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First things first, when planning for a business venture anywhere in the world, the foremost and most critical step is ruminating on the location and learning if your business will grow and flourish in that region. From assessing the best business strategies to the income you might likely generate, to the rules and regulations for the respective country, and permission for the foreigners doing business, all these are important information that one must consider thoroughly. That said, Saudi Arabia is among the world’s fastest-growing economies. If you are envisioning a business venture here in Saudi Arabia, you’re on the right track.
The ways to form a company in Saudi Arabia may seem a little complicated, but with the help of our team of company formation experts, any foreigner can start a business here if all of the conditions are completed. The sorts of businesses that can be established here are varied, ranging from limited liability companies (accessible to natural persons) to branch offices and representative offices (both business forms can be set up by other companies interested in investing in Saudi Arabia).
The list doesn’t end there. With the implementation of Vision2030, the country currently offers significant opportunities for company growth and expansion in the tourist, hotel and hospitality, oil and gas, and other sectors. The Kingdom has also seen a rapid Digital Transformation in recent years, with the adoption and implementation of cutting-edge telecommunication systems and ICT technologies, making services more accessible. Hence, if you are interested in setting up a 100% owned business in the Kingdom of Saudi Arabia, you will have all the help you need in this venture.
What are the steps? You might wonder. But fret not, we will make it sound so simple, that you won’t be able to resist yourself. In this blog, we have mentioned all the necessary steps involved while setting up a business in the country.
But first, know that to ensure that any foreign business owners investing in Saudi Arabia are eligible and capable of establishing a successful business, they must have:
- A business that has been operating for at least one year outside of Saudi Arabia.
- An audited financial statement of the same duration for your company.
However, there might be some exceptions for investors that might fall int the entrepreneur category.
The steps involved to set up business in Saudi Arabia
Following which the main steps mentioned here below will have to be followed before you can set up your company in Saudi Arabia
- Obtaining an investment license from the Ministry of Investment of Saudi Arabia (MISA).
- Notarizing the articles of association.
- Opening a bank account to make the initial deposit.
- Registering with the Customs department.
- Registering with the Ministry of Labor.
- Register with the Mudad Business Portal to make administrative and financial procedures easier for your company.
- Reserve the company name and submit AOA (Articles of Association) and other mandatory documents.
- Making payment for company registration.
- Registering with the General Organization for Social Insurance (GOSI).
- Registering with the Chamber of Commerce.
- Obtaining a municipality license.
- Registering with the electronic Qiwa HR portal.
- Registration with WPS (Wage Protection System) for companies with more than 10 employees.
- Registration with the ministry of interior.
All documents needed for submission must be translated into the Arabic language for filing with the regulatory bodies. For more clarification, we have explained this in detail in the next section.
Know the steps in more detail
One of the first decisions you must make before starting an E-commerce business is the name of the organization. Reservations can be made on the Saudi Arabian Ministry of Commerce and Industry’s website which will be valid for two months. The Saudi Arabian government’s naming rules will be applied before you can pick a company name. Once you have finalized the name and selected the type of company, you can proceed with the company formation. In the next few paragraphs, we have explained some of the most important steps involved during the company formation process.
Foreign capital investment: The Investment Law mandates that any Saudi Arabian company with foreign owners get a foreign capital investment license.With the establishment of the Saudi Arabian General Investment Authority (SAGIA), renamed the Ministry of Investment of Saudi Arabia (MISA) by Royal Decree in February 2020, the Saudi government announced a foreign investment law in 2000 that provided for a streamlined approach to market entry and foreign investment into the Kingdom.
The MISA Authority must first issue a foreign investment license. This permits lawful investment in Saudi Arabia. The license usually takes 15-20 days to arrive. The license costs SAR12,000 at the time of registration after which one has to pay SAR60000 each year. A three-month Temporary Investment License is issued before the permanent license is given by the authority.
A commercial registration certificate from the Ministry of Commerce and Investment is also required to purchase or create a firm to operate a foreign branch.
Submission of Articles of Association: The Articles of Association must be submitted to the Ministry of Commerce and Investment. The document must be signed in front of a notary public once it has been accepted to register for a CR certificate. The name and articles of incorporation must then be published in the newspaper.
At the time of notarization, the following documents would be required:
- True copies of the Articles of Association
- Copy of certificate of incorporation
- Copy of MISA investment license
- Copy of identification proofs of witnesses
- Directorate of the company duly signed by the representatives
Document Approval: The next step involves submitting the documents for verification at the unified center for approval (UC). For instance:
- Summary of the Articles of Association
- MISA investment license
- Proofs of Identification
- Fully Filled Application form
- Confirmation of the reservation of company name
Listing your company in the Commercial Registry: It’s time now to register your business and to accomplish that the following documents would be required by the Ministry of Commerce and Industry:
- Two copies of the articles of association notarized in the notary
- A certification by the bank stating the payment of capital made in full
- MISA investment license (one copy)
- A copy of the leasing agreement of your office
- A shareholder resolution confirming the nomination of their board of directors
Finding the perfect location: Once all of the compliance requirements have been met and documentation has been completed, you will need to find a location to begin operations. Because to complete registration in the Commercial Registry, you must first establish a physical place of business. Also, the location is very important if you want to run your business very smoothly.
Opening an account in a bank: A bank account is required for every business operation and is crucial you choose the right bank. Hence, match your business needs to the various policies and advantages offered by the various bank before deciding.
Tax registration: Registration with the Department of Zakat and Income Tax (DZIT) is required for all Saudi firms and international subsidiaries. Zakat is a religious wealth tax that is imposed throughout the kingdom. Although the calculation of this tax can be difficult at times, it is generally imposed at 20 percent of a company’s total capital resources. This procedure could take up to three days.
How Thinkdirect BPO can help in setting up 100% business ownership in Saudi Arabia?
Setting up a business in an unfamiliar environment that too in another country can be quite cumbersome. Understanding and trying to find out all of the legal requirements can be time-consuming as well. Using the services of an expert will assist you in navigating the process comfortably. Thinkdirect BPO is a well-known name in the industry for delivering great results with a company structure that meets your specific needs and can save you a lot of money and time. From the start, a team of professional project managers will be assigned to you to ensure that everything is taken care of, from business setup to working with you through the VISA and immigration processes and finding dynamic coworkers for your company. All of the critical details will be handled by us so that you can concentrate on your business objectives.
That said, if you’re interested in learning more about how to continue to set up business in Saudi Arabia, you can contact us.
Robert Schuller once said, “If you listen to your fears, you will die never knowing what a great person you might have been.” It’s time to do something great, it’s time to go from small to big.
