ground.
Richard Wilson (15:38.342)
And I thought that was very interesting because your series goes, you know, goes from A to Z. I mean, you from setting it up to here's how you put people on the ground. This is how you deal with commas and health and all these sorts of things.
Saeed Al-Ansari (15:51.598)
So, the way I just divide it into four parts and many of the people forget the three parts out of four. They just know the second part. So, the journey start at your home by the way, where you need to get all your paperwork attested by Saudi embassy and foreign affairs in your country. And I work with at least 10 countries now. Some countries take it two weeks, some countries take it six months to attest the papers. So, it's all...
Saeed Al-Ansari (16:21.038)
People forget this part that is very focused on your country because you need to file a lot of documents before even start. And now, alhamdulillah, we have you're offering a station in Dubai, in Egypt, in Pakistan, I think in Singapore. So, we are also covering that the station because we saw a lot of people stuck in attestation. I have a South Korean, South African company, hopefully they are listening to me. They've been stuck for four months now to attest the paper.
four months just to test the paper and the release test three times and it's still taking some time because of mistakes. So that's the first part, which is the test station part. Once the documents arrive to Saudi, then we start the incorporation process, which takes three to four to six weeks. It's a very small part. Once we finish the second part, most of the people just look at the whole picture just in incorporation. They forgot the test station. Once you have this company established,

Saeed Al-Ansari (17:18.158)
And you go to a common bank, which takes another month. And then only you go for all the kinds of registration, which is like VAT and tax and social security. And these are four parts of the journey. The attestation, incorporation, a common bank, which is rising and then all the other registrations. So, this whole journey takes kind of four months that I mentioned. Right.
Richard Wilson (17:45.606)
The whole journey, all four parts.

Saeed Al-Ansari (17:46.474)
All four parts, like four to six months. Yeah.
Richard Wilson (17:51.046)
And how does that in your experience and you said you've dealt with a lot of other countries; how does that compare with other countries?
Saeed Al-Ansari (17:58.83)
So, I know my own personal experience in one of two countries where I have my own company. But I think the complexity comes when it is taken incorporation is very easy by them and very simple, very straightforward, getting very automated by them. The real challenge comes when you come on the labor side. When you start hearing your first say, come on, if you have two co -founders, then two, it comes and that challenge of having to come on.
And then you have to hire a Saudi and then get costs goes very much higher. And that's the, I think that the last article we issued is the operational cost of labor. If you want to have a labor and we did comparison of having Saudis and non-Saudis and how this affects your operational costs and the real number actually, we gave real number two case scenarios. So that's the point I've seen people taking, especially publicly listed companies taking three, four months to get open bank account.
and can take a bit of time. So that's the, I think, people where a lot of people stuck in the labor side of the game.

Richard Wilson (19:09.478)
And that came through in the series that you did. And another thing that came through is there's a lot of people charging a lot of money to do this.

Saeed Al-Ansari (19:19.214)
Yeah, I know this is a big thing in the market. So, two things here, Richard, and we're very frank on both sides. And I try to be mediator rather than kind of play one side favor versus other.
Number one is, we publicly mentioned this, right, in one of the articles on the hard cost of Saudi. The government fee for a typical company, but now like if you're a hospital or your factory, you need certain extra licenses. But I'm talking about traditional business, which doesn't require extra licenses. The government fee for one Iqama, one company, small companies, around 20 ,000 riyals.
And we mentioned this publicly because a lot of people asked this question. Yes. Now the question is what's going on in the market of setup on the set-up industry, what I call. There are three categories of set up industry. There are freelancers who are doing it as a one -man show and they are charging anywhere. If 15 ,000 real on top of the 20 ,000, which is the hard cost. And then there's a boutique like us were charging.

anywhere from 20 ,000 on top all the way to, I think I would say 60 ,000 or 50 ,000 on top of the amount. And this is for four months of work. And I'm not defending myself, but it's a full month of work with lots of physical visits, by the way, from lawyers. So, I think the cost is a cost element that people don't understand. And there's an issue also here because some of the neighboring countries are.
much easier to establish company, the whole process. People believe that it's the same thing here. And number one, number two, also most of the countries surrounding Saudi have lower living standard than Riyadh. Riyadh is very expensive now. It's getting more and more expensive. So, people also understand the cost element. And actually, it's one of the challenges that I usually see. It's a poor planning of financial and time for coming to Saudi. So.
Saeed Al-Ansari (21:33.742)
So, I would say, I don't want to say a good number or bad number, what's the fair price. There are multinationals, we're working with a lot of multinational companies that are charging anywhere from 100 plus thousand real, 150. I've seen up to 300, very rare cases. But then there's a difference, all different packages. I would say this is, please, please, this is my personal opinion. This is not a public opinion. This is just Sayeed's opinion. I would say something between 45 to 60 is good.
Saeed Al-Ansari (22:02.862)
amount, all in all, just for opening a company. This excludes the attestation cost. Attestation cost could go like four, five, $7 ,000 in Dubai. So that's another cost you have to plan on it. And there's a third cost, which is the visa cost from the embassy. Because the embassy charges extra amounts for the agent of the embassy based on the country you are in, there's specific costs. So, there are three elements of the cost.
Saeed Al-Ansari (22:30.382)
One of the key challenges, Richard, we are talking about key challenges. Most of the people, especially early-stage startups, right, which are very much on the cost, they don't plan for the whole thing. I have a startup now who got stuck because he didn't count it as station cost. And all of a sudden there are four or $5 ,000 that he has to pay more, which he cannot pay. So that's kind of one of the challenges I would say has to do with pricing.
Richard Wilson (22:55.846)
One of the challenges I would say has to do with the pricing.
Saeed Al-Ansari (22:59.95)
people don't properly plan for the financial as well as for the time expectation. I have a case now, he keeps pushing me, say I need the company within three weeks because I promised them my board that it's going to be open in three weeks. I would say, but why did you promise the board? What should I do if you have promised the board the government's going to change? If you promise the board and he's like keep calling me, say, tell me what I tell my board and I'm going to open a company in Saudi within three weeks.

Richard Wilson (23:31.07)
Well, so I want to quickly name the series articles that have been published. The names of the first one navigating Saudi expansion to an entrepreneur's journey in Saudi Arabia from bootstrapping to big bucks three a blueprint for foreign investment success in Saudi Arabia For truth, but the truth behind Saudi landing hard cost. That's what you just discussed.
Categorizing Saudi setup partners by soft costs, Saudi corporate annual operating costs explains an understanding annual operating cost in Saudi Arabia. This again, these topics and the things you get into is why I thought it was really striking and really important. Because these are the hard facts of doing business in Saudi Arabia. And most people like that lawyer trying to tell his board he can do it in two weeks don't know what they're doing.
But it is exciting and is it exciting to have all this interest? There's a lot of companies coming to Saudi Arabia, yes.
Saeed Al-Ansari (24:36.398)
Yeah, so yeah, as I told you, I'm a player in this market and I'm talking to at least four or five different governments or government entities who want to now send the bulk of like 30 companies in Saudi, not just one company. So, there's a government now pushing the companies to expand their sector. So definitely, and the publicly announced numbers last year, just the tech entrepreneurs license last year were 350.
by MISA that was announced by MISA the prince the minister had the plan the minister of investment has announced that we got all the way from 3 000 foreign companies in 2018 all the way to closer to 30 000 foreign companies last year so that's a big number right so the facts are there i think one thing i want to talk here of richard about
One mistake that people make a lot of mistake because has to do with attraction, right? People believe there's a lot of white, right? New York is there, the Red Sea is there, a lot of Giga projects going on. People, especially those who come from the West side of the world. They believe that selling in Saudi is easy. It's going to be easy. We know everything. We have the knowledge. They come from the most advanced part of the world. And...
It's not easy. If you go to our second article, which is the journey from the entry Saudi to all the way to big bucks. It's not easy to sell in Saudi, by the way. Everybody here is trying to sell. It's very competitive. So, landing does not always mean that you can easily sell. You need to understand how to sell in Saudi. Actually, that's maybe the next one. Maybe we can have the next series in one bar. We have an old product about selling in Saudi.
to sell because the next very revolutionary part that is coming from landing in Saudi legally is people asking me the next question which is how to sell in Saudi? How to get government projects? How to get new projects? How to get to Aramco? And selling in Saudi is really a big issue and one of the things I found, and this is advice for everyone coming, please don't underestimate the value of having a Saudi GM

That's me. I've seen people. I can give you 10 example at least of companies who struggle for two years. The moment they hired a Saudi GM or co -founder, if there's a tech star, the sales going up. You need to have someone who understands the local culture. So that's very important to understand how to eat. Saudi has a lot of grants, a lot of ways to get in, to tie, but you need to know how to get into these circles or get the money.
Richard Wilson (27:36.166)
I think that's a terrific point. Previously, a decade ago or 15 years ago, you needed to have a Saudi partner to do business. You can come in and do business with that one now, but that doesn't necessarily make it a good business choice to do so. And that's directly to your point, which I think is on the money. So, this has been a great conversation. Really, I know there's a lot you're leaving in the bag because there's a lot more that you're familiar with. But.
Is there anything you want to add? Cause I think this has just been really informative.
Saeed Al-Ansari (28:11.118)
You know, I should first of all thank you, I mean, hopefully it's informative. I think two things just to conclude here. One is, and both of them are advice, please plan properly. You need to plan at least six months ahead how to come in Saudi. I'm not talking just the legal side, talking Saudi landing, I divided in four parts. A legal setup.
The business development, fundraising and all kinds of fundraising, &A or tech fundraising, or investment or JV or all kinds of requests. And the fourth one is the on -ground support, which is recruiting, hiring, building the company on the same site. So, plan properly, plan properly because a lot of things happen. People do a lot of wrong planning that I see. I've got people who already have the license. And when I look at the license, it is full of mistakes.
There's a tech company and we've got a license of logistic company, which is totally wrong. So that's one thing. And it's the second thing is that Saudi is a different culture, right? For people coming from outside. So, it's always good to come like upfront before you even think of landing in Saudi and build the tires here for two, three months, six months. It's easy to come now and do this reason.
on its already diverse with the nationalities. So come in Saudi and try to understand the market, how this work. There's a lot of wives there, that people got here, and they get stuck. I've seen people coming and I'll seem to be very frank, I've seen people leaving, shutting down. So that's why I don't want to hear a lot of people coming and then shutting down to be very frank. I really want people to come and expand here in Saudi and there are a lot of opportunities. It's just you need to have good time, like one or two months.
of coming to the hubs and understanding how the market works. So that's the two things that I would advise. And hopefully one day, the Tawaref will become a way that we can support you in all kinds of aspects, not just one aspect, which is the legal setup. But yeah, but I think a lot of other smart people are helping here.

Richard Wilson (30:32.486)
Our guest today, Saeed Al Ansari who is founder and CEO of Tawaref which is a fascinating operation and entity, which appears to be growing and thriving. Saeed, this is gold. This is really good commentary and really good content. Thanks so much for being with us today.
Saeed Al-Ansari (30:50.958)
Thank you so much, Richard, and all this. And thank you for your patience in making this happen. I know you took a lot of time to be able to do that. And you're very patient, Richard and thank you for our audience of 966. Hopefully we'll see you one day here in Saudi Arabia.
Richard Wilson (31:05.318)
Absolutely, it won't be long, and it was well worth the wait, Saeed I look forward to seeing you in person soon.