Entrepreneurship Barometer - DO NOT PROMOTE | Entrepreneurship Barometer - DO NOT PROMOTE -
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Entrepreneurship Barometer – DO NOT PROMOTE

Saudi Arabia: Sunday, September 29 - 2013 @ 00:00

The study was based on a survey that canvassed more than 1,500 leading entrepreneurs and other qualitative data across G20 countries.

It also relied extensively on EY’s own research of more than 200 governments’ leading practises.
Saudi Arabia ranks first in tax and regulation, ahead of Canada, the UK, Japan, Germany and the EU.

“Saudi Arabia is one of the best performing, rapid-growth economies in the barometer, thanks to its laudable efforts to reform its overall business environment in the recent years,” says Ashraf Abu-Sharkh, strategic growth markets’ leader at EY MENA.

“Its ranking in tax and regulation is a testament to the streamlined tax regime in the country. As the government is gradually diversifying away from oil, a strengthened culture of entrepreneurship is developing.”

The tax system in Saudi Arabia imposes a particularly light administrative burden on entrepreneurs. There are only three payments to be made each year, whereas double figures are common in other G20 countries. Similarly, the average time spent by businesses on tax affairs amounts to just 77 hours, which is the lowest (average taken from 2010 to 2012). In addition, the cost of setting up a business is approximately one third less than the G20 average. In terms of employment regulations, labour tax in the kingdom is the lowest.

“This year, the barometer calls on G20 governments to collaborate with entrepreneurs in order to kick-start their economies and create jobs,” adds Abu-Sharkh.

Room for improvement

Among G20 countries, Saudi Arabia ranks 20th, which means fostering an entrepreneurship culture is a primary challenge. In the survey, Saudi entrepreneurs pointed out the attitudes towards risk and fear of failure, which are reflected in local rules, such as the high financial costs of business failure. Insolvency costs in Saudi Arabia are one of the highest among G20 countries.

“From our discussions with business owners in Saudi Arabia, we found that risk aversion is a tough challenge to overcome from both entrepreneurs and investors. As the country invests more in entrepreneurial initiatives, more role models will need to emerge to encourage and inspire future entrepreneurs,” says Abu-Sharkh.

One of the potential improvements is the country’s co-ordinated support ranking in the barometer. This reflects local entrepreneurs’ views about trends on three constituent elements — networks, mentoring and incubators. Saudi Arabia scores below the rapid-growth countries’ average, thus highlighting the need for a stronger emphasis on and backing for this area.

Nevertheless, 43 per cent of entrepreneurs said that access to business incubators has improved in the past three years and Saudi Arabia comes 12th, ahead of the EU, the UK, Japan and the US.

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Sunday, September 29- 2013 @ 0:00 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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