Start-ups in Saudi Arabia, the Arab world’s biggest economy, secured record funding of more than $152 million in 2020 from investors despite a pandemic-driven economic downturn, according to data platform Magnitt.
The funding received was 55 per cent higher compared to the previous year, driven by a record number of investments from venture capital funds and angel investors into the kingdom's start-ups, Magnitt, which tracks start-up investments across the broader region of Middle East and North Africa, Pakistan and Turkey, said on Monday.
Investors concluded 88 funding deals for tech start-ups, a 35 per cent year-on-year rise, bucking the general trend of the broader Mena market, Magnitt said in its annual 2020 Saudi Arabia Venture Capital Report, compiled in co-operation with Saudi Venture Capital Company.
Start-ups in Mena secured record funding of more than $1 billion last year, however the capital was spread across fewer deals sealed mainly during the first half of the year, Magnitt said earlier this month.
The kingdom maintained its third place in the Mena region for both the number of deals and capital invested in the region. Its start-up deal-flow growth rate was the fastest across the region.
“All of these record-highs point towards a thriving and maturing ecosystem in Saudi Arabia,” Philip Bahoshy, chief executive of Magnitt, said.
Last year was a “roller coaster year”, as Covid-19 accelerated technology adoption and highlighted the importance of tech start-ups in emerging venture markets, he added.
“In Saudi Arabia, we’re seeing founders, investors, governments and enablers working together to solve the pain-points of the ‘new normal’, and these numbers are evidence of that.”
The Covid-19 pandemic has pushed the global economy into the deepest recession since the 1930s, upending trade and global supply chains and disrupting the travel and tourism sector. The pandemic, however, has benefitted sectors including technology, healthcare and e-commerce.
The pandemic-driven slowdown has also accelerated technology adoption, prompting venture capital firms and investors to re-allocate funding to tech start-ups that offer digitisation and automation to businesses.
The effect of the pandemic on fundraising was staggered across the start-up ecosystem, but was more evident in the second half, which saw $41m raised in 30 funding deals - a 63 per cent and 48 per cent year-on-year decline in the value and number of deals, respectively.
The full year amount of $152m was driven by the record first half, in which start-ups raised $111m, higher than the total amount secured in 2019.
E-commerce and FinTech retained the top spots by the number of deals, with the two sectors together representing 30 per cent of all deals in 2020. Investments in e-commerce start-ups accounted for 45 per cent of all venture funding in the country, according to Magnitt data.
The five pillars of Islam
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
Important questions to consider
1. Where on the plane does my pet travel?
There are different types of travel available for pets:
- Manifest cargo
- Excess luggage in the hold
- Excess luggage in the cabin
Each option is safe. The feasibility of each option is based on the size and breed of your pet, the airline they are traveling on and country they are travelling to.
2. What is the difference between my pet traveling as manifest cargo or as excess luggage?
If traveling as manifest cargo, your pet is traveling in the front hold of the plane and can travel with or without you being on the same plane. The cost of your pets travel is based on volumetric weight, in other words, the size of their travel crate.
If traveling as excess luggage, your pet will be in the rear hold of the plane and must be traveling under the ticket of a human passenger. The cost of your pets travel is based on the actual (combined) weight of your pet in their crate.
3. What happens when my pet arrives in the country they are traveling to?
As soon as the flight arrives, your pet will be taken from the plane straight to the airport terminal.
If your pet is traveling as excess luggage, they will taken to the oversized luggage area in the arrival hall. Once you clear passport control, you will be able to collect them at the same time as your normal luggage. As you exit the airport via the ‘something to declare’ customs channel you will be asked to present your pets travel paperwork to the customs official and / or the vet on duty.
If your pet is traveling as manifest cargo, they will be taken to the Animal Reception Centre. There, their documentation will be reviewed by the staff of the ARC to ensure all is in order. At the same time, relevant customs formalities will be completed by staff based at the arriving airport.
4. How long does the travel paperwork and other travel preparations take?
This depends entirely on the location that your pet is traveling to. Your pet relocation compnay will provide you with an accurate timeline of how long the relevant preparations will take and at what point in the process the various steps must be taken.
In some cases they can get your pet ‘travel ready’ in a few days. In others it can be up to six months or more.
5. What vaccinations does my pet need to travel?
Regardless of where your pet is traveling, they will need certain vaccinations. The exact vaccinations they need are entirely dependent on the location they are traveling to. The one vaccination that is mandatory for every country your pet may travel to is a rabies vaccination.
Other vaccinations may also be necessary. These will be advised to you as relevant. In every situation, it is essential to keep your vaccinations current and to not miss a due date, even by one day. To do so could severely hinder your pets travel plans.
Source: Pawsome Pets UAE
