To foster Saudi Arabia’s new business creation rate, the Kingdom has launched an ambitious group of initiatives in 2005 to reduce the impact of the regulatory burden on start-up companies.

One of the results of this ongoing policy is that it now takes nine fewer procedures to start a business than it did in 2005, taking the number to just four procedures — lower than any other rapid-growth market in the G20, says an Ernst & Young statement received here.

Saudi Arabia is also among the most competitive in the number of days it takes to start a business, at an average of just five days in 2010, representing a fall of 59 days since 2005.

Almost three quarters of Saudi entrepreneurs interviewed for the survey said that access to funding is not a constraint and that they have easy access to capital.

This is partly because of special programs that exist to facilitate bank lending to entrepreneurs.

Public aid was viewed as one of the funding instruments that saw particularly strong improvement, with 72 percent of respondents saying it had improved over the last five years.

Jim Turley, chairman & CEO, Ernst & Young, said: “The entrepreneurial flair of Saudis has been given a major boost by these initiatives, which have been warmly welcomed by entrepreneurs in the Kingdom. The government has recognized the important role that entrepreneurship will play in generating the millions of new jobs required to sustain the economy over the coming decade. This provides an excellent model for the rest of the region.”

Turley is a panelist on the "Art of Failure" session at the 6th Annual Global Competitiveness Forum in Riyadh.

Regulation and taxation in Saudi Arabia were viewed positively by the entrepreneurs in terms of starting up a business.

Business regulations were reported to have improved by 80 percent of respondents and the ease of starting a business improved by 76 percent.

The cost of starting a business is also quite low, at 7 percent of income per capita.

Turley added: “In uncertain economic times, governments around the world should be encouraging entrepreneurs to build businesses that create permanent jobs. The Kingdom is creating the right conditions for entrepreneurial activity to flourish while, at the same time, crucially avoiding penalizing failure.”

Abdulaziz Al-Sowailim, chairman & CEO of Ernst & Young Middle East & North Africa, said: “Today we meet entrepreneurs who are at the leading edge of their industries, who are innovating and growing due to the quality of their training and education. Government initiatives that provide Saudi youth with the knowledge and skills necessary to establish their own businesses are examples of the Kingdom’s commitment to fostering entrepreneurship.”

Education and human resource development is the second largest budgetary item for the Saudi government and spending is likely to be increased substantially given the rising youth population.

The report noted widespread improvement in entrepreneurship-related areas of Saudi education and training with 80 percent of respondents reporting an improvement in entrepreneurship conferences and seminars.

Specific programs at universities or business schools were thought to have improved by 72 percent and the majority of Saudi entrepreneurs are satisfied with the quality of dedicated education.

Al-Sowailim added: “The Saudi culture is also a key driver — 86 percent of Saudi entrepreneurs believe their culture encourages entrepreneurship. A large majority also said that promoting the role of entrepreneurship in creating new jobs could have a high impact on further strengthening that culture over the next three years.”

Ernst & Young’s report, "Entrepreneurs speak out," a survey of 1,000 entrepreneurs, focuses on the entrepreneurship environment of G20 countries through the lens of five fundamental enablers.

These are entrepreneurship culture, education and training, access to funding, regulation and taxation, and coordinated support.