Company Incorporation in Saudi Arabia
Company Incorporation in Saudi Arabia
Advantages of Setting Up Your Business in Saudi Arabia
A business-friendly environment
The New Companies Law in Saudi Arabia allows for a variety of business structures and offers benefits like increased financing access, especially for LLCs. Additionally, Monsha’at, the government agency for SMEs, provides support through incubation, accelerators, financial aid, and collaborative workspaces, fostering a favorable environment for small businesses.
Tax incentives
Saudi Arabia provides appealing tax benefits, with a 20% corporate income tax and no personal income taxes. The standard VAT rate is 15%, but exemptions apply to exports outside the GCC and services for non-GCC residents. These tax incentives, including low corporate taxes and no personal income tax, create a favorable business climate.
Expanding diversification
As part of Vision 2023, Saudi Arabia is diversifying its economy beyond oil, with non-oil sectors already contributing 58.9% to GDP. The country is boosting support for various industries, attracting foreign investment, and promoting SMEs and startups. Efforts focus on expanding sectors like tourism, transportation, and entertainment.
An ideal standard of living
Saudi Arabia is known as one of the most secure nations, ranking as the safest among G20 countries in 2020 with a very low crime rate. It offers a high quality of life, affordable living costs, and strong government support. Setting up a branch in the UAE is also an attractive option for GCC residents or foreigners seeking a new location or second residence.
Startup Expenses for Establishing a Business in Kingdom of Saudi Arabia
The cost to Start a Business in the Kingdom of Saudi Arabia would depend on several factors, and would differ if you are a GCC national or a foreign national.
It also depends on the business activities, number of shareholders, office space requirements, and other factors.
Joint Liability Company
Also known as a general partnership, a joint liability company is a straightforward entity in Saudi Arabia composed of two or more people equally liable for any of their firm's obligations
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Limited Partnership Company
This company type is one where there is at least one general partner who has an unlimited personal liability, and one limited partner whose liability is limited to their personal investment.
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Joint Stock Company
Joint stock companies are firms owned by their investors. A shareholder can buy or sell shares and own a percentage of the company that corresponds with the number of shares they have.
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Simple Joint Stock Compnay
A joint liability company, also known as a general partnership, is a simple entity in Saudi Arabia. It is formed by two or more individuals who are equally liable for the firm’s obligations.
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Limited Liability Company(LLC)
An LLC is a popular business structure for private companies, protecting owners' personal assets in legal cases. Owners’ liability is limited to their contribution to the company’s share capital.
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Electrical & Electronics
Electrical & Electronics businesses focus on the development, manufacturing, and sale of electrical equipment and electronic devices, covering products from household appliances to advanced technology components.
Click HereRequirement for Obtaining a Business License in Saudi Arabia
- Memorandum and Articles of Association of the Parent Company
- Duly Certified Financial Statement for the Previous Fiscal Year
- Business License/Trade License
- Certificate of Incorporation
- Board Resolution
- Power of Attorney
Steps for Setting Up Your Business in Saudi Arabia
➤ Determine Your Business Activities
Define your core products or services and target market, aligning them with your mission and vision, ensuring a strong focus on competitiveness and customer engagement
➤ Apply For The MISA Investment License
To apply for the MISA (Ministry of Investment and State-Owned Enterprises) investment license, consult the MISA website for application details and requirements, then submit your application along with the necessary documents to initiate the process.
➤ Submit Articles Of Association
To submit Articles of Association, draft a comprehensive document outlining your company’s internal rules and structure, and then file it with the appropriate government agency or authority in your jurisdiction as per legal requirements.
➤ Register Your Company Name
Register your company name with the relevant government agency, typically the Secretary of State or equivalent, by completing the required application and paying the associated fees to ensure legal protection and exclusive use of the name.
➤ Apply For Commercial Registration
To apply for commercial registration, contact your local business regulatory agency, complete the necessary forms, provide required documentation, and pay the registration fees, ensuring your business is legally authorized to operate in the specified jurisdiction.
➤ Register Your Company’s National Address
Register your company’s national address with the appropriate government authority or postal service, ensuring accurate and up-to-date location information for official communications and legal compliance.
➤ Register With The Government Departments
Register your business with relevant government departments, such as taxation, labor, and business licensing, by submitting the required forms, documentation, and fees to establish legal compliance and ensure smooth operations.
➤ Open Your Corporate Bank Account
To open a corporate bank account in Saudi Arabia, contact a local bank, provide the required business documents,including Articles of Association and a valid commercial registration certificate, and follow their specific account opening procedures. It’s advisable to conult the chosen bank for precise requirements and guidelines.
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