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Understanding Difference between Branch and Subsidiary Introduction Branch Subsidiary Establishing Branch vs Subsidiary Key Differences between Branch and Subsidiary Advantages and Disadvantages of Branch vs Subsidiary Al Taasis is Your Forever Business Partner Introduction You aspire to expand your business and look into potential growth opportunities, but you need to figure out which corporate structure is more suitable. It is important to know your options and understand the differences. What will be your primary business activity? How will you manage taxation and liability? The requirements for establishing a branch and subsidiary vary from country to country. Contact us to learn more about the specific requirements in Saudi Arabia. This article will guide you on how branches and subsidiaries work and their pros and cons. Branch A branch is an extension of a company; however, branches are physically present in multiple locations. Branches are set up to access diverse markets for business and provide services to large number of customers. It has no distinct legal identity. A branch office is an integral part of its parent company. The company is liable for any actions of the branch. Every company branch has different sales targets, and they compete with other branches. The branches carry out the same business activities as its head office. The branch manager reports to the head office. Usually, branches share the same marketing materials, but they must adapt to the marketing techniques that suit the target audience of the foreign country where it is located. Please read our blog Why should you open a branch office in Saudi Arabia? Subsidiary A subsidiary is legally independent, but its shares are owned or held by another larger company called a holding company. The holding company and its subsidiaries are known as a corporate group. Though a subsidiary is controlled by its parent company, it has a separate legal identity from the parent company. Even the parent company is not liable for the subsidiary activities. It can enter into contracts in its name. It is liable to separate taxes from its parent company. Establishing Branch versus Subsidiary The branches are set up to increase customer reach and approach diverse markets, whereas a subsidiary is formed for a broader expansion strategy. Every country has different laws and regulations for setting up branches and subsidiaries. We are well-informed about Saudi local laws. Al Taasis is your trusted business setup partner for expansion to Saudi Arabia. Ten Key Differences between Branch and Subsidiary Key Differences Branch Subsidiary Reporting Entity Head office Holding company Resources and Systems Rely on head office May or may not rely on holding company Business Activities Restricted to conducting the same activities as the parent company May or may not conduct the same activities as the holding company Branding Share the same logos & slogans Own unique branding Legal Status Same legal standing as the parent company Separate legal standing from its holding company Liability Extends to its parent company The holding company owns no liability for the subsidiary. Account Maintenance May or may not maintain joint accounts with the head office Separate accounts from the holding company Ownership Fully owned by the parent company 50%-100% owned by the holding company Financial Loss In case of loss, the parent company can close the branch. If a subsidiary does not turn out to be profitable, it can be sold. Key Differences between Branch and Subsidiary Branches and subsidiaries may have some common characteristics, but their structures are different from each other. The differences include the following: Business Activities A branch carries out the same business activities as its parent company, whereas a subsidiary can conduct a separate business activity from its holding company. Branding Branches follow the branding of their parent company. They will share the same logos, fonts, messaging, and slogans. Subsidiaries have branding that may or may not be the same as the holding company. Legal status The legal status of a branch is the same as its company, while the subsidiary has separate legal standing from its holding company. Liability A branch’s liability extends to its parent company, whereas for a subsidiary, it does not extend to the holding company. The parent company is solely responsible for the actions of its branch, while it has no legal liability for the subsidiary. Account Maintenance Branch accounts may or may not be managed by the parent company. Subsidiary financials are separate from its holding company. Ownership A branch is wholly owned by its parent company, while the holding company partially owns a subsidiary, and the shares range from 50-100%. Financial Loss In case of financial loss, the parent company is responsible for the debts of the branch office. A subsidiary is responsible itself for its loss and debts. Advantages and Disadvantages of Branch versus Subsidiary While considering the right option for expanding to Saudi Arabia, you must be aware of the advantages and disadvantages of setting up each. You can establish your business compliantly with the proper knowledge and a trusted partner, Al Taasis. Pros & Cons Branch Office Subsidiary Incorporation Simple & straightforward Complex procedures as compared to a branch Cost Cheaper than a subsidiary Expensive than a branch Managerial Control The head office has full control of its branch managers and staff. The holding company does not have full control over a subsidiary and its staff. Liquidation Simple closure with the transfer of staff and assets, but the parent company is liable for the branch’s debts. Liquidated and de-registered with complex procedures as compared to a branch Legal Liability The parent company can be sued for the actions of its branch. The holding company is not legally liable for the actions of subsidiary. Taxation Liable to corporate income tax as per foreign country where it is located. Taxed only on the profit, which is attributed to the branch raising uncertainty in tax calculation. Liable to corporate income tax as per foreign country where it is located. Taxation is clear and straightforward for a subsidiary. Visa and Immigration

Start Your Food Business in Saudi Arabia with Al Taasis Overview Is Food a Profitable Business in Saudi Arabia? Writing a Business Plan for Your Restaurant Legal Requirements for Setting up Food Business Staff Recruitment for Restaurant Al Taasis is Your Forever Business Partner Launching a successful food business from scratch in Saudi Arabia requires careful planning, hard work and prior knowledge of the Saudi business landscape. Setting up with the right business partner can make it one of the most rewarding businesses in the Kingdom. Overview Starting a food business depends on a good business plan, understanding the market, selecting the right location, hiring experienced staff, obtaining permits and licenses, managing inventory and supplies, creating an atmosphere that appeals to customers, marketing your business and more. It can be a tremendous task despite having previous experience! Even if you have planned everything well, there are still lots of legal processes and local laws in Saudi Arabia, and you will need to make decisions wisely. Al Taasis keeps you stress-free by taking responsibility for your business setup. With proper planning and execution, you can start a successful food business in Saudi Arabia This blog will explain what to know and expect at each step of setting up your business in Saudi Arabia. Is food a Profitable Business in Saudi Arabia? The food business is one of the top businesses in Saudi Arabia as it is the largest consumer market in the Middle East. Saudi Arabia and the United Arab Emirates represent 90% of the drink and food sector in the Gulf Cooperation Council district. The Saudi Arabia food service market is projected to grow from $14.16 billion in 2022 to $30.47 billion by 2029, at a CAGR of 11.57% in the forecast period. Due to outgrowing tourism and social media influence, Saudi Arabia has transformed its socio-cultural practices. A rising culture of dining out at cafes, restaurants, fast-food chains or other food services has expanded the food industry business in Saudi Arabia. Adoption of western food trends The increasing number of food malls and food courts Expansion of international brands and food chains Writing a Business Plan for Your Restaurant Starting a restaurant in Saudi Arabia means entering a highly competitive space. So how will you stand out and build a business that will grow? The most popular restaurants in Saudi Arabia are Middle Eastern, Indian, Italian, Lebanese and Asian. In case one of these is not your speciality, no worries! Food trends are rising, and the Saudi food market welcomes international cuisine. Your restaurant business can grow fast by designing a stunning venue, creating menus and offering delicious dishes. To do it rightly and ensure compliance with Saudi laws and regulations, you need a trusted business partner, Al Taasis. Write a great business plan and strategy by asking yourself the following questions: Niche: Will you open a fast-food shop, start a food truck, or open a café or restaurant? Cuisine: Which food will be the right choice to serve in Saudi Arabia? What food need will you fill? Target Market: Who will be your potential customers? What style of food and service does interest them? Competitors: Which restaurants are already serving the market? How can you be different from them? Location: Which location will help you get more customers? Resources: What will be the expenses and cost for the complete setup? Styling: Will it be a quick service, casual or fine dining experience? How will your choice of venue, décor and setting create the atmosphere you want? Staffing: How will you hire the head chef and other staff that would fit your requirement The Service Style: Will customers order and get the food, or will you provide waiter service? Marketing Strategy: How will you promote your business? Which social platforms can you use? The Legal Requirements to Open a Restaurant in Saudi Arabia After writing your business plan, the next step is understanding the legal requirements to launch your business in Saudi Arabia. No matter how much you read or what research you do, you might feel overwhelmed with the bulk of information. For successful incorporation and practical business solutions, you can only rely on Al Taasis! Here is a quick review of the steps involved in your incorporation process. Selecting the legal structure of your business Restaurant Name Registration Obtaining an Investment License from the Ministry of Investment Saudi Arabia (MISA) Registration with the Ministry of Commerce Saudi Arabia (MCI) Getting approvals, licenses and permits from the concerned government entities Assistance to open a corporate bank account You must comply with health and safety standards in Saudi Arabia. Learn about the licenses and permits you require and hygiene and food safety regulations. Book a free consultation now, so we can guide you through the processes and the required documents. Staff Recruitment for Your Restaurant You are required to hire a certain number of local employees in Saudi Arabia. Please read our blog to understand Saudization and the Nitaqat system in Saudi Arabia. Saudization: Stay Green on Nitaqat System with Al Taasis The skilled and experienced staff can make your business successful. We can help you hire talented employees and manage their documentation, visas, work permits, medical insurance, payroll, etc. Focus on your core food business and outsource your employee management to Al Taasis. Tips to Successfully Run Your Restaurant Business After setting up your food business, you need to work hard to win customers. Here are some marketing tips from Al Taasis: Arrange a launch party and invite restaurant critics and media persons Build partnerships with other local businesses Promotional offers for your customer Connect with social media influencers Send a monthly email newsletter highlighting specials from the menu and offers Al Taasis is Your Forever Business Partner From choosing the location of your restaurant to designing your menu, there is plenty to think about to make your new venture prosper. Focus on developing your strategy, and leave the rest to us! We will help you build

Saudization: Stay Green on Nitaqat System with Al Taasis Saudization Nitaqat program HRSD Services for Each Nitaqat Range The Nitaqat Red Range Factors Determining Nitaqat Status Benefits of Saudization for Foreign-Owned Companies Al Taasis is Your Forever Business Partner Al Taasis understands Saudi local laws and regulations for setting up and running businesses compliantly in the Kingdom. This blog will take you through Saudization and Nitaqat system in Saudi Arabia. Saudization or Saudi Nationalization Scheme The Kingdom initiated Saudization or workforce nationalization in 2011, and the Ministry of Human Resources and Social Development of Saudi Arabia implemented the policy of Saudisation to encourage the employment of skilled and qualified Saudi nationals. In alignment with the Saudi national employment scheme, private-sector companies in the Kingdom are required to hire a certain number of Saudi nationals. The Saudisation percentage varies from sector to sector. Start your company with Al Taasis to get thorough guidance about the sector-specific requirements for hiring Saudi nationals. Nitaqat Program Nitaqat is an Arabic word that means ranges. The Nitaqat rating system was introduced to ensure the private sector’s compliance with the nationalization program. The purpose of the Nitaqat rating system is to maintain Saudization and decrease the unemployment rate of nationals in the Kingdom. Under the Nitaqat rating system, private companies are ranked in colour-coded categories according to the number of Saudi employees: Platinum, High Green, Medium Green, Low Green and Red. HRSD Services for Each Nitaqat Range HRSD: Ministry of Human Resources and Social Development HRSD Services Platinum Range High Green Range Medium Green Range Low Green Range Receiving applications for visa balance for available occupations ✔ ✔ ✔ ✖ Transfer of occupations of expatriate employees to other available occupations ✔ ✔ ✔ ✔ Renewal of the work permits of expatriate employees ✔ ✔ ✔ ✔ Transfer of services of expatriate employees from any range ✔ ✔ ✔ ✔ Compensatory visa for employees with left permanently status ✔ ✔ ✔ ✔ Instant calculation in the Nitaqat program ✔ ✔ ✔ ✔ What does the Nitaqat Red Range Indicate? The entity falling in the red range is ineligible for changing occupations of its foreign employees, and their services are non-transferable. The entity cannot apply for new visas or get work permits for new foreign employees. The entity is prohibited from renewing of work permits of its existing foreign employees. The entity is restricted from opening its new branch or a new firm. The lower-ranking entities are penalized, and their restrictions are only lifted if they improve their Saudization level. But, with Al Taasis, you need not worry! We can help you improve and maintain your Saudization level with skilled Saudi national employees. Outsource your employee management to Al Taasis. Factors Determining Nitaqat Status The number of required Saudi employees in an entity depends upon the industry and business activity. Companies with over six employees are required to hire a specific percentage of Saudi locals. If the number of employees is less than 6, companies have an exemption from the rating system, but they must hire one Saudi local. The Nitaqat status of an entity depends on the following factors: Entity Classification An entity is classified on the basis of its registered business activities. Entity Size An entity size is decided by the total number of employees working there. Saudisation Percentage The number of Saudi national employees in an entity indicates the percentage of Saudization. Entity Size Classification Number of Employees Entity Size 0-5 employees A small entity under category (A) 6-49 employees A small entity under category (B) 50-99 employees A medium entity under category (A) 100-199 employees A medium entity under category (B) 200-499 employees A medium entity under category (C) 500-2999 employees Large entity More than 3000 employees Mega entity Benefits of Saudization for Foreign-owned Companies By hiring the right Saudi employees and investing in their training to improve their skills, your company will get a better workforce, and their engagement with your business will increase. As per your company’s Nitaqat status, your company will be eligible to access various services provided by the Ministry of Labour. Contact us to learn more. The Nitaqat status of a company is beneficial for business growth and networking. With the badge of trust, your employees feel secure, and your clients and stakeholders trust you more. The employees’ visas, work permits, renewals and all immigration-related processes will be fast and hassle-free. Al Taasis is Your Forever Business Partner Before incorporating your company in Saudi Arabia, you must be aware of the Saudization level required for your company and follow a strategy to avoid compliance issues in the Kingdom. You must review the Saudization plan for your company annually and revise the strategy to maintain the Nitaqat green status. Al Taasis can help you understand Saudization requirements for your specific business activity and assist you with hiring talented Saudi nationals. With us, your company status will stay in the green zone, and you can focus on your business growth. Contact us to know more about the prerequisites of your business journey. Subscribe to Our Newsletter! Enter your email to receive our monthly newsletter. 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Top Five Businesses to Start in Saudi Arabia in 2023 Al Taasis brings market insights to help you identify the sectors driving growth and make well-informed decisions. Here are our top picks for business opportunities in Saudi Arabia in 2023. Saudi Arabia is generating business opportunities for foreign companies and rapidly transforming into an investment hub. The Kingdom’s Vision 2030 is a roadmap to build a sustainable and thriving future, diversifying the economy and boosting the private sector. The Kingdom has introduced and implemented various strategies to accelerate its goal for a diversified economy. The Kingdom’s Public Investment Fund fully supports businesses and backs foreign investments. The Saudi entrepreneurial landscape and compelling venture capital opportunities have made it a destination of choice for businesses. The Saudi government has implemented proactive policies to support the private sector. Read the full blog to understand what makes these businesses the top options in 2023 and how Al Taasis can support you. Food and Beverage Business in Saudi Arabia The Food Sector of Saudi Arabia is the largest and most attractive market in the Middle East. The Food and Beverage Sector has become a significant attraction for investors in the Kingdom as modern cafes, trendy food trucks, luxury restaurants and fast food chains are opening across the Kingdom. The Kingdom is hopeful for 4.78% annual growth as Food Sector is a rapidly growing market. (CAGR 2022-2027). Nestle, the world’s largest food & beverage company, has entered the Saudi market with an investment plan of seven billion SAR. One of its aims is to establish a business incubator for small and medium-sized companies (SMEs) and start-ups. Till December 2022, the volume of investment in the Saudi food industry is more than SR94 billion. The investment rate is continually increasing in Food Sector to achieve food security and meet the needs of the 36 million population. Bread, pies and cake factories are the top food-producing factories in the Kingdom. The investments in the thriving food industry will shoot up as Saudi Food Expo is upcoming in 2023. Gaming and Esports Business in Saudi Arabia The Saudi gaming market is the dominating market in the region and the 19th most significant market in the world. Saudi Gaming Industry is estimated to grow more than threefold by 2030. E-sports will lead the growth as about 29% of Saudi Arabia’s population, estimated at 36 million, is interested in e-sports. Saudi Public Investment Fund has invested over $3 billion in 2022 to develop the Gaming sector. The Saudi Gaming Market hit $1 billion in 2021 and is expected to reach $6.8 billion by 2030. The largest segment is Mobile Games, with a market volume of US$957.50m in 2022. The Kingdom launched National Gaming and Esports Strategy, outlining a comprehensive investment programme for the industry, with the ultimate goal of making the Kingdom a global gaming centre by 2030. Saudi Arabia will be hosting the 2023 Global Esports Games. Travel and Tourism Business in Saudi Arabia The Kingdom aims to attract 100 million visitors and ensure the tourism sector contributes 10% of the GDP by 2030. The Saudi government is working to transform the Kingdom into a leading travel destination. The government has taken a commendable initiative by introducing an E-Visa for citizens from 49 eligible countries. The Kingdom is developing several tourism projects, including Neom, Red Sea, and Qiddiya. With a new tourism law in 2022, the Kingdom has accelerated tourism sector development and attracted global investments. The tourism law aims to enhance the economic contribution of the tourism sector from 3% of the gross domestic product to 10% by 2030. The Kingdom is looking forward to hosting major sports events in upcoming years and expecting a boost in sports tourism. Contact us to know more about the prerequisites of your business journey. Healthcare Business in Saudi Arabia The Kingdom launched Health Sector Transformation Programme in 2022. This programme aims at providing inclusive healthcare services to 88% of the population by 2025. Private sector participation will increase from 40% to 65% by 2030. The Saudi pharmaceutical market is the largest in the Middle East, estimated to touch $11 billion in 2026. The Saudi population is expected to grow by approximately 36 million to 40 million by 2030. The Kingdom reflects its focus on Healthcare Sector by holding Eastern Health Cluster Conference in March 2023 and Global Health Exhibition in October 2023. Foreign Investors have ample opportunities in Saudi healthcare. Sports Business in Saudi Arabia The sports industry in Saudi Arabia is growing at a rapid pace as the government is making mass investments. Sports Cities and local sports clubs are located across all cities and towns of the Kingdom. Saudi sports events industry will have an estimated market value of US$3.3 billion by 2024. Saudi citizens take a keen interest in sporting events; that’s why the Kingdom encourages popular spectator sports. The Kingdom has hosted various sporting events. Saudi Arabia eyes hosting the Asian Football Confederation (AFC) Women’s Asian Cup in 2026, FIFA World Cup in 2030 and Asian Winter Games in 2029. Saudi Arabia will have a direct economic impact by hosting sporting events: spectator revenues like ticketing, food and beverages, accommodation, athlete spending and sponsorships. The private sector can benefit from the organisation of sports events, providing sports infrastructure and running sports marketing agencies or managing events. Al Taasis Stays ahead of the Curve for Supporting Businesses in Saudi Arabia We have the market knowledge and expertise to set up businesses across all Saudi sectors. Our dedicated local team goes the extra mile to build your business smoothly and compliantly. Contact us to know more about the prerequisites of your business journey. Subscribe to Our Newsletter! Enter your email to receive our monthly newsletter. Popular Articles Opening Digital Business Account with Wio Bank Saudi Arabia’s Economic Cities KSA, an Irresistible Attraction for Tourists Government Entities and Online Portals Dealing with Import and Selling in Saudi Arabia: SFDA, SASO, SABER and FASAH Business Licenses Offered by MISA to

Healthcare Business in Saudi Arabia: The Kingdom Calls for Massive Investments The Kingdom of Saudi Arabia considers the Healthcare Sector a priority, seeking to provide quality healthcare and build a world-class infrastructure. Saudi Arabia’s healthcare sector is a platform of significant opportunities for investors offering 100% foreign ownership. Al Taasis offers you a fast business setup with customised prices. Step-by-Step Process to Obtain MISA License in Saudi Arabia Overview The Healthcare Industry is related to clinical services, manufacturing drugs and medical equipment, health insurance and other healthcare-related support services. The Healthcare sector in Saudi Arabia is an investment hub due to its large population, encouraging foreign investments and implementation of business-friendly laws. The Kingdom aims to build medical facilities worth $13.8 billion by 2030. Why is the Saudi Healthcare Market Attractive to Investors The healthcare sector is a unique growth opportunity for investors because demand for healthcare remains stable as the business cycle fluctuations affect the healthcare sector the least. The Growing Saudi Population The current population of Saudi Arabia is over 36 million, and it is expected to grow to 39.4 million by 2030 and 77.2 million by 2050. A large population has increased the demand for healthcare services and created more investment opportunities. To cater to the needs of its growing population, the Kingdom requires the following: 13,700 doctors by 2030 Additional 20,000 hospital beds by 2030 Healthcare is among the Top Priority Sectors The government has allocated $36.8 billion from its 2022 budget to healthcare and social development as the third largest expense. The Kingdom plans to invest over 65$ billion to develop its healthcare infrastructure. Privatisation of the Health Sector The Kingdom aims to improve healthcare infrastructure by privatising healthcare services and enhancing public-private partnerships (PPP). By 2030, the Kingdom aims to increase private sector contribution from 40% to 65%, including 290 hospitals and 2300 healthcare centres to be privatised. Fastest-Growing Digital Health Market in GCC The government is adopting digital information systems to offer practical solutions with reduced cost, better quality and easy access to resources. The government has allocated $1.5 billion to incorporate information technology in healthcare and implement digital transformation programs. Health Transformation Goals The Kingdom’s focus on healthcare development is aligned with Vision 2030, and National Transformation Program launched in 2022. The National Transformation Program targets to provide sustainable healthcare services and develop an integrated health system with e-health services and digital solutions. Inclusive health services will cover 88 % of the population by 2025 The unified digital medical records system will cover 100 % of the population. Health Clusters in Saudi Arabia The Ministry of Health has launched health clusters across Saudi Arabia to provide quality health services and build an integrated healthcare network. These clusters are a set of independent companies that focus on specialist services. The government aims to detach the Ministry of Health from overlooking hospitals and health centres and entrust the network of new companies with improving healthcare quality. Contact us to know more about the prerequisites of your business journey. Key Healthcare Entities in Saudi Arabia The Ministry of Health (MoH) The MoH is responsible for regulating and supervising all public and private health institutions. Health Holding Company (HHC) HHC is responsible for digitising and advancing the Kingdom’s healthcare system, focusing on providing medical services and care through health clusters. HHC focuses on expanding digital health programmes and virtual medical services. National Unified Company for Medical Supplies (NUPCO) Owned by the Public Investment Fund, NUPCO is centralised government procurement of pharmaceuticals, medical equipment and supplies to benefit all public healthcare facilities. It aims to achieve cost-spending efficiency and enhance governmental healthcare services in the Kingdom. Saudi Food & Drug Authority (SFDA) SFDA is the government agency that regulates the imports and safety of food, drugs, and medical devices. Council of Cooperative Health Insurance (CCHI) CCHI is responsible for regulating prevention and improving the value of healthcare services for health insurance beneficiaries. National Center for Privatisation (NCP) NCP assists in formulating regulations, creating privatisation frameworks, and preparing government assets and services identified for privatisation to ensure quality outcomes. Contact us to know more about the prerequisites of your business journey. Key Segments of the Healthcare Industry Al Taasis has the expertise for setting up businesses across all key healthcare industry segments. The healthcare sector can further be divided into two groups. The healthcare sector can further be divided into two groups. Pharmaceuticals, Biotechnology and Services Healthcare Providers Hospitals and other medical centres Nursing homes and rehabilitative centres Ambulatory service providers Healthcare Financiers Government agencies and private companies facilitate health insurance policies and fund healthcare services. Life Sciences Pharmaceutical firms making drugs and chemical products related to healthcare Manufacturers making high-tech medical equipment Biotechnology firms conducting research in the field of healthcare Saudi Arabia’s Recent Investment Deal in Healthcare Sector (Source: MISA) Burjeel Holdings, a UAE healthcare giant, signed a Memorandum of Understanding (MoU) with the Ministry of Investment (MISA), aiming to invest up to $ 1 billion in Saudi Arabia. The target investment areas will be in the healthcare ecosystem: specialty medical treatment centres and hospitals, digital health ventures, and clinical research programs. Invest in the Healthcare Sector of Saudi Arabia Al Taasis makes your investor experience more seamless by offering a one-stop platform. Get your license in a few easy steps and kickstart your business journey in Saudi Arabia. Our team can guide you further about the specific requirements of your business activity. Contact us to know more about the prerequisites of your business journey. Subscribe to Our Newsletter! Enter your email to receive our monthly newsletter. Popular Articles Opening Digital Business Account with Wio Bank Saudi Arabia’s Economic Cities KSA, an Irresistible Attraction for Tourists Government Entities and Online Portals Dealing with Import and Selling in Saudi Arabia: SFDA, SASO, SABER and FASAH Business Licenses Offered by MISA to Foreign Investors Visa Types in Saudi Arabia No posts found

Business Setup Types in Saudi Arabia Branch Office Representative Office Commercial Agency Agreement Temporary Commercial Registration Foreign investors have many options to incorporate a business in Saudi Arabia. Along with limited liability companies and joint stock companies, foreigners can set up their representative or branch offices, obtain a temporary commercial registration or appoint a commercial agent on behalf of their foreign company. → Technical and Scientific Services Office in Saudi Arabia Foreign companies that have appointed a Saudi agent to distribute the company’s products in the Kingdom seek to open an office to provide scientific and technical services or assistance to agents, distributors, and consumers of their products. Representative offices can also conduct product research and market surveys for the parent company. Based on the market research, the office can prepare a report for its head office. TSOs can conduct liaison activities to provide technical assistance but are not allowed to engage in commercial activities. Requirements for Scientific and Technical Office There are no minimum capital requirements for a Scientific and Technical Office. Its formation process is more straightforward than that of a company and quite like that of a branch. The office must submit an annual summary of its activity in the Kingdom to the Ministry of Investment (MISA). → Temporary Commercial Registration in Saudi Arabia Temporary Commercial Registration is a temporary license for specific government contracts. With Temporary Commercial Registration, you can not conduct activities in the private sector other than the specific government project. Requirements for Temporary Commercial Registration There is no minimum capital requirement to obtain TCR, but its formation process is like a branch office. You can not apply for TCR unless you get a government contract. You can even obtain a Temporary Commercial Registration for consulting projects. → Commercial Agency Agreement in Saudi Arabia A Commercial Agency Agreement is an option for foreign investors who do not intend to incorporate a legal structure in Saudi Arabia but are willing to trade in Saudi Arabia. Foreign investors can promote or distribute their products and services in the Saudi Market through their appointed Commercial Agent. Requirements for Commercial Agency Agreement The Commercial Agent must be a Saudi national, or the Commercial Agency must be owned by a Saudi national. You are required to sign an agreement with Saudi Commercial Agent, and your agreement must be registered with the Ministry of Commerce and Industry. You are not required to obtain a license from the Ministry of Investment Saudi Arabia (MISA). → Branch Office in Saudi Arabia You can conveniently open a branch office of your company in Saudi Arabia with 100% ownership of the business. The branch office is an extension of your parent company. Your branch office can conduct the commercial activity according to the parent company’s license scope. Your legal representative is responsible for managing your business in the Kingdom. Foreign branches cannot get involved in promotion, marketing or trading activities. Only those activities are allowed, which are mentioned in the MISA (SAGIA) license of the branch. Your branch office is eligible for both public and private sector projects. Requirements for Setting Up a Branch Office in Saudi Arabia Opening a branch office is similar to a limited liability company with the exact capital requirement. The difference is that you are not required to submit Articles of Association (AoA). The branch of a foreign company is required to deposit a minimum capital of SAR 500,000. No local sponsor or participant is required to open a branch office in Saudi Arabia. The branch office will obtain its Commercial Registration Certificate. Setting up a branch office might take some time if the manager is not a Saudi national, GCC national or a Saudi resident because a foreigner must have a residence permit as part of the incorporation process. Why should you open a branch office in Saudi Arabia? Convenient and Fast Process Setting up a branch office is more convenient than incorporating other entity structures as no specific requirements or approval of the Articles of Association are required. The Ministry of Commerce and Industry issues the certificate of registration to your business. Business Growth Your business expansion helps your brand get visibility to a diverse audience. You can grow your business quickly by opening a branch office in Saudi Arabia. Your company will get recognition in Saudi Market, reducing risk by getting more opportunities and increase profits. Access to Saudi Market By setting up a branch office, you are eligible to access the local Saudi Market to sell products and services. Your branch office can help you understand the demands of the local Market, and you must comply with the rules and regulations of the Kingdom. Documents Required to Open a Branch Office in Saudi Arabia Our team will guide you regarding the documents’ requirements depending on the business activity of your parent company. Setting up a foreign company or LLC branch typically takes three to six months (Source: Deloitte). Contact us to know more about the prerequisites of your business journey. Subscribe to Our Newsletter! Enter your email to receive our monthly newsletter. Popular Articles Opening Digital Business Account with Wio Bank Saudi Arabia’s Economic Cities KSA, an Irresistible Attraction for Tourists Government Entities and Online Portals Dealing with Import and Selling in Saudi Arabia: SFDA, SASO, SABER and FASAH Business Licenses Offered by MISA to Foreign Investors Visa Types in Saudi Arabia No posts found

Registration with Saudi Government Departments and Authorisation to Hire Staff Getting a MISA license is the first and foremost phase of incorporation in Saudi Arabia. The step-by-step process of obtaining a MISA License is explained in our previous blog This part will guide you through the next steps of your investor journey. For your legal entity to be authorised to hire people, you must register with relevant government departments. Your General Manager (GM) will have a one-time work visit visa issued at this stage, allowing him to travel to Saudi Arabia. Registration with the Ministry of Human Resources and Social Development (HRSD) We make you stress-free by handling your registration process with the Ministry of Human Resources and Social Development (HRSD). The role of HRSD is to achieve an efficient, systematic labour market and organised recruitment of foreign workers. Registration with General Organisation for Social Insurance (GOSI) GOSI, or General Organisation for Social Insurance, is a government organisation in Saudi Arabia that manages provisions of the Social Insurance Law. We help you with the registration process, and you must have a valid national ID or Iqama, a registered mobile number, and an email address to register in GOSI. GOSI Know-How GOSI contribution is calculated on the basic salary plus housing allowance. The employer is responsible for paying a 2% GOSI contribution. However, there is no GOSI fee to be paid by an expatriate employee in Saudi Arabia. The total GOSI percentage for Saudi nationals is 21.50%. Registration with the Zakat, Tax and Customs Authority (ZATCA) ZATCA is the Saudi authority regulating, administering, and implementing taxation in the Kingdom. ZATCA is responsible for administering and collecting all taxes, including Value Added Tax (VAT). ZATCA Know-How All persons who carry on an Economic Activity and register for VAT purposes will receive a Tax Identification Number from ZATCA. Under the GCC Unified VAT Agreement, any business with annual revenue over SAR 375,000 must register for VAT. Businesses with annual revenues between SAR 187,500 and SAR 375,000 have the option to register for VAT, which will allow them to claim VAT input tax. Businesses with revenues below SAR 187,500 are exempted from registration. Registration with the Chamber of Commerce We support you in registering with the Ministry of Commerce to issue a commercial registry and acquiring a membership number in the Chamber of Commerce. QIWA Registration As a foreigner in Saudi Arabia, you must register on the QIWA platform, and we can help you with the registration process. The purpose of the Ministry of Human Resource and Social Development (HRSD) in developing the Qiwa platform is to provide more than 80 services to the labour sector. HRSD is working with concerned authorities to facilitate the registration of employees and handle work contracts in cooperation with the Ministry of Justice. Qiwa is the only approved platform for documenting and approving work contracts. Muqeem Registration We assist you with Muqeem registration which allows you to review your resident workers’ data and complete their transactions online, anytime, and anywhere. Absher Registration We help you register with Absher, enabling you to access government services online, from passport and traffic services to civil and expatriate affairs services. Mudad Portal We help you register at the Mudad portal, a digital platform providing a Payroll System and a Compliance System for Small and Medium Establishments. Initiate Bank Account Opening We assist you in opening a bank account with a leading local bank in Saudi Arabia for depositing the initial capital. Al Taasis Supports You Beyond Your Business Setup! Our services are not just limited to your business setup; we extend our support and provide structured and practical business solutions whenever you need them. Click here to learn about our complete services. Contact us to know more about the prerequisites of your business journey. Subscribe to Our Newsletter! Enter your email to receive our monthly newsletter. Popular Articles Opening Digital Business Account with Wio Bank Saudi Arabia’s Economic Cities KSA, an Irresistible Attraction for Tourists Government Entities and Online Portals Dealing with Import and Selling in Saudi Arabia: SFDA, SASO, SABER and FASAH Business Licenses Offered by MISA to Foreign Investors Visa Types in Saudi Arabia No posts found

Step-by-Step Process to Obtain MISA License in Saudi Arabia We understand the complexity of business expansion and the role of local laws and regulations. Our blog post will help you navigate the MISA investor journey and how to get through the business setup process in Saudi Arabia. Getting MISA License As a foreigner, you must get MISA License to start your business in Saudi Arabia. Through a MISA Investor License, you get full ownership of your business and can operate freely across Saudi Arabia. Your preference for economic activity decides which type of license you need for your business. We help you get your investor license conveniently. Difference between SAGIA and MISA SAGIA MISA The Saudi Arabian General Investment Authority (SAGIA) is the former name of the Ministry of Investment Saudi Arabia (MISA). The Kingdom established SAGIA in 2000, which was responsible for attracting investment and licensing for local and global investors. SAGIA was fully transformed into a ministry in 2020 and renamed as MISA (Ministry of Investment Saudi Arabia), which is solely responsible for issuing investment licenses to foreign investors and overseeing foreign investment into the Kingdom. Types of Legal Entities in Saudi Arabia Limited Liability Co (LLC) Limited Liability One-Person Company Joint Stock Company Foreign Company Branch Solidarity Professional Company Difference between Branch and Subsidiary Branch Subsidiary A branch is established at a different location to increase business coverage. It is an extension of the parent organization to conduct the same business operations as the parent company. The branch has no separate legal standing, and it reports to the head office of the company. While on the other hand, a subsidiary is considered a separate legal entity from its holding company. The subsidiary is free to conduct its business operations, and it is not mandatory to undertake the same operations as its holding company. Step 1: Company Structure It is always advised to obtain expert legal advice when deciding on your legal entity in Saudi Arabia. The right selection of company structure and careful planning can help your business grow fast. Step 2: Documentation Before applying for the MISA license, there are prerequisites that you must fulfil. Our team guides you regarding the required documents and helps you with the documentation process. Step 3: Name Reservation If you choose to set up a branch in Saudi Arabia, you will get a license in Saudi Arabia with the same name as the parent company. Subsidiaries get to choose the same trade name with an append word. Our team guide you through carefully selecting names that mirror your brand. Step 4: Drafting the Articles of Association We help you draft the Articles of Association for your MISA-licensed company. Our operations team guides you through the detailed decision-making and ensures the local documentation align with your growth plans. Difference between Memorandum of Association and Articles of Association Memorandum of Association Articles of Association A Memorandum of Association (MoA) is a legal statement signed by all shareholders agreeing to establish the company. Articles of Association (AoA) is a document containing operational rules about running the company. Step 5: Commercial Registration (CR) Issuance Getting your Commercial Registration (CR) is the most crucial part of being officially registered in Saudi Arabia and with MISA. After getting your MISA license and getting your Articles of Association, we proceed to issue your Commercial Registration. Al Taasis is Your Trusted Gateway to Saudi Business Setup! After going through the detailed process, you will have a clear roadmap. We simplify your entire business setup process with our comprehensive services. We will be delighted to assist you further with your business incorporation process. Initiate your business journey with Al Taasis to mitigate risk, stay compliant and accelerate your success. Contact us to know more about the prerequisites of your business journey. Subscribe to Our Newsletter! Enter your email to receive our monthly newsletter. Popular Articles Opening Digital Business Account with Wio Bank Saudi Arabia’s Economic Cities KSA, an Irresistible Attraction for Tourists Government Entities and Online Portals Dealing with Import and Selling in Saudi Arabia: SFDA, SASO, SABER and FASAH Business Licenses Offered by MISA to Foreign Investors Visa Types in Saudi Arabia No posts found