Riyadh city authorities have started clearing the capital's neighborhoods of illegal markets operating on residential plots following a government order that was passed in December.
In a move that could affect the economy and tens of thousands of people, scores of small businesses ranging from tailors to car mechanics and grocery stores to pop-up clothing stalls were being driven out of residential areas to improve security, traffic flow and the environment.
The directive passed by the High Commission for Development of Riyadh, a government body, also ordered the migrant laborers to vacate the cramped and run-down quarters they used to live in.
Riyadh has a population of about 8 million in December, including 3.4 million foreigners, according to official statistics. That is about a quarter of Saudi Arabia's total population.
"Now that the three months grace period has ended... owners of such establishments which are illegal must leave immediately to avoid their units being evacuated compulsorily and having power and water services cut off," Riyadh Municipality said in a statement on Tuesday.
Many businesses, particularly smaller private firms staffed by the millions of foreigners who flocked to Saudi Arabia during the oil boom of the previous decade, also rent residential buildings for their offices in Riyadh to cut costs.
Some firms are likely to shut down because they are unable to afford legal premises, especially because their finances have been pressured by an economic slump caused by low oil prices in the past couple of years.