Setting Up a Business in Saudi Arabia: 2024 Comprehensive Guide

Establishing a business in Saudi Arabia (KSA) offers attractive prospects for international enterprises seeking foreign investment opportunities. The process requires a thorough understanding of the regulations and steps involved.

Types of Corporate Formations in Saudi Arabia

The main types of company formations permitted in Saudi Arabia are:

1. Joint liability companies
2. Limited partnership companies
3. Joint ventures
4. Joint stock companies
5. Limited liability companies (LLC)

Among these, the LLC, or Subsidiary Company, is the preferred choice for foreign investors due to its higher risk aversion, greater flexibility, and simpler registration and funding requirements.

Steps to Set Up a Business in Saudi Arabia

1. Obtain an Investment Licence from MISA: Apply for a foreign investment licence from the Ministry of Investment (MISA), previously known as SAGIA. The licence application process ensures your business aligns with KSA's regulations and development plans.

2. Register with the Ministry of Commerce: After receiving the MISA licence, register your company with the Ministry of Commerce (MoC) by formulating the Articles of Association (AoA) as per the Saudi Companies Law.

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3. Register with the Chamber of Commerce: Register your company with the Chamber of Commerce (CoC) to verify and legalize all corporate documents.

4. Comply with the Ministry of Labor: Register with the Ministry of Labor (MoL) to obtain work permits and visas for non-Saudi employees.

5. Register with GOSI: Register your company and employees with the General Organization for Social Insurance (GOSI) to pay social insurance contributions.

6. Register with ZATCA: Register with the Zakat, Tax & Customs Authority (ZATCA) to fulfill tax obligations, including withholding tax, VAT filing, and corporate income tax payments.

7. Obtain the General Manager Visa & Iqama: Secure a working visa and residency permit (Iqama) for the General Manager (GM) of your company.

8. Register with Government Portals: Register with Saudi government portals like Absher, Muqeem, and QIWA to manage company operations, including visa and Iqama processes.

9. Open a Corporate Bank Account: Complete the bank account opening process, which typically takes 2-4 weeks.

10. Obtain Residency Permits: Obtain residency permits for yourself and key personnel to ensure legal presence in Saudi Arabia.

Benefits of Setting Up a Business in Saudi Arabia

• Convenient and mostly online-based business setup process
• Secure social and commercial environment
• Premium social and infrastructural facilities
• Government incentives and tax benefits
• Top-tier commercial spaces
• Strategic global position for ease of transactions

Why Choose an LLC in Saudi Arabia (KSA)?

• Can be started with one shareholder and one director
• Limited liability protects personal assets
• Typical for joint venture companies
• Can engage in projects at private and public levels
• Allows sponsorship of multiple employees for residency

To learn more about starting a business in Saudi Arabia, contact Savory & Partners to speak with one of our experts.