Setting Up Business in Saudi Arabia:
All You Need to Know
- Commercial registration of the company, certified by a Saudi Embassy
- Financial statements for the last year certified by a Saudi Embassy
- MISA Application: estimated time ranges from 5 – 10 days
- Articles of Association: estimated time ranges from 1 – 5 days
- Commercial Registration issuance: estimated time ranges from 5 – 10 days
- Trade license/Commercial Registration
- Articles of Association (AoA) and/or Memorandum of Association (MoA)
- Audited financial statement of the last year
- The Ministry of Commerce and Industry (MCI)
- The Ministry of Investment Saudi Arabia (MISA)
- Trade License
- Service License
- Industrial License
- Professional License
Different types of business structures are available with their advantages, requirements, and differing scope of business activities and registration requirements:
- Limited Liability Company (LLC)
- Limited Liability One-person Company
- Joint Stock Company
- Foreign Company Branch
- Solidarity professional company
Limited liability companies (LLC) require a minimum capital investment of around $133,100 (SAR 500,000)
Limited Liability Company (LLC) can have one shareholder and is limited to a cap of 50 shareholders.
No local sponsor is necessary to register a business with the MISA. As such, there are no legal disadvantages compared to other local companies.
Branch offices can engage in commercial activity within the scope of the license and require a minimum capital investment of $133,100 (500,000 Riyals).
Subsidiaries are a popular option for company setup in Saudi Arabia. Joint Stock Companies are rare outside of the banking and insurance sectors. LLCs are the most popular independent company type.
Representative offices offer the option of a temporary activity in Saudi Arabia. While STOs are primarily responsible for liaison activities and are not allowed to be commercially active, TCRs are temporary licenses to complete specific government tenders and cannot be active in the private sector. As opposed to branch offices, TCRs are also not required to invest a minimum capital.
A minimum of two shareholders are required for a Saudi Joint Stock company, and the minimum capital requirement is SR500,000 or SR5,000,000 (in the case of a single shareholder).
A foreign company appoints General Manager to represent local company affairs, such as opening or operating a bank account.
Saudi Arabia announced the Regional Headquarters Programme, which requires international companies looking to operate in the Kingdom to establish their regional headquarters in the Kingdom.
Depending on specific projects and activity sectors, there are financial incentives for tax and duty relief.
Saudisation is a national localisation program in Saudi Arabia called the Nitaqat program. Foreign companies in Saudi Arabia are required to hire around 30% of Saudi nationals, and the percentage can vary as per the type of business.
There are 4 Economic Cities, 1 Special Economic Zone and 36 Industrial Cities in Saudi Arabia. All these offer flexible regulations and incentives to foreign investors depending on the business license and type of activity.
Licensed entities are permitted to own property as per the entity’s need. Our team can guide you about relevant rules and restrictions regarding property ownership in Saudi Arabia.
- Property ownership for private housing
- Property ownership as headquarter of the industrial entity
- Property as administrative headquarter or residence for the employees
- Property ownership for warehouses
Foreign investment is prohibited in some areas mentioned on the Negative List. Our team can guide you about the restricted investment areas.