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As an entrepreneur, one of the main concerns you’re likely to have when considering setup your company in Saudi Arabia is the effect that your citizenship may have on your legal rights as an owner of said business. Can a foreigner own a business in Saudi Arabia? The answer to that question is yes and no, depending on the type of business you are considering starting. Read on to find out how to prepare yourself for Saudi Arabia business setup as a foreigner.
Steps To Setup 100% Foreign Owned Company In Saudi Arabia
The Saudi Arabia government has implemented a number of foreign investment incentives to attract foreign investment and create partnership opportunities with Saudi companies. The government has also opened up many industries to foreign investment and provided for 100% foreign ownership of companies in certain sectors. Therefore, here are a few steps by which you can also easily acquire foreign business ownership in Saudi Arabia:
Step 1: Establish residency
While you may be able to open a business as a foreigner, the process can be challenging. In order to get residency and open up your company in Saudi Arabia, you must first apply for one of several different types of visas. Once you have the visa, you can apply for the Iqama residency permit, which will allow you to stay indefinitely. This permit is issued by the Ministry of Interior and has strict requirements that need to be met before it is issued.
Step 2: Choose your field
Once you have chosen your field, whether it is plumbing or event planning, for example, you will need to decide on the type of business structure. In Saudi Arabia, you can choose from sole proprietorship to Limited Liability Company (LLC) or Public Limited Company (PLC). Sole proprietorships are the most common choice among entrepreneurs because they are easy and cheap to start. But if you want more protection for your personal assets, then you can set up an LLC or PLC.
Step 3: Get Insurance
Insurance is one of the most important parts of running a business. This coverage protects you and your company from lawsuits, natural disasters, and other unexpected events. Before starting up your company, find out what type of insurance your state requires and if any other options are available. You should also ask about cancellation policies and if there are exclusions for certain types of businesses.
Step 4: Register your company
You’ll have to complete paperwork to register your business at the Ministry of Commerce and sign up for an account with the Central Depository, which stores shareholder information. Be sure to get this done as quickly as possible so you can start trading! If you are going to be importing anything from outside the country, be prepared for taxes, duties, and other costs that may apply. You’ll also need approval from the government before importing any goods or services from outside Saudi Arabia.
Step 5: Set up a bank account and office
Once you have received the approval for your company name, you will need to set up an account with the Commercial Bank of Jeddah. Approved names will be listed on the National Commercial Register (NCR). Once your company name is approved, and you decide which bank to use, they will provide you with an introduction letter that states that your company has been approved by them.
Step 6: Determine your corporate structure
Generally, the corporate structure is selected based on what type of entity it will be. For example, if you are planning to operate as a sole proprietorship or partnership, then it would most likely be an unincorporated entity. If the business has multiple partners, then it may be considered a partnership under Saudi law. If you plan to incorporate your business and offer investors shares, you may want to consider setting up a limited liability company (LLC). If your business is located outside of Saudi Arabia and needs legal representation in-country for any reason (e.g., financing), this should also be considered when choosing a corporate structure and selecting agents for your entity’s affairs abroad.
Step 7: Hire staff
You will need to hire staff to help you run your business. In addition to hiring employees, you may want to hire freelancers or contract workers for specific tasks. You should try and find someone who shares your vision and values and is qualified to do the job at hand. Make sure that they have excellent English skills, as communication with clients is crucial. If you’re hiring foreigners from overseas, be aware of their visa status and ensure they are legally able to work in Saudi Arabia.
Conclusion
In conclusion, foreigners can indeed own businesses in Saudi Arabia. However, there are some stipulations to be aware of and considerations that need to be taken into account. As with any country, the rules and regulations are subject to change without notice. We recommend you consult with your corporate immigration advisory services in Saudi Arabia before making any decisions on how best to proceed.
