Saudi Arabia’s Small and Medium Enterprises Authority announced today the launch of four initiatives to support and sustain the private sector.
The first one includes reimbursing businesses the government taxes fees that they paid or will pay during their first three operational years, should these businesses register (or are registered) between 2016 and 2021. The budget allocated for this initiative is 7 billion Saudi Riyals (around USD $1.9 billion) and will reimburse fees including the issuance and renewal of commercial register; Chamber of Commerce registration; Saudi national domain registration; publishing the company’s Articles of Association; municipality licensing and other commercial activities; and 80 percent of financial returns.
The second initiative aims at increasing the capital of Kafalah, a program designed to support SMEs by covering the risk percentage that investing parties take if a company they invested in fails. A budget of 800 million Saudi Riyals (around $213 million) was dedicated to this initiative, which targets enterprises operating in 11 different sectors.
The third initiative is indirect funding, which is dedicating 1.6 billion Riyals (around $426 million) to provide different funding channels to investment institutions, other than banks, in order to offer funding with a lower cost to SMEs.
The fourth is a VC fund targeting startups, aiming at bridging the investment gap and spurring more SME investments. The initiative is dedicating 2.8 billion Saudi Riyals (around $750 million) to serve this purpose.
Under the umbrella of the Small and Medium Enterprises Authority, these initiatives aim to regulate the private sector and develop it, while increasing SMEs’ contribution to the country’s GDP and economy. This mission will contribute to Saudi’s Vision 2030 and will create new job opportunities for the national workforce.