Company Registration in Saudi Arabia

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Company Registration in Saudi Arabia- An Overview

With the largest economy in the Arab world, Saudi Arabia is considered as an "energy superpower". It has third highest value of natural resources. Saudi oil reserves are the second largest in the world and it is the world's leading oil exporter and second largest producer. The economy of country is dependent on oil and has strong government control over major economic activities. 100% foreign-owned businesses were allowed in the Kingdom.

With no minimum capital required, procedures for starting a business have been relatively streamlined. Foreign investment is screened by the government, and direct purchase of shares in Saudi companies listed on the stock exchange has been permitted since 2015, opening the market to foreign institutional investors. Various incentives attract investors to set up a company in Saudi Arabia. Although the process may be slightly complex but our team of in-country experts work with local governments to take care of the incorporation process. This saves your valuable time and money.

Why should you consider Saudi Arabia?

There are multiple reasons to consider registering your company in Saudi Arabia. Some of them are as follows:

  • Ease of doing business is one of the biggest reasons why a lot of entrepreneurs want to start a company in Saudi Arabia.
  • In a recent Survey, Saudi Arabic was rated as the Twelfth best legislation in terms of ease of doing business.
  • The government authority provides incentives with a view to encourage Saudi Arabia company formation.
  • Saudi Arabia is ahead of the curve when it comes to using the world’s newest cutting-edge technologies which immensely contributes to the general business environment there.
  • Saudi Arabia is a highly tax efficient country. It certainly scores highly in this regard.
  • Saudi Arabia is also regarded as one of the safest countries in the world which lure a lot of people from around the world.
  • It has a secure social and commercial environment which boost business investments.
  • Commercial spaces in Saudi Arabia are well furnished and equipped with world class furniture, amenities and facilities.

Different types of Business Structures in Saudi Arabia

Before entering into the company registration process, it is necessary to decide which type of business structure you want to register. There are different types of business structures that are available in Saudi Arabia.

  • Limited Liability Company

It is one of the most common types of business structure. This form of business structure necessitates having at least one shareholder who may be a natural person or another corporation, and at least one director. However, in case where the number of shareholders is more than 20, they are required to appoint Board of Directors. These companies can engage in activities described under the approved objectives of the business.

  • Joint Stock Company

Foreign investors who are interested in setting up large scale operations can choose the joint stock company. This form of company can be owned fully by one or more natural persons or companies who may be foreigners. A Joint Stock Company needs to appoint an auditor and file audited financial statements each year.

  • Limited Partnership Company

This form of company is suitable for foreign entrepreneurs who may not be familiar with the business market. This form of entity requires minimum of two members and at least one director and it doesn’t not have any minimum capital requirement to register the business.

  • Branch Office

Foreign Companies can open branch office in Saudi Arabia after obtaining necessary approval from the concerned authority in Saudi Arabia. A branch Office may engage in commercial activities but it should be within the scope of approval issued from the authority. The business can promote and solicit business in Saudi Arabia.

  • Representative Office

One may also open a representative office in Saudi Arabia. Representative office is controlled by the parent company.

Basic Requirements for Company Registration in Saudi Arabia

The requirements are as follows:

  • Shareholders (minimum 2);
  • One Director;
  • Share Capital;
  • Registered Office Address;
  • Resident Company Secretary.

Documents required for Company Registration in Saudi Arabia

The following documents are required to register your company in Saudi Arabia:

  • Investment license application form;
  • Notarised board resolution with partners’ name, share of each partners capital;
  • Audited financials of the last 3 years;
  • Copy of Articles of Association;
  • passport copies of the shareholders;
  • Proof of ID and address proof of directors and shareholders;
  • Approval from the ministry of Saudi Arabia to start business activity in Saudi Arabia;
  • Attested copy of POA.

How to register your Company in Saudi Arabia?

The procedure to register company in Saudi Arabia is as follows:

  • Reserve Company Name

The first step towards company registration is name reservation. The name should be unique and should not infringe any intellectual property rights of any company already registered in Saudi Arabia.

  • Submission of AOA

In the next step the Articles of Association needs to be submitted to the concerned authority and the company documents are notarised.

  • Open a corporate bank account

Next, a corporate bank account has to be opened which will the means for financial management and carrying out various transactions related to the new company.

  • Obtain Commercial Certificate

In the final phase of Company Registration a commercial certificate needs to be obtained. All the legal documents needs to be submitted to the Commercial Registry department of ministry of commerce and industry in Saudi Arabia.

Frequently Asked Questions

Saudi Arabia is the Middle East’s largest economy. The government has taken various initiatives that are business friendly which has drawn foreign investment over the last few years.

Limited Liability Company is the most common type of business structure used in Saudi Arabia. A small business start-up can form an LLC to escape double taxation.

No, foreigners cannot invest in any industry as there are certain industries in the negative list like oil exploration and production, real estate, tourism etc.

Top business sectors in Saudi Arabia includes Travel and Tourism Business, Hospitality Business, Food and Beverage Business, Construction Business, Healthcare Business.

Get IP Protection, ensure web presence, initiate accounting and bookkeeping, among others.

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