When the SR2400 fee was announced for Saudi companies that employ expatriates in excess of Saudis, I started laughing. If I didn't laugh, I'd cry. As someone who owns a small tech business in the Kingdom, I am burdened with fees and red tape by a government that claims to have a commitment to entrepreneurs. The IT sector in Saudi Arabia is in dire need of innovation and experienced skill sets and myself and my family have both. A few years ago I set up a Saudi establishment in the hope of marketing IT services at a very reasonable price to small Saudi companies. To open the doors of my establishment cost just under SR60,000 and friends assured me that they were amazed I'd been able to manage with such a tiny amount of startup funding. It took three months and a lot of misery to become a legal establishment. First, I had to find an office to rent. The small single room in a suburb of Al Khobar cost SR18,000 annually. I had to get an official receipt and pay the real estate agent's fee. That was SR2,000 more. Then the work to renovate the decrepit office space added SR13,000. The purchase of an air conditioner, and all office furnishings and fixtures totaled SR7000. While the physical construction work on the office was in progress, the government's required paperwork was underway. The registration of the establishment, Civil Defense and Municipality certificate, and complying with the requirements of the Labor Office, GOSI, Zakat, Saudization and the Chamber of Commerce, took two months and SR10,000 between the government's fees and the government agent's fees. As part of the process I had to create an official stamp, letterhead and even an “inspection” signboard that was put up for 24 hours before it was torn down and replaced with a more attractive signboard. The final SR10,000 of my startup funding was spent on a couple of decent laptops, a printer, a telephone set, telephone and Internet connection. The day my establishment began operations, I was SR60,000 in debt before I'd recruited a single employee or found any clients. Fortunately, it was planned that my relatives would be my employees. But I had to immediately start paying salaries and the overhead costs of running an office. I was lucky, and within two months had paying clients, but the expenses were mounting, too. I needed to set up a website and create some marketing materials. Fortunately, I had a job and was able to keep subsidizing the business costs. Somehow we struggled through the year. When it came time to renew the Zakat certificate, I was forced to pay tax even though I was massively in debt. My establishment was assessed Zakat not on my real profit or loss, but on the value of the contracts I'd won during the year and my business activities as stated in my Corporate Registration. The most ludicrous thing about the entire business is that to this day my IT establishment is not run from the official office space, but from the house that I own, which is around the corner from the registered office. Although the deed to the house is in my hand, I cannot use the house as my business address since the width of the street it is located on is less than 30 meters. This is although my IT services establishment is a business to business operation that receives no customers and its only employees have residence in the house. The person who profits the most from my business is the landlord from whom I rent my office. He creates no jobs for Saudi Arabia and yet I must pay him the rent a year in advance to keep my business legal. Every time my establishment becomes stable enough that I would consider adding another employee, the government imposes a new fee or more regulations. As one of the minority of women in this country who have been gainfully employed long enough to collect a pension someday, and who have survived the startup of a tech business, it might be thought that some bureaucrat would care to ask what could be done to help my establishment thrive. That has never happened. There is a lot of talk about assisting fresh graduates to become entrepreneurs, but in reality it is older, skilled Saudis who have the best knowledge and networks to drive a small business to success. Unfortunately there are neither incentives nor support for them to put their decades of market knowledge to good use. As a nation, we have tens of thousands of people in their 50s who retire each year and contribute nothing to the business community for the rest of their lives – except perhap to become landlords and collect rent. Is that the best way to grow the prosperity of our nation?
