What Changes in Your Business Model When Your Customer Is in Saudi Arabia?

From pricing and payment terms to customer acquisition and delivery costs: how to review your business model's viability before expanding sales.

A company may successfully present its product to a customer in Saudi Arabia, then discover while preparing the commercial proposal that the deal requires more than it originally allowed for: additional technical integration, training, direct support, and different contracting and collection arrangements.

Expansion then becomes a test of the business model itself. The product may remain suitable, while the costs of selling and delivering it, the resources needed to serve the customer, and the time required to recover spending all change.

Entering the Saudi market therefore requires reviewing the relationship between the value the customer receives, the price it pays, and the cost the company incurs to fulfill its commitments.

This does not mean that all customers in Saudi Arabia need the same arrangements. The adaptations required depend on the target segment, the nature of the solution, contract size, and delivery requirements.

01 | The Value Proposition and Pricing Basis

Reviewing the commercial model begins with understanding the outcome the customer is actually buying. A product may perform many functions, while the customer's priority is to reduce the time needed for a particular process, improve oversight, or lower a specific operating cost.

This priority affects how the offer is presented and priced. Per-user pricing may suit some solutions, while alternatives such as pricing by branch, usage volume, or service scope may be worth testing.

For illustration, a company may offer software through a subscription that includes basic setup. When it targets an enterprise customer, implementation may require integrations, training, and data migration. The company then needs to define what the subscription includes, what is priced separately, and what requires additional scope of work.

This clarity helps the customer understand the offer and helps the company protect its margin and avoid uncosted commitments. Pricing should be tested against value, alternatives, and cost, without assuming that the market will accept a higher price simply because the customer is in a different location.

02 | Customer Acquisition and Service Delivery Costs

The cost of reaching customers may differ from the company's assumptions in its home market. Enterprise sales may require time from the founder and technical team, visits, initial pilots, documentation, and qualification work.

Aramco's cybersecurity requirements provide a specific example of obligations that may form part of supplier readiness. Its compliance certificate program includes third-party classification, implementation of relevant controls, and compliance verification through the appropriate assessment route [1]. Aramco

For commercial planning, these requirements should be understood before an opportunity is priced. The company should determine whether their cost relates to one customer or builds a capability that can also serve others.

The company also needs to separate customer acquisition costs from post-contract service costs. Work may span product development, implementation, account management, and ongoing support. If each customer requires substantial modifications and increasing resources, the model may need more standardized deliverables, or changes to the target segment and pricing.

03 | Payment Terms and Collection Timing

Payment arrangements affect the resources a company needs to keep operating. A deal that requires delivery spending before payment is collected creates a funding need, even when its expected margin appears adequate.

Billing milestones, deliverable acceptance terms, required documents, and the contractual payment period should therefore be defined and linked to the actual spending schedule, including the team, partners, and technology infrastructure.

Tax treatment also forms part of contract design, particularly for cross-border services. The Zakat, Tax and Customs Authority's guidance explains that the treatment of services received from a nonresident supplier varies according to the place of supply and the recipient's status, including cases involving the reverse charge mechanism or a supplier registration obligation [2]. The authority also explains that payments from a source in Saudi Arabia to nonresident entities are subject to withholding tax under the relevant provisions [3]. zatca.gov.sa

Applying these provisions requires specialist review based on the payment's nature, the contracting parties, and applicable agreements. The treatment should then be made clear in the proposal, contract, and cash flow forecasts.

04 | Contracts, Service Levels, and Delivery Capacity

At contracting, the commercial offer becomes a set of commitments requiring clear resources and authority. Areas to review include implementation scope, customer responsibilities, acceptance criteria, change management, and support and response times.

The connection between operations and contracts appears in the Saudi Central Bank's Cyber Security Framework. For organizations within its scope, it addresses incident management requirements, contract termination and renewal, and periodic monitoring of security requirements agreed within service level agreements [4]. rulebook.sama.gov.sa

The commercial implication to assess is the company's ability to deliver what it promises. A commitment to respond within a defined period may require different support coverage, while on-site visits need local arrangements and additional spending.

Each commitment should therefore be reviewed with the team responsible for fulfilling it before approval, with its impact on price, resources, and margin identified.

How Can You Review the Model before Expanding Sales?

The review can be organized around four connected questions:

Area

Key question

Value and pricing

Does the price reflect the service’s value and actual scope?

Cost

What does it cost to acquire the customer, implement the solution, and provide ongoing service?

Liquidity

What resources are needed until payment is collected?

Operations

Can commitments be met and the service delivered repeatedly and efficiently?

The answers help identify which adaptations are worth making and which areas need further testing before spending increases.

In this context, market research, business model adaptation, and financial and operational planning within Tech Horizons Ventures' soft landing services address one decision: how can the company build an offer that the customer can buy and that the company can deliver on a sustainable commercial basis?

Before approving a broader sales plan, review an actual commercial proposal with the sales, product, delivery, and finance teams. Identify what has changed from your original model, the cost of that change, and how it will affect contracting and service delivery.

The review may reveal a need for additional local capabilities, leading to the next article: “The Local Partner in Saudi Arabia: How Do You Define Its Commercial Role before Signing an Agreement?”

The tax and regulatory information is general and introductory and requires specialist review when applied to a specific situation.

Sources and References

[1] Aramco — Third Party Cybersecurity Compliance Certificate Program.

[2] Zakat, Tax and Customs Authority — Guideline on Imports and Exports under VAT, May 2026.

[3] Zakat, Tax and Customs Authority — Clarification on Withholding Tax, April 2026.

[4] Saudi Central Bank — Contract and Vendor Management within the Cyber Security Framework.