Saudi Arabia ranks 16th on the IMD World Competitive Index. This nation is a powerhouse for entrepreneurs and international businesses planning to establish a presence. The strong economy, strategic location, and investor-friendly government initiatives ease the business setup in Saudi Arabia. The new Saudi Investment Law offers 100% foreign ownership in most sectors, making the nation a global hotspot for foreign investment. The fundamental step in setting up a foreign company is acquiring a Ministry of Investment of Saudi Arabia (MISA) license, which is termed the “register”. It grants operational licenses across the nation.
The essential documents to register a foreign company include a Certification of Incorporation of the parent company, an Article of Association, a Board of Resolution approving the Saudi set, and a notarized Power of Attorney for the local representatives. A foreign company is mandated to appoint at least one individual who is a resident of Saudi Arabia. In addition, startups require a detailed business plan and initial capital proof.
Planning to set up a business in Saudi Arabia with mixed ownership? Professional services in Saudi Arabia, including law, consultation, engineering, etc., usually require a Saudi partner. The investment law states that not less than 25% ownership is required for the Saudi partner for trading activities in case of a mixed company. In the case of banking and financial considerations of a mixed company, financial transactions mandate the signature of a Saudi partner.
Compared to other nationalities, GCC (Gulf Cooperation Council) nationals have greater access and ease in setting up a business with commercial registration in Saudi Arabia. Saudi Arabia has developed into the ideal destination for a GCC company with its dynamic economy and favorable government initiatives. GCC nationals have no restrictions in setting up a business in any sector. In addition, GCC companies need not have a MISA license that demands more documentation work. Compared to the 20% income tax rate for foreign companies, GCC companies with GCC citizens with KSA permanent residents have a Zakat rate of 2.5%.
A Saudi Company is a business with 100% Saudi citizen ownership. Compared to foreign investors, Saudi locals have a relaxed regulatory environment. However, they need to follow some legal requirements. Primarily, you need to decide the entity type, ranging from sole proprietorship, joint stock company, & limited liability company. Each entity will have different regulatory requirements and liability implications.
Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam
GCC nationals can set up the following business enterprises in Saudi Arabia:
Once all the documentation processes are done, it takes from 2 weeks to 6 months to register a business in Saudi Arabia. The time scale depends on the company’s structure and complexity.
While setting up a foreign company in Saudi Arabia demands an MISA license, GCC companies and Saudi companies, on the other hand, do not require one.
