I know I've been on hiatus for sooooo long, but I do apologize to those who found some of the information on my blogs to be of benefit. I won't go into the reasons for my disappearance here, I'd rather mention it at the personal blog.
I received an e-mail from a brother named Abu Aasiyah. He asked a few questions about the whole Foreign Investment subject, and --with his permission-- I will post his e-mail as long as my answers so that others may benefit as well. As for the text of the e-mail (with some editting):
My name is Abu Aasiyah.
I benefited from reading your blog, may Allah reward you with good. I had a few questions I hope you can help me with. Inshallah in a couple of months I will be traveling to Saudi to research and start a business. Everyone I have spoken to insists that you have to go and check it out before starting a business. But with the cost of airfare and time away from work and limited start up capital I want to make as few trips as possible so that the majority of my money can be spent on the business rather than research.
From running a business in [Country Omitted] I know the major expenses can be accommodation and renting the location to operate, especially when starting a new business and you have lots of start up expenses like rent for yourself and family warehouse/storefront or land. The business can take a long time before making a profit and you end up going out of business before you are in it.
So I thought to buy the property (i.e. apartment above a store or land for the business) would be the safest route as it would cut down a lot of expenses, as it takes time to grow.Here we have store fronts with apartments above them, where the owner lives on top and runs his business below. Is it possible to get one for 40,000 to 50,000 US? Does this even exist?
How would someone like me who speaks no Arabic go about finding a real estate agent who speaks English, and who is familiar with commercial properties?
Also the dream to live in Mecca or Medina --even if not possible to own a business there-- the closest city would be my next best choice as I could still be within an hour or two from either city, but I am not familiar with the geography. Do you have any suggestions to any cites that are close by?
I have some friends at the University and others who are working in the country --but just like yourself-- are so busy with their studies, they cannot leave school or work to be my personal guide for two weeks translating for me around the country. Do you know of a trustworthy brother with some business sense that I could hire to run around and assist me?
I had a couple of ideas, but I haven't decided what will be best until I get there and see. Can I start the paperwork process before I get down there and decide on the business, or do I have to submit a business proposal beforehand?
Please forgive me for bombarding you with so many questions any information you can give me will be greatly appreciated.
As-salamualaikum Wa Rahmatulahi Wa Barakatuhu
First of all, Abu Aasiyah (and anybody else that might be interested in living/investing in Saudi Arabia
), I would advise you to do exactly what you're doing right now, Research & Development. Investing your life savings (or even part of them) is a BIG THING. Especially if it is going to help you to possibly make Hijrah (migration) for the sake of Allah.
You don't necessarily have to come here, but it would be a good investment to come to find out if Saudi Arabia
is the place for you or not. I know it might sound very disencouraging, but I've seen people that wanted to move to Morocco, Egypt and even Yemen for good, yet they end up coming back after a very short stay. They would've brought tons of money over (compared to their overall savings) and might have even liquidated their assets in their original country. So let's face reality and accept that not all our boats might sail in the direction we want them to. Also, let's remember that all our worldly and religious affairs are in the Hands of Allah, once we have taken the means to mae them fruitful, we depend on His Tawfeeq (allowing of success) to reap those fruits.
I know quite a few foreigners that have come to Saudi Arabia
to invest and have successfully migrated here. All of them, at one point or another, came here first Whether it was `Umrah
, they came, they saw, they thought and then... they acted. There are a few people that have applied without coming, and it's not hard at all to apply while still in your home country. The best thing to do is to invest in a field that you have some experience in. I'll try to go in depth in later posts as to the different fields that you can invest in.
The major expenses here, after the initial costs are office rental, and accomodations for you and your family. As for buying a property, the Investment Authority
allows you to buy a property for your business or even to buy land for a home or factory as long as it is not in Makkah
. It's pretty obvious why foreigners are not alowed to purchase land in the two Holy Cities, but I personally would never want to live outside either one of them. For those people that would like to live in Makkah
, then it's possible to apply for your business in Makkah
or in Jeddah or in Taif. Makkah
has a lot more business in it than Madinah
does, and Jeddah is the business capital on the Saudi West Coast. Both Jeddah and Taif are less than an hour's drive from Makkah
, so they are ideal for owning property
in. 40,000 USD comes out to 150,000 SAR (Saudi Riyals) and 50,000 USD comes out to 187,500 SAR at an exchange rate of 3.75 SAR to 1 USD. To tell you the truth, you might only be able to buy a decent size piece of land at that cost. The best thing you can do right now, is invest that money in your business (while paying rent) and then once you have gathered double or triple that amount, you might be in a better position to buy property. After 9/11 the property values have gone up since people have brought a lot of their money back from investents in the west. When you don't want to put your savings in a bank, you put it in land, at leas that's how people prefer it here.
As for a real estate agent that is bi- or even multi-lingual, then they are not that common, at least not here in Madinah
. But the only time you really need a real estate agent here, is when you're looking to buy. Most of the time, when renting, you can find a place to rent through word of mouth. That's how most of us find apartments and office space, it's just that kind of community here...
If --and when-- you come here, you will definitely need a guide. A lot of brothers WANT to help, but few can. Others have to weigh the benefit to the harms and find that the time is worth a lot more than the money. I'm sure we can find you a guide here in Madinah
, but I can't really garauntee one in any other cities. Madinah
is a place where people are a lot simpler and generally are willing to go out of their way to help an outsider, it's always better when they will benefit monitarily as a reward for their co-operation. At any rate, finding a guide is small potatoes, we'll worry about that when you get here insha Allah.
As for your last question, we touched on it earlier but I'll go in on a little more detail for you here. The paperwork that is needed in general is a copy of your passport, along with a bank statement that is certified (or stamped) by the bank, but that will later need to be certified by the Saudi Embassy
in your home country. You can do the WHOLE process from your home country, but you will have to come here for the final leg of the procedures. When you come you will have to have rented an office space that meets the requirements by the local Chamber of Commerce, as well as starting the paperwork for your Iqaamah
(Residency Permit). Once you have done that, and a few other errands, you will be given an Iqaamah and will be given sufficient visas for your immediate family (wife, children). Once you've done that, you come back here and start your life as a Foreign Investor (sounds pretty cool huh?) here in the Kingdom of Saudi Arabia
. By the way, once your visa has been issued for you to come here for that final leg of procedures, you have up to a year to come here, so it's not much of a hurry...
Take your time, ask Allah for help and guidance, and then take the plunge once you've re-assessed your situation after reading this brief explanation. Also, remember that the laws for Foreign Investment have changed many times within the last few years, so it's always best to take advantage of the opportunities presented to you and not to procrastinate. A few years ago, all you had to have was 100,000 SAR in your bank account in your home country and a photocopy of your passport. Now they have started a system based on different fees that you pay to the Investment Authority
just to get the ball rolling. Also be advised, that to do all this paperwork you will have to hire an agent, and the fees of the agent will run you anywhere from 15,000 SAR to 30,000 SAR. Some agents will charge a whole lot more due to the different fees and tariffs they have to pay to get the work done.
I'll try to go into detail as much as I can about all the different aspects that I've talked about, but remember, that with school and the family it's not easy to always update people on stuff that is constantly changing and developing. I hope this answer was to your liking and has at least put a dent into the huge amount of questions that somebody might have when thinking about taking such a big step in one's life. May Allah make us all successful in all our endeavors and make us sincere in doing whatever we do for His sake alone.
Take care, and enjoy...Update:
Foreign Investors are now ALLOWED to buy personal property in Makkah and Madinah