These are the laws and conditions for licensing an online store in Saudi Arabia
Before talking about the terms of licensing an online store in Saudi Arabia and the licenses required to be able to legally start an e-commerce business in Saudi Arabia or an electronic shopping platform, whether it is a website only or an electronic application, we will briefly review some statistics about e-commerce in Saudi Arabia, with a number of more than 25 thousand representing The number of online stores legally registered in Saudi Arabia, which constitutes 1.2% of the total electronic stores worldwide.
It accounts for nearly half of the volume of e-commerce in the Middle East, according to the Chairman of the Entrepreneurship Committee of the Jeddah Chamber of Commerce (2019), with a volume exceeding $1.5 billion out of a $7 billion market size. Huge numbers right!?
There are many statistics about electronic commerce, we will mention some of them later, and all of them indicate one thing, which is that the practice of E-commerce in Saudi Arabia It is really successful compared to other Arab countries, because of the government facilities and privileges provided to them for electronic commerce in Saudi Arabia, and accordingly it is considered an idea Establishing an online store in Saudi Arabia For residents and citizens of the best entrepreneurship ideas.
We advise you to do so, of course, and the decision is yours, but if you really intend to do so and do not yet know what the conditions are, then you are in the definitely appropriate article. Saudi Arabia, or you are an investor and want to create and operate an online store in the Kingdom from abroad
Information and statistics about e-commerce in Saudi Arabia
- The number of Facebook users in Saudi Arabia is estimated to be more than 14 million, including residents. And 8 million on Instagram. And 9 million on Twitter.
- More than half of Internet users in Saudi Arabia shop online and buy less and more important needs from electronic stores.
- E-commerce in Saudi Arabia leads with Egypt and the UAE in this field in the Arab world and has strict controls by the Ministry of Commerce.
The e-commerce book in the Saudi system
Protection of the consumer from fraud and fraud and the right of the e-merchant to carry out his activity. In order to create a balance between electronic and traditional commerce, the Ministry of Commerce and Investment has decided to approve The Law of Regulating E-Commerce in Saudi Arabia The first of its kind (26 articles) by order of King Salman (M/126) in 2019.
- The e-commerce book in the Saudi system defines e-commerce as an economic activity with the intention of selling goods or providing services by electronic means.
- The law applies to both the consumer and the merchant in order to license an online store inside Saudi Arabia, or outside it if he sells his products inside Saudi Arabia.
- The place of residence of the e-merchant is the address of his workplace if he does not have a headquarters on the ground, such as stores or stores.
- The provisions of the ordinary commercial register apply to the electronic commercial register.
- The law is not about licensing the Saudi website in general, but rather about the terms of the online store in Saudi Arabia specifically, even if it is on Instagram or other electronic methods.
Terms of licensing an online store in Saudi Arabia
The conditions for opening an online store are the easiest in the Arab region, and the conditions for licensing an online store in Saudi Arabia are not very different from the traditional store. Here are the details of establishing an online store in Saudi Arabia, according to the Ministry of Commerce and Investment in Saudi Arabia:
- Availability of a commercial register, an online store, that is extracted from the Ministry of Commerce and Investment electronically in 180 seconds.
- To have a bank account in one of the banks in Saudi Arabia in the name of the company or institution.
- To have an account with a shipping company to ensure delivery and preserve customer rights.
How to open an online store in Saudi Arabia with steps
Extracting an e-commerce commercial registry that falls within the following fields, in order: Communications and information technology / information technology / e-commerce / commerce via the Internet. Enter For the official website of the Ministry of Commerce and Investment Saudi Arabia and submit your application by following the following steps in order:
- Open an account at Commercial Registration Service.
- Then sign in with your ID number and password.
- Go to the Commercial Records field and click on “Issue”.
- You will be taken to a form asking you for information about your business, to fill out and complete the rest of the steps.
- You will pay the commercial registration fees and your membership in the Saudi Chamber of Commerce electronically through the SADAD system.
- After registration, a commercial registration for an online store and your membership number in the Chamber of Commerce will be issued electronically. Thus, you have legally opened a commercial register for an online store
Now you can start to Establishing an online store in Saudi Arabia with the following technical steps:
- Choose the domain and name of the online store
- Choosing the right hosting company for your online store
- Logo design and colors for the online store
- Choosing the right online store software
- Securing the source or storage of products
- Professional online store template design
- Do a quality check after completing the design
- Marketing for the online store
Also read the details in this article: How to design and create a professional online store from scratch – a comprehensive guide
What is known?
Well, you have completed all the legal procedures and met the terms of licensing the Saudi online store online, one thing remains and that is Register for a well-known service.
Don’t know what is known? It’s okay, keep going:
a favour: The most important free e-service launched in cooperation between the Saudi government, represented by the Ministry of Commerce and Investment, and the private sector, represented by “Thiqa Business Services” company. Client.
The idea of the service is to create a database through which the degree of reliability and professionalism of online stores is known through the opinions of customers who have previously dealt with them and to ensure that the store belongs to a truly local Saudi company, and through the evaluation obtained by a well-known site management system that gives the store The electronic mail has certain privileges and it is recommended to customers if it fulfills certain conditions, and these conditions are as follows:
- The person concerned is required to register and document: his online store, and the pages belonging to his store on social networking sites.
- After the registration request is accepted, shoppers can access his store through Marouf, and rate his store.
- In the event that the owner of the online store has a commercial register and affiliation number to the Chamber of Commerce, he is granted the golden certificate, as a kind of gratitude and distinction to encourage others to abide by the law. As for individual sellers, they do not have the golden certificate until they obtain a commercial register and membership of the Saudi Chamber of Commerce.
Obligations of the Saudi online store owner to fulfill obligatory
- Provide his name, address, means of contact, and his electronic commercial registration number in the footer of the site or on the About Us page.
- Ensuring the confidentiality and protection of the information he collects about his customer, the information necessary to complete the sale process is sufficient after the customer agrees to the terms and conditions during registration in the store.
- Providing information to the customer on the About Us page or the Terms and Conditions page, including contract details as information on the merchant’s mechanism of action
- Provide on the product page an accurate description of the good or service, its price, delivery and payment procedures, and the warranty, if any.
- The terms and conditions pages are clearly included because they are one of the most important requirements and conditions for the work of an online store in Saudi Arabia when registering a customer on the site or confirming the order.
- The merchant is not entitled to delay the delivery of goods to his customers by more than 15 days, otherwise the customer has the right to recover his full amount.
- The customer has the right to return the goods if he finds that it does not meet the specifications, replace it or get his money back within 15 days. However, he is not entitled to terminate the contract according to Article 7 in the cases:
- The conformity of the product when delivered to the customer to its description in the online store.
- The e-merchant shall not bear the costs of the appearance of defects in the merchandise due to the poor possession of the customer.
- If the service or commodity is exploitable without proof such as (information programs, discs, books, newspapers).
Violation penalties The e-commerce book in the Saudi system
Does practicing e-commerce without obtaining a license for internet stores in Saudi Arabia expose you to a violation? Simply yes, according to Article 18 and 19 of the e-commerce book in the Saudi system, the penalty for violators of the terms of licensing an online store reaches:
- Get an initial warning.
- A fine of one million Saudi riyals.
- Temporarily blocking the website / online store. Or withhold it permanently if the competent committee so decides.
- A grievance may be submitted to the Administrative Court according to Article 20 of Saudi Law.
The most important difficulties facing electronic stores in Saudi Arabia
- Unlike electronic stores in Jordan, for example, most electronic stores are in English and not Arabic, except for the well-known ones such as Noon and Amazon.
- The cost of designing and creating an online store in Saudi Arabia is high compared to other Arab countries because of the cost of programming and marketing from local companies, especially if you are looking for a professional design. Therefore, I prefer to make many contacts with developers and designers on the Internet through freelance platforms.
- Technical difficulties due to the lack of Saudi competencies in the field of programming, marketing, store design, and reliance on foreign and Arab competencies. But it is preferable to find a distinguished Saudi group that helps you to program and design an integrated store and works from Riyadh or Jeddah in a better way than any communication you can make with remote developers.
- You have to search and inquire about them carefully and most importantly see their previous work as we do at Go Start Business. You can find out the cost of making a professional online store in Saudi Arabia by contacting us by pressing the red button at the end of the article and we will provide you with a price for an integrated online store
After this detailed explanation about the conditions for licensing an online store in Saudi Arabia in general, I would like to alert you to an important matter, which is to review carefully the details of the e-commerce book in the Saudi system so as not to get into a legal problem. Of course, you will try to get electronic payment gates that allow your customers to pay with bank cards.
Update: How to link the online store to the electronic invoice system in Saudi Arabia
The first phase, which begins on December 4th What is required is only not to deal with paper invoices or Excel and Word invoices. Only there should be an electronic version of the invoice from the site’s system or the accounting system linked to the site. PDF invoice. We will provide you with the details before the start of the second phase on the best solutions to automatically link billing with Saudi Zakat and Income Authority.
God grants success.
You may be considering establishing a US tax-exempt company to operate your online store anywhere in the world