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Business Setup in Saudi Arabia

For Business Setup in Saudi Arabia, GCC’s economic powerhouse opens its doors for foreign investors!

The Kingdom of Saudi Arabia has established itself as the largest economy in the GCC, a fact that attracts several investors to the country to set up their own businesses. However, it’s important to note that the stringent laws that govern the economic and investment sectors within the country are often difficult to comprehend. Who can own a business in the country? Are local sponsors necessary? What is the process of business setup in Saudi Arabia? Business Link can assist eager entrepreneurs wanting to invest in the financial hub of the GCC with such questions and more.

With new initiatives such as Vision 2030, business is set to boom even further in Saudi Arabia, and if you’ve been eyeing a foreign investment opportunity, Saudi Arabia is the place to setup a business or branch. Get in touch to see how we can guide you!

Following are the different types of business structures:

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branch company setup in KSA
business setup in saudi arabia
business setup in saudi arabia

Branch of a Foreign Company in Saudi Arabia

A branch office or branch company is another establishment that serves as an extension of the existing company. The branch can be 100% owned by the foreign investor, despite it being physically separated. To establish a branch office in Saudi Arabia, the process is relatively easy as it does not require an Article of Association. Additionally, to open a branch in KSA, you should have an existing company in another GCC country.

How to set up a Branch of a Foreign Company in Saudi Arabia

Within Saudi Arabia, a branch is not an entity that is incorporated locally; the parent company or main company takes full liability for all activities that the branch is involved in. Keep in mind, all documents are required to be translated into Arabic, after which it may take 3-4 months for the Ministry of Commerce and Industry to issue a commercial license for your branch. All in all, the process to set up a branch could take up to 4-6 months.

Following are some steps to set up a branch in Saudi Arabia:

  1. Branch license is applied for at the SAGIA/MISA, and payments for the same are made.
  2. Booking of trade name and business activity.
  3. Activation of the chamber of commerce portal.
  4. Documents are sent for attestation to the MoFA, Saudi Embassy, and Chamber of Commerce in Saudi Arabia.
  5. Branch office is registered with General Organization for Social Insurance (GOSI), Zakat (Tax Authority), and the Ministry of Human Resources and Social Development (MOHRS).
  6. Assistance in opening corporate bank account (Riyadh Bank).
  7. Register for a virtual office to act as national office address.
  8. Registration of manager at the Chamber of Commerce.

Benefits of Business Setup in Saudi Arabia

  • Possibly the most massive benefit for those wanting to open a branch is that KSA allows for 100% foreign ownership. 
  • You can easily establish a branch without having to look for a local partner.
SUBSIDIARY trade license KSA
SUBSIDIARY trade license KSA
SUBSIDIARY trade license KSA

Subsidiary or LLC Company in Saudi Arabia

A subsidiary is an entity where the controlling interest is either totally or partially held by another company, often known as the holding company. A subsidiary, unlike a branch office does not report to the parent organization. This benefits the company for the purposes of taxation, regulation and liability. Its obligations are also typically its own and are not usually a liability of the parent company.

How to set up a Subsidiary or LLC Company in Saudi Arabia

It’s crucial you conduct your due research before you decide to set up a subsidiary in Saudi Arabia. While the process or total time taken isn’t much, incomplete or incorrect documentation could lead to unforeseen delays in your business setup in Saudi Arabia process. By working with Business Link, you can be assured that all documents and applications are sent in the right manner to avoid any issues from coming up.

Following are some steps to set up a subsidiary in Saudi Arabia:

  1. Apply for a SAGIA license (Saudi Arabian General Investment Authority).
  2. Depending on the nature of your business activities, there may be a need to obtain more licenses from concerned authorities to legally conduct business.
  3. Drafting an Article of Association is also necessary.
  4. Activation of Chamber of Commerce
  5. Assistance with corporate bank account opening (Riyadh Bank).
  6. Register with the Zakat and Tax authorities, and the Chamber of Commerce.

Benefits of setting up a Subsidiary or LLC Company in Saudi Arabia

  • It can operate as a Limited Liability or a Joint Stock Company; because of which it’ll be treated like a domestic or local entity.
  • The subsidiary can legally perform all the same requirements as its holding company and if required, may be able to perform other relevant activities that fall under the same industry.
  • The subsidiary can also own various types of assets in Saudi Arabia.

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GCC company setup KSA
GCC company setup KSA
GCC company setup KSA

GCC National Owned Investment in Saudi Arabia

A GCC National Owned Investment is in the form of a company that is a special investment opportunity offered only to nationals of other GCC countries. This company type presents GCC nationals with the same benefits that are offered to nationals of KSA – meaning you can skip out on having to wait for approvals and licenses, all in all, cutting the processing time in half.

How to set up a GCC Company in Saudi Arabia

As a GCC national looking for Business Setup in Saudi Arabia, you can be rest assured the process won’t be too lengthy. However, there are still documents required and procedures to undergo to complete your company formation in the KSA as a GCC national.

Following are some steps you need to sort to set up a GCC Company in Saudi Arabia:

  1. Apply for a Non-employment Certificate, issued by the Federal Authorities for Government Human Resources.
  2. Submit at least five choices for the company name along with company activities.
  3. Submit Police Clearance Certificate
  4. The GCC National is required to travel to Saudi Arabia in order to activate the government portal.
  5. Once your company formation is in place, you’re required to get the UID (Unified Identification Number) number for your business.

Benefits of setting up a GCC Company in Saudi Arabia

  • Process of establishing a company as a GCC National is relatively easier and quicker as it’s the same as for a KSA National.
  • GCC Company types do not require a SAGIA license, only a license from MOCI in required.

Dual Ownership in Saudi Arabia

Have you ever considered setting up a company in the UAE, and then branching out to the KSA? If so, we can support you with that. Business Link is proud to be among the first business consultancies to be providing a service of this sort. A unique opportunity allowing for maximum recognition and an incredible amount of revenue – the dual ownership opportunity is one that’s helped several of our clients reach greater heights.

How to set up a Dual Ownership Company in Saudi Arabia:

Since this type involves company formation in UAE and a branch set up in KSA, it surely has a slightly lengthier process, given the approvals needed from the two countries. However, with Business Link taking over on your behalf – you have very little to worry about.

Here are some of the steps you need sort to set up a company in UAE and a branch in KSA:

  1. Purchasing an existing company in the UAE and registering a revised trade name for the new business in UAE.

  2. Drafting company resolution to establish a branch in KSA, possible only after a PoA is submitted.

  3. Issuing an audit report to establish a branch in KSA.

  4. Document attestation in the Saudi Embassy and MoFA in UAE.

  5. Registration of all documents of the parent company in the Saudi Embassy and MoFA.

  6. Courier all documents to Business Link KSA, and attest them at the Saudi Embassy and MoFA in KSA.

  7. Registration of the branch office in KSA.

  8. Application and fees payment made for the SAGIA License.

  9. Activate the Chamber of Commerce portal, after completing payments

  10. Registering the company in the Ministry of Human Resource and Social Development (MOHRS), ZAKAT (Tax authority) and General Organization for Social Insurance (GOSI).

  11. Registration of company local office address and corporate bank account (Riyadh Bank).

  12. Provide company stamp and company mobile number. 

Perks of business setup in Saudi Arabia for Foreign Investors

  • Businesses involved in service-oriented activities can own 100% of their company in UAE and branch in KSA.
  • Opportunity to do business in two of the largest economies in the region.
  • Both UAE and KSA have business-friendly zones/cities which are suitable for start-ups and bigger corporations, and that provide excellent amenities depending on your needs.

Popular business activities in Saudi Arabia

Here are some of the business activities that have been flourishing over the years and have been benefiting those offering them massively!