A Complete Guide About Opening a Company in KSA

Saudi Arabia, in recent years, has become a thriving business destination. An ideal GCC nation for investors and entrepreneurs wishing to conduct business in the Middle East. This is chiefly due to its abundant natural resources and recent measures geared at diversifying the economy to foreign investment and to shift gears from being an oil-rich exporter. If you are one such enthusiast, this guide is for you where we will discuss opening a company in KSA.

To start with the basics, first let’s highlight the benefits foreign investors can gain from opening a company in KSA. Whether you are a budding entrepreneur or a foreign investor from the Americas, UK, or Australia looking to have a passive income, this country provides you with all that potential. 

Ease of doing business in KSA for foreign investors

MISA, or the Ministry of Investment of Saudi Arabia, was formed to assist international investors with the application procedure for doing business in Saudi Arabia. And obtain crucial necessities like getting a license and work permits and handling other business matters all under one roof.

Benefits of Setting up a Company in KSA:

  • 100% foreign ownership of businesses and real estate in some industries
  • Reduced capital needs
  • No limitations on the return of capital
  • Foreign investors’ right to sponsor foreign workers
  • Tax breaks are available if the business is registered in a particular economic city in one of the less developed provinces of Saudi Arabia.
  • A 10-year tax exemption is available to foreign investors in agricultural and industrial businesses that have received government approval and at least 25% Saudi participation.
  • High oil prices are promoting economic expansion in the Kingdom and offering chances for investors thinking about setting up a business in Saudi Arabia.
  • It is simple to open corporate bank accounts anywhere in the world when a company has been registered in KSA. 

Steps to Open a Company in KSA:

1. Choose an appropriate business structure

Most foreign investors and entrepreneurs pick a Limited Liability Company to start with. An LLC can be easily registered and only needs one shareholder. 

2. Apply for the required investment license and business license based on your business activity type

Getting an investment license is crucial for investors not from the GCC region. And the business license will be based on the business activity you choose to conduct. This could be more than one license. 

3. Wisely pick a trade name

Make sure you are careful when picking a company name. As KSA is an Islamic country, the laws around religion and God’s names are strict. Don’t offend anyone/any religion with the name of your business.

Opening a Company in KSA

4. Prepare all required documents
  • MOA
  • AOA
  • Licenses 
  • Business plan
  • Company constitution
  • Passport copies of owner (director) and shareholders
  • Visa copies of owner (director) and shareholders
5. Get SAGIA license

This is a crucial step in opening a company in KSA. If you choose to hire business consultants, they can easily do this for you. Ensure you have your CR, tax registration, municipality license and bank account information to obtain this license. This license will allow your company to hire staff, issue company invoices and sign contacts – make sure you do it well. 

6. Register the company at the Chamber of Commerce and MERAS 

You are almost there! One of the final steps is registering your business at the Chamber of Commerce and MERAS, which are government entities that facilitate all business-related procedures. 

7. Opening a corporate bank account

Lastly, open a corporate account at your preferred choice of bank. After you have your Certificate of Registration, the account will be active. 

Legal Entities Allowed For Setup in Saudi Arabia:

According to the law, the following business categories are permitted in the Kingdom of Saudi Arabia. Depending on the legal and regulatory framework, these could alter. 

  • General Partnership 
  • Limited Partnership 
  • Partnership Limited by Shares
  • Limited Liability Company (LLC)
  • Cooperative Company
  • Variable Capital Company
  • Joint Stock Company (JSC)
  • Cooperative Company
  • Branch Office 

Business setup in KSA is a rewarding endeavor with many perks to come. However, to avail the benefits and make profits the company setup process has to be done correctly, effectively and in a timely fashion. In order to achieve this, we recommend hiring a business consultancy, as they are professionals in the industry and will offer you a smooth and hassle-free business setup in KSA. It is crucial to learn and understand company formation rules in KSA before venturing in, as this process can likely get tedious, without the right guidance.