An Overview of Company Incorporation in Saudi Arabia

The Kingdom of Saudi Arabia has its own set of regulations and procedures for company formation. The different types of business structures available in Saudi Arabia are Limited Liability Companies, Joint Stock Companies, and branches of foreign companies. We assist in choosing names that do not conflict with the existing trademarks or company names. We draft and notarise the MOA and AOA. These necessary papers outline the company structure, objectives and rules. Foreign companies need a local agent who is a Saudi national or a Saudi-owned company. Consent from the Saudi Arabian General Investment Authority (SAGIA) is required for foreign investors. We apply for Commercial Registration at the Ministry of Commerce and Investment.

With Enterslice, Embrace Your Company Incorporation in Saudi Arabia

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Start With Purpose and Mindset

Let us start the journey of your company's incorporation in Saudi Arabia with support and determination. Let us help you create purpose for your business with a sustainable business model.

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Co-Create the New Culture

Let us create a healthy space within your company to let innovation breathe and give Enterslice a chance to make a humane-friendly business space.

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Think outside the Box

Enterslice, with its innovative approach, could bring diversity to your business by aiding experiments and intrapreneurship culture within your organisation.

Eligibility Criteria for Company Incorporation in Saudi Arabia

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No. of Shareholders and Directors

A minimum of two shareholders and one director is required for company incorporation in Saudi Arabia.

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Share Capital Requirements

For Private Companies- 2,000,000 SAR. For General Partnership – 500 SAR. For Partnerships Limited by stakes- minimum 2 million SAR

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Registered Office Address

Provide the registered office address. However, physical presence is not required to set up a company in Saudi Arabia.

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Resident Company Secretary

Appoint a resident company secretary.

Procedure to incorporate a company in Saudi Arabia

1.Choose a suitable business structure

Before proceeding to the registration process, it is necessary to analyse the unique business goals, needs and situations to identify the appropriate business structure for your company. Enterslice will advise you on the most optimum business structure, paid-up share capital and corporate structure.

2. Application for Investment License

The subsequent step is to apply for the Investment License for your corporation, which is necessary for non-GCC foreign investors and only applies to carrying out commercial activities other than those set out in the “Negative List”. An application must be submitted to the SAGIA, a government body accountable for providing licenses for 100% foreign-owned companies to function in the country. SAGIA will issue a pre-approval certificate which that authorises the company to be registered as well as its ability to have 100% foreign possession.

3. Reserve Company Name

You will have to choose a preferred company name for your business. Enterslice will then reserve it with the Unified Centre and await approval before any other forms can be submitted. The forms include incorporation forms, articles of association and deed of establishment.

4. Preparation of necessary papers required for incorporation

Draft and notarise the MOA, AOA, Business Plan, Company Constitution and Personal information of directors and shareholders. These necessary papers outline the company’s structure, objectives and rules.

5. Appoint a Local Agent

Foreign companies need a local agent who is a resident of Saudi Arabia.

6. Obtain a Commercial Registration (CR)

Application for a Commercial Registration (CR) at the Ministry of Commerce and Investment (MCI). You must submit the required necessary papers, including the SAGIA approval, MOA and AOA.

7. Obtain a Value Added Tax (VAT) Number

Register for VAT with the General Authority of Zakat and Tax (GAZT) if applicable.

8. Open a Bank Account

To bring the company into operation, opening a corporate bank account in the company's name is necessary. Once the Certificate of Registration is issued, you can activate your bank account and unfreeze your initial capital deposits.

9. Obtain other licenses and permits

Depending on the nature of the business, additional licenses may be required from relevant authorities.

10. Employment Contracts

Prepare employment contracts in compliance with Saudi Arabian labour laws.

Qualities you will find in the Services provided by Enterslice

Client Focus

Enterslice puts great emphasis on client focus. We prioritise the needs and complaints of our clients when offering any business service.

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Timeliness

Enterslice is particular about time management as it is vital on the road to personal success and even more critical in the management of any business. We attend to all client’s needs to surpass the agreed timelines.

Adaptability

Enterslice has a unique quality of adapting to different levels of management and business environments. We believe that the synchrony created by business services catapult an organisation to great success.

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Tax Structures of Companies Incorporated in Saudi Arabia

Different types of taxes in Saudi Arabia are Corporate Income Tax, Value-Added Tax, Social Insurance Tax and Real Estate Transaction Tax. Saudi Arabia imposes a flat corporate income tax rate of 20% on the taxable income of residents and non-resident companies. It introduced VAT on January 1, 2018. The standard rate is 15%. Businesses meeting specific criteria must register for VAT and comply with related reporting and payment obligations. Zakat is a form of almsgiving in Islam, and in Saudi Arabia, it is levied on the wealth and income of Saudi and GCC nationals. For companies, Zakat is typically calculated at 2.5% of the company’s net revenue. In addition to national taxes, companies may be subject to municipal taxes and contributions to the General Organisation for Social Insurance (GOSI) for employee social insurance coverage. Withholding tax generally applies to certain non-residents' payments like dividends, interest, and royalties.

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Different Kinds of Business Structures in Saudi Arabia

Different Types of Business Structures in Saudi Arabia are:

1. Limited Liability Company

A limited liability company is the most common type of business structure. It mandates having at least one director and shareholder who may be a natural person or another corporation. If the number of shareholders at any given time becomes more than 20, then they must appoint a Board of Directors. The companies can, however, engage only in the activities described under the approved objectives of the business.

2. Joint Stock Company

Foreign investors willing to set up large-scale operations can choose the joint stock company. This form of company can be owned wholly by one or more natural persons or companies who may be foreigners. A Joint Stock Company must appoint an auditor and file audited financial statements yearly.

3. Limited Partnership Company

LLC is suitable for foreign entrepreneurs who are unfamiliar with the business market. This entity requires a minimum of two members and at least one director and doesn’t have any minimum capital requirement to register the business.

4. Branch Office

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

5. Representative Office

A Representative Office can also be established in Saudi Arabia. The parent company controls it and functions on behalf of the parent company.

necessary papers Required for Company Incorporation in Saudi Arabia

The specific necessary papers required for company incorporation in Saudi Arabia are as follows: i) Completed Investment License Application Form ii) Notarised copy of Company’s Board resolution enclosing the partner’s names, percentage of each partner’s capital iii) Contribution, activity and general manager appointment iv) Attestation of the details by the KSA Embassy in the foreign investor’s country iv) Audited Financial Statements of the past three years v) Certificate of Incorporation of the company attested by the KSA Embassy in the foreign investor’s country vi) Copies of the Articles of Association of the company attested by the KSA Embassy in the foreign investor’s country vii) Approval from the concerned Ministry of KSA for doing business activity in KSA.

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Favourable Business Environment

Saudi Arabia has been actively creating a more favourable business environment, implementing various economic and social reforms to attract foreign investment and stimulate domestic business growth. Saudi Arabia’s Vision 2030 is a comprehensive plan to reduce the country’s dependence on oil, diversify the economy, and foster a dynamic business environment. It includes initiatives to enhance infrastructure, education, healthcare and technology. The Saudi government has undertaken efforts to improve the ease of business in the country. Reforms include streamlining administrative processes, reducing bureaucracy and implementing digital services.

Benefits of working with Enterslice that you can’t miss

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Highly Professional and Reliable Team

When dealing with professional services, having a professional and reliable team is essential for a smooth and successful experience, whether for company incorporation, compliance or other business-related services.

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Deep Knowledge and understanding of local rules and regulations

Enterslice has a profound experience and knowledge of local rules and regulations in company incorporation, compliance, and business consulting.

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Strong Connection with Saudi Arabian Authorities

Enterslice has a strong connection with Saudi authorities, which is a valuable asset for businesses in Saudi Arabia. The connection facilitates smoother interactions, enhances regulatory compliance and contributes to positive relationships with relevant government agencies.

Benefits of Company Registration in Saudi Arabia

Economic Diversification

The Saudi Government’s Vision 2030 aims to diversify the economy by reducing dependence on oil. This creates opportunities for business across various sectors, including technology, entertainment, tourism and renewable energy. Vision 2030 is a long-term strategic framework that outlines the goals and initiatives for economic and social development in Saudi Arabia. It includes specific objectives to increase the contribution of non-oil sectors to the GDP and create a more vibrant and diverse economy.

Government Support and Incentives

The Saudi government provides support and incentives to attract foreign direct investment. It includes investment incentives, subsidies and other assistance for eligible projects. SAGIA is the primary government agency responsible for promoting investment in the Kingdom. It facilitates the establishment of businesses and provides information about investment opportunities, regulations and incentives. The government may allocate land at preferential rates or offer incentives to companies to access suitable locations for their operations.

Tax Benefits

Saudi Arabia offers certain tax benefits to businesses to encourage investment, economic development and diversification. The tax regime in Saudi Arabia includes Corporate Income Tax (CIT) and other taxes and other specific provisions that may provide benefits to eligible businesses. Even though Corporate Income Tax exists in Saudi Arabia, it is relatively low compared to many other jurisdictions. Additionally, specific industries and projects may qualify for tax exemptions or reduced rates as part of government initiatives.

Challenges of Incorporating a Company in Saudi Arabia

Legal and Regulatory Complexity

The legal and regulatory environment in Saudi Arabia can be complex and subject to change. Navigating various regulations, obtaining necessary permits and ensuring compliance with local laws may pose challenges.

Bureaucratic Processes

Dealing with bureaucratic processes and administrative procedures can be time-consuming. Businesses may encounter delays in obtaining approvals and facing challenges related to paperwork and Paper works.

Local Sponsorship Requirements

In specific business structures like limited liability companies and foreign companies, there is a requirement to have a local sponsor. While local sponsorship is common practice, finding a suitable local partner can be challenging.

Limited Access to Certain Industries

Specific industries may have restrictions on foreign ownership or may require particular approvals. For instance, sectors such as real estate and media have limitations on foreign investment.

Company Incorporation Services provided by Enterslice

Company Structure Selection

Enterslice advises clients in choosing the most suitable legal structure for their businesses, considering liability, ownership and operational requirements.

Legal necessary paperation Drafting

Enterslice assists in preparing and drafting legal necessary papers required for company incorporation, including MOA, AOA and other relevant necessary papers.

Registration with Authorities

Enterslice assists in preparing and submitting necessary necessary papers for the company's registration with relevant authorities such as SAGIA and MCI.

Obtaining Licenses and Permits

Enterslice assists in obtaining the necessary business licenses and permits required for specific industries or activities.

Our Success Story

We have 10+ years of experience in company incorporation in Saudi Arabia and other legal compliances. We are a global network of legal consultants, and our journey is full of success stories that we have achieved through these years by making hassle-free company incorporation in Saudi Arabia. We provide quality service, which results in client satisfaction. We streamline your company incorporation process, making it easier for our clients to understand.

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Our Commitment to Excellence

Commitment

Quality Service

At Enterslice, we are committed to providing our clients with top-notch services, ensuring that their business needs are met with precision and accuracy. Our team of dedicated professionals go above and beyond to deliver exceptional results.

Commitment

Client Satisfaction

Your satisfaction is our priority. We strive to exceed your expectations by listening to your needs, addressing your concerns and providing personalised solutions. We value your trust and work tirelessly to ensure your complete satisfaction.

Commitment

Continuous Improvement

We believe in constantly evolving and improving our services to stay ahead of the curve. Our team is dedicated to staying up-to-date with industry trends and best practices to provide innovative solutions that drive success.

Safety and Security in Doing Business

Ensuring safety and security in doing business is essential for the success and sustainability of any enterprise. Saudi Arabia has maintained a relatively stable political environment. However, businesses should stay informed about political developments and potential stability risks. Adhering to local laws and regulations is essential for the safety and security of a company. Staying compliant with legal requirements minimises the risk of legal issues affecting operations adversely. Registering trademarks, patents and copyrights in Saudi Arabia ensures legal protection against infringement. While Saudi Arabia offers a generally secure business environment, businesses should conduct thorough risk assessments, stay informed about local conditions, and prioritise safety and security measures to ensure long-term success and resilience.

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Frequently Ask Questions

Yes, Saudi Arabia is a tax haven. There is no income tax chargeable to residents and ex-pats. Sales Tax or VAT rate is significantly less. The lack of income tax and favourable investment laws make it an appealing destination.

Kingdom of Saudi Arabia provides ease of doing business. Saudi Arabia, known for its amicable business environment, welcomes foreigners interested in their country. It has a world-class infrastructure and is a highly tax-efficient country.

The Saudi Arabia currency is the Saudi Riyal.

It would be best if you preferred Enterslice for setting up your business in Saudi Arabia because Enterslice pays attention to details, and professionals at Enterslice have a strong understanding of concepts. They have immense knowledge and are experts in their field.

Setting up a company in Saudi Arabia costs SAR 15,000 to SAR 30,000.

Yes, foreigners can start a company in Saudi Arabia.

You can own a 100% company in Saudi Arabia, but you must get an investment license from MISA.

MISA requires foreign LLCs to have a minimum capital of SAR 500,000.

No, only non-Saudi businesses are liable for corporate income tax in Saudi Arabia.

Yes, a non-Saudi can open a company in Saudi Arabia, but you will have to obtain a license issued by the SAGIA.

Yes, there is no personal income tax in Saudi Arabia.

Standard of Living in Saudi Arabia

The Standard of living in the country has improved, driven by factors such as economic diversification, infrastructure development and social reforms. This has attracted businesses to be set up in Saudi Arabia. Saudi Arabia has invested in economic diversification in its Vision 2030 initiative. Efforts to reduce dependence on oil, promote non-oil sectors and attract foreign investment contribute to the overall economic growth. The Housing sector has developed various projects to provide affordable housing options for residents. The Saudi government has also initiated programs to address housing needs and improve living standards.

 

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Digital Transform

Broad Economy

Saudi Arabia's economy has historically relied on oil and gas revenues. However, the country has been actively pursuing economic diversification initiatives to reduce dependence on oil and create a more diverse and sustainable economy. It is actively diversifying its economy by investing in technology, tourism, entertainment, mining, renewable energy and manufacturing sectors. The goal is to create a more balanced and resilient economy.

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