1. What are the steps to set up a 100% foreign-owned company in Saudi Arabia?
In order to set up a 100% foreign-owned company in Saudi Arabia, you have to obtain an investment license from the Ministry of Investment (MISA). As a next step, you have to register your company with the Ministry of Commerce and get a commercial registration (CR). The next crucial step is to open a corporate bank account in Saudi Arabia, and deposit the required amount, and get a business location. Also in order to obtain visas for your employees, you’ll need to register your company with the General Organization for Social Insurance (GOSI). As a final step, you have to comply with all the municipal regulations of the region to get any sector specific permits. Hiring a local consultant can ease the process and help you establish your company in Saudi Arabia hassle free.
2. What are the benefits of having 100% control over a business in Saudi Arabia?
There are numerous benefits associated with having 100% control over a business in Saudi Arabia. It allows foreign investors to have complete power over decision making exempting the need for local partners. Having 100% control helps you have greater autonomy in operations, strategy, and financial decisions, which can help the business to adapt to changes in the market. Also the investors can possess all profits and have a streamlined process in management of the business. Moreover, it also helps to maintain confidentiality and intellectual property. Having 100% control over business in Saudi Arabia is surely advantageous for companies which aim to establish their presence in the Saudi market with global standards and practices.
3. What is the minimum paid-up capital requirement for setting up a company in Saudi Arabia?
The minimum paid-up capital requirement for setting up a company in Saudi Arabia differs depending upon the type of business and the sector in which it is involved. In general for a limited liability company (LLC), the typical paid up capital requirement is around SAR 500,000 which is approximately around USD 133,000. But this amount can be of huge to foreign-owned entities specially for those companies that are operating in certain sectors which demand greater investment. In order to obtain latest updates regarding the paid up capital requirement, it is essential to consult with MISA as these requirements can be changed due to current investment policies in Saudi Arabia and the nature of business activities involved.
4. Do you need a physical presence to set up a company in Saudi Arabia?
Yes, you have to obtain a physical presence for setting up a company in Saudi Arabia. So in order to have a physical presence for your company in Saudi Arabia, you have to secure a registered office address and must be compliant towards the local regulations regarding company premises. A physical address is an essential element for commercial registration in the country and is essential to receive important correspondence from the government authorities. However, businesses that are involved in digital and service sectors can go with virtual offices as a temporary solution.
5. How can expert consultants help with Saudi Arabia company formation?
Seeking professional assistance to start your business in Saudi Arabia can be a great decision as it helps you simplify the process of setting up a company in Saudi Arabia. They can offer you with expert guidance on legal requirements, help secure the necessary licenses, and ensure compliance with Saudi regulations. Seeking help from Consultants can help the businesses to streamline their documentation preparation, ease their process of opening bank accounts, and help with the selection of suitable business structures. The local expertise of Consultants would also come in handy as they will help the investors to understand cultural nuances and business landscape of the country thus reducing risks and delays. Additionally, the valuable insights shared by the Business Consultants would help the businesses to establish a strong presence in the dynamic market of Saudi Arabia.
6. What is the process for preparing company incorporation documentation in Saudi Arabia?
There are several steps included in the process of preparing company incorporation documentation in Saudi Arabia. The first step is to draft the company’s Articles of Association (AOA) and Memorandum of Association (MOA), which details the objectives of the company and structure. Next step is to prepare a business plan and feasibility study to obtain an investment license. These documents should be translated into Arabic and notarized. As a next step you have to register these translated documents with the Ministry of Commerce, and should secure a commercial registration (CR). As a last step, ensure that all the necessary permits and licenses are obtained.
7. How do you register with the Ministry of Investment of Saudi Arabia (MISA)?
The first step to register with the Ministry of Investment of Saudi Arabia (MISA), is to create an account on their online portal. Then submit a detailed application detailing the information about your company like the ownership details, type of business, capital structure, etc. Along with the application, you should also upload certain documents like identification documents of shareholders and directors, Articles of Incorporation of company, Board Resolution, etc. Once your application is complete MISA will review your application and will issue an investment license.
8. How can you obtain a Commercial Registration (CR) license for a company in Saudi Arabia?
In order to get a Commercial Registration license in Saudi Arabia, you have to make use of their online platform and submit various documents such as the MISA license, Articles of Association, and other company-related documents. Also, specify the type of business activity your company wishes to undertake in Saudi Arabia. Once the application is complete, the Ministry of Commerce will review the application and issue you a Commercial Registration license.
9. What is the importance of selecting a business premises and registering a national address in Saudi Arabia?
Selection of business premises in Saudi Arabia is very crucial because it serves as the official address and base of operations of your company in Saudi Arabia. It is this address that is used for all government communications, correspondence, and inspections. It is also crucial for obtaining licenses, opening of bank accounts and maintaining compliance with local regulations.
10. What post-incorporation registrations are required for a Saudi company?
After the incorporation of your business in Saudi Arabia, you have to register with the General Organization for Social Insurance (GOSI) for the social security of employees, the Zakat, Tax and Customs Authority (ZATCA) for tax compliance, and the Ministry of Human Resources and Social Development (HRSD) for matter related to labours. Also additional registrations would also be required depending upon the industry your company falls into.
11. What is the process for obtaining a General Manager (GM) residency (Iqama) visa in Saudi Arabia?
Inorder to obtain an Iqama for the General Manager, secure a work visa for the GM through the Saudi embassy or consulate functioning in their home country. Once the GM enters Saudi Arabia, submit an application at the Ministry of Interior through the Absher platform or via a registered sponsor (Kafeel) to convert their work visa into an Iqama, and this include medical examination and biometrics, which allows the GM to live and work legally in Saudi Arabia.
12. How do you register the General Manager with government authorities in Saudi Arabia?
As a first step to register the General Manager with government authorities in Saudi Arabia is to update the Commercial Registration of the company with the GM’s details through the online portal of the Ministry of Commerce. Next, register the General Manager with the General Organization for Social Insurance (GOSI) and ensure the compliance with requirements for social insurance. Also, the details of GM should be updated in the system of the Ministry of Human Resources and Social Development (HRSD).
13. How can a company open a corporate bank account in Saudi Arabia?
Inorder to open a corporate bank account in Saudi Arabia, you have to choose a bank that matches with the requirement of your company. After the selection of suitable bank, submit the required documents and a thorough check will be conducted to ensure the relevance of the documents. A background check on the company directors would also be done before granting a bank account in the chosen bank. If the background check and documents are satisfactory, then the applicant would be asked to sign certain documents like terms and conditions, compliance policies, etc. of the bank. Last step is to deposit the necessary amount of cash in your account and receive documents from the bank to access the account.
14. What are the main legal entity structures available in Saudi Arabia?
The main legal entity structures available in Saudi Arabia are :
- A LLC or Limited Liability Company is ideal for foreign investors who have liability limited to the capital invested.
- A Branch Office allows the foreign companies to function directly in Saudi Arabia.
- A Representative Office allows marketing or promotion, but direct sales are not allowed
- A Joint Stock Company or JSC is ideal for those aiming for larger investments and companies planning to get listed on the stock exchange.
15. What incentives does the Saudi government provide for company setup?
The incentives provided by the Saudi government include investment licenses, various tax exemptions like zero personal income tax and a 20% corporate tax rate, provision for 100% foreign ownership in many sectors, and access to special economic zones like NEOM which provide many incentives like reduced custom duties, tax breaks, etc. Additionally financial support is also provided through many government initiatives like the Public Investment Fund (PIF).
16. What business activities are restricted for foreigners in Saudi Arabia?
Foreigners are restricted from doing certain business activities in Saudi Arabia and they fall under 2 categories like industrial sector and service sector. Oil exploration, security services, manufacturing military equipment, real estate business in Makkah and Madina, certain retail sectors etc. are some of the restricted business activities in the Kingdom.
17. What documents are required to set up a business in Saudi Arabia?
In order to set up a business in Saudi Arabia, the documents like investment license from the Ministry of Investment, Articles of Association, business plan, commercial registration certificate, passport copies of shareholders, etc, are required. For foreign investors, license from Saudi Arabian General Investment Authority (SAGIA) is also required. A lease agreement is required to get a physical office in the country. Also, a Chamber of Commerce certificate and a Commercial Registration certificate are also required to operate in the country legally.
18. Is it necessary to visit Saudi Arabia to complete the company setup process?
Though many steps like obtaining licenses, registration with the Ministry of Commerce and filing of documents can be done remotely, visits might be required to open business bank accounts, sign official documents, etc.
An initial visit would be a great idea to explore the market and this can also help in networking. However the necessity and frequency of the visit depends upon the type of business and industrial requirements.
19. How long does it take to set up a business in Saudi Arabia?
Typically 1 to 3 months are required to set up business in Saudi Arabia. But it can vary depending upon the nature of the business and paperworks involved.
20. What is required for startups to expand to Saudi Arabia?
Understanding of the market and its regulations, cultural landscape, etc are required for startups to expand to Saudi Arabia. You also have to obtain a Saudi Arabian General Investment Authority (SAGIA) license, and register your business with the Ministry of Commerce. Navigation of local laws like Saudization and Sharia are also essential. Partnerships with local entities and utilization of incentives from the Vision 2030 initiative would be a great idea. Startups are also required to open a bank account, and have a clear understanding of tax obligations in the country. Support from organizations like the Saudi Venture Capital Company (SVC) can streamline their market entry and growth in the country.
21. What are the document requirements for established businesses in Saudi Arabia?
The documents required for established businesses planning to set up a company in Saudi Arabia, include a copy of the company’s Articles of Association, a Board Resolution to establish the branch in Saudi Arabia, a Commercial Registration certificate from their home country, and a Power of Attorney authorizing a representative for their business. Also, you’ll be asked to provide audited financial statements of the last fiscal year and the documents to prove the identity of the partners or shareholders of the business.
22. What are the different types of MISA licenses available?
The Ministry of Investment of Saudi Arabia (MISA) offers various types of licenses in Saudi Arabia to meet your different business needs. To name a few, some of them are the Industrial License for manufacturing companies, the Service License for consulting firms, the Trading License for selling items, etc. for companies aiming to open liaison offices to support their headquarters working abroad, there is a license for Scientific and Technical Offices, so different license are provided by the MISA, and it’s up to you to choose the one that rightly matches your needs.
23. What is the role of the Commercial Registration (CR) in the setup process?
The Commercial Registration (CR) is an important element in the company formation process in Saudi Arabia. It is the CR that helps you officially register your business with the Ministry of Commerce in KSA, which is a crucial step to gain unique identity in the vibrant market of Saudi Arabia. The Commercial Registration is crucial in opening a bank account in the country, hiring employees, signing various contracts, and conducting other essential activities involved in starting a business and establishing it in the Kingdom of Saudi Arabia. So a Commercial Registration (CR) provides your business with the legal authority to operate within the Kingdom.
