Navigating Corporate Banking in Saudi Arabia: Insights and Strategies for Success

This article has been researched and written by Rawan ElKhalil & Michelle Camacho and the team at Creation Business Consultants. AI has not been used in generating this article.

Dealing with the process of establishing a corporate bank account in Saudi Arabia could be difficult and time-consuming. The requirements and application processes differ by bank, which adds complexity to the process. While this may not be an issue for small businesses, for medium and large businesses, this could extend the search for a proper business bank account, which could ultimately delay or hinder your business in terms of revenue generation and increased competition. However, selecting the right corporate account, provider and services to provide will facilitate the process and create efficiencies in the operations. This article is designed to introduce and provide some key insights and assistance on how to open a corporate bank account in Saudi Arabia.

VISION 2030: A CATALYST FOR CHANGE

Saudi Arabia, as it strives to deliver its extraordinary Vision 2030 plan, has begun a significant process of economic diversification, and to develop and attract foreign direct investment (FDI), in which the banking scheme has been enhanced. This not only changed the traditional banking industry but also opened the doors to creative finance solutions, which place the kingdom as an emerging global economic hub. The below blog explains the regulation reforms, changes in the banking sector, evolving digital innovation, and the growing demand for bank GUI base in Saudi Arabia.

The Saudi Arabian Monetary Authority (SAMA) has been functioning as the Central Bank in KSA since 1952, with jurisdiction over the financial and insurance systems. SAMA also relates to the banking system, ensuring conformity between local and international regulations and standards.

Thirty banks are registered for business in Saudi Arabia, of which about two-thirds of sector assets are domiciled in local banks, including the leading bank, The National Commercial Bank, as well as Al Rajhi Bank, Samba Bank and Riyadh Bank.

INTERNATIONAL PRESENCE AND PARTNERSHIPS

Simplified licensing arrangements and a range of international banking stakeholders have contributed to a budding diverse financial market. The better-known international banks include Deutsche Bank, BNP Paribas, JPMorgan Chase, Standard Chartered, Emirates NBD, First Abu Dhabi Bank, Qatar National Bank, Bank of Jordan, Bank Misr of Egypt, National Bank of Egypt, Sohar International Bank of Oman, Bank of China, and the Trade Bank of Iraq.

ISLAMIC BANKING IN SAUDI ARABIA

Saudi Arabia boasts the world’s largest Islamic banking market, with 78% of the overall market, and 30 per cent of the total Islamic banking activity in the GCC takes place in the Kingdom. Dedicated Islamic banks include Al-Rajhi Bank, Al Jazeera Bank, Al-Bilad Bank, and Alinma Bank. This leadership type is indicative of the Kingdom’s intention to include all investors and consumers financially.

BANKS AND FINANCIAL INSTITUTIONS IN SAUDI ARABIA

Saudi Banks and financial institutions offer users a detailed range of services, including:

• Current accounts.
• Savings accounts.
• Loans and overdrafts.
• Mortgages.
• Investments.
• Digital and Online Banking.
• Mobile Banking.

The many banking branches in the Kingdom make it easy for foreign investors to enter Saudi Arabia. Banks have branch networks across the Kingdom consisting of more than 2,000 banking branches that generally operate Sunday to Thursday from 9:30 am to 4:30 pm. Some banks offer basic banking on Saturdays, with airport branches catering to investors with 24/7 banking hours.

DIGITAL TRANSFORMATION IN CORPORATE BANKING

• Foreign investors can open and manage bank accounts remotely.
• Digital banking products provide services, such as online loans, mobile payments or wallets that can be used without visiting a physical banking branch.

SAUDI ARABIA’S DIGITAL BANKING MARKET

• Recognised as having the largest digital banking market in the Middle East and North Africa.
• Over three-quarters of banking customers in Saudi Arabia use banking via online customers or mobile applications.
• 76% use digital banking, with 60% online or mobile applications.

CONVENIENT PAYMENT PROCESSING

• Several digital wallets can facilitate electronic payments, such as the Mada electronic payment system.
• Residents and businesses can facilitate payments electronically.

BANKING SECTOR MERGERS

• Support the country’s economic transformation with emphasis on infrastructure funding, home ownership and SME development.
• The National Commercial Bank and Samba Financial Group merged to create the Saudi National Bank, which will become the 3rd largest lender in the MENA region.
• More than USD 250 billion in assets.
• The Saudi Arabian British Bank and Alawwal Bank merged to create the Saudi Awwal Bank, which will become the 4th largest lender, with USD 84 billion in assets.

CREDIT GROWTH IN BANKING SYSTEM OF SAUDI ARABIA

The banking sector in Saudi Arabia is expected to continue to grow at a robust pace, according to the credit rating business S&P Global, of about 8 to 9 per cent in 2024. This growth will be driven by economic activity resulting from Vision 2030, which will lead to more expansion of credit creation for business customers, when financial institutions also commence lending to them.

As new digital banking solutions continue to develop, banks and fintechs in Saudi Arabia will be grappling with the need for cybersecurity and data protection. They will be continuously investing in activities to develop proper cybersecurity because they are protecting both sensitive information and ensuring the protection of the digital payment system against potential cyber threats.

SAUDI ARABIA’S BANKING SECTOR TRANSFORMATION

Saudi Arabia’s banking sector transformation embodies the strategic intent of its leadership to redesign the country’s economic landscape as a prime location for foreign investments and ease of doing business. Through regulatory reforms, rapidly improving technology, and international engagement, Saudi Arabia is well-positioned for sustainable growth and prosperity in the global banking market.

Before selecting a corporate bank account in Saudi Arabia, you should consider the following questions:

• Are you eligible for the business account you are considering?
• What are the costs associated with setting up and maintaining a corporate account?
• Are there caps on transaction amounts and volumes?
• What types of payments can you receive and make?
• What fees apply when making payments?
• What foreign exchange services are available?

WHAT ATTESTED DOCUMENTS ARE REQUIRED FOR CORPORATE BANK OPENING IN SAUDI ARABIA?

For authentication of any documentation required, there is generally a requirement for certification, legal translation, and counter-attestation where the documentation comes from authorities in the Kingdom of Saudi Arabia. Here is the general process that companies typically follow:

• Obtain the company license.
• Gather necessary documents.
• Choose a suitable bank.
• Complete the bank application process.
• Comply the bank’s due diligence & verification process.
• Receive approval and account details.
• Fund the Account.

TAKEAWAY

Ultimately, the best bank in Saudi Arabia is subjectively dependent on what best aligns with your financial goals and aspirations. By understanding your requirements, considering your banking services, and what you find most appealing, you can make an informed decision to allows you to chase financial success and peace of mind. We can provide banking, business and compliance service solutions fitting different business needs. Our Saudi experts are waiting to conduct a free, no-commitment consultation today and guide you on the most appropriate options.

Email: [email protected] | UAE: +971 4 878 6240 | Saudi Arabia: +966 56 865 2329

Rawan El Khalil,
Business Development Coordinator

Michelle Camacho,
Client Relationship Manager