Tawaref Series: Understanding annual operating cost in Saudi Arabia

Tawaref Series: Understanding annual operating cost in Saudi Arabia

Maintaining a legal presence in Saudi Arabia is not a one-size-fits-all approach for any business, with the annual operational cost depending on multiple factors. If you haven’t already, we recommend you read our last article, where we discussed the various OpEx costs of landing in Saudi Arabia from a business owner’s perspective. In this piece, we will be putting the points discussed previously into action to provide you with more clarity on how they are translated into real life. 

For better understanding, we have outlined multiple sample parameters that may serve as a benchmark for real-life scenarios. For each example, we will calculate the total operational expense accrued for the year. In this way, you can identify which costs are applicable for specific business situations. 

Note: All scenarios are assumed to be for companies in their second year of operation. 

Scenario 1: Early-stage tech startup

In this example, we have an early-stage tech startup that:

Operates under an entrepreneurial licence from a hotdesk in Saudi

Is represented by a single General Manager who is a Non-GCC national.

- The general manager is a 30-year-old man who does not have any dependents.

- The general manager is salaried at SAR20,000/month.

Does not have any positive net income. 

Generates less than SAR375,000