Company Registration in Saudi Arabia

Establishing a new venture on foreign soil is not only rewarding but also challenging. You have to soak up numerous obstacles before you set up a fully operational unit.

Compliances, industry-specific regulations, tax structure, and incorporation legalities are some fundamental barriers on the road to a successful business journey. If you intend to establish a venture in Saudi Arabia, be ready to experience unexpected obstacles along the way. This write-up shall uncover how to apply for company registration in Saudi Arabia and the legalities that apply to your dream venture.

Why Choose Saudi Arabia for Business Endeavors?

Saudi Arabia is one of the wealthiest Gulf nations with limitless natural resources like oil and gas. The following reasons better explain why Saudi Arabia holds immense potential for entrepreneurs worldwide.

Economic Diversification

With the launch of the ambitious plan- Vision 2030, Saudi Arabia is ready to spark the growth of other sectors such as technology, entertainment, tourism, and renewable energy. The country is eyeing to reduce its dependency on hydrocarbon revenues.

Strategic Location

Nested at the crossroads of Asia, Africa, and Europe, Saudi Arabia is a strategic avenue for businesses seeking opportunities in the Middle East and North Africa (MENA) region. It fosters a well-connected transportation infrastructure and a viable trading environment.

Investor-Friendly Policies

The Saudi government has strengthened its corporate landscape by taking several initiatives, such as introducing investor-friendly policies, reducing regulations, and streamlining the incorporation process. These initiatives have helped attract significant FDI from different nations.

Large Consumer Base

Saudi Arabia boasts a sizeable population and thus has a significant customer base. It offers a massive opportunity for businesses dealing with different products and services.

Stable Political Environment

Saudi Arabia fosters a robust governance and formidable financial infrastructure. This ensures peace of mind for overseas entrepreneurs and ooze confidence among investors.

The recent economic reforms have poised the country among the top business destinations.

Types of Business Structures for Company Registration in Saudi Arabia

The following business structures are part of Saudi Arabia’s corporate landscape. Each structure adheres to distinct compliances and establishment legalities. Understanding each is vital before you rush to Company Registration in Saudi Arabia.

Limited Liability Company (LLC):

A Limited Liability Company (LLC) is the most preferable legal structure in the corporate realm. It offers the ease of limited liability, ensuring comprehensive legal fencing of the member’s assets. LLC fosters transparency and flexibility, making it a thriving business model. Also, some tax benefits are available to LLCs, which allow owners to reap increased profit margins.

Branch of a Foreign Company:

A Branch of a Foreign Company in Saudi Arabia is merely an extensive arm of its foreign parent company. It does not possess any individual legal identity, which isolates it from making any corporate decision. Further, any loss incurred by such an entity shall be fulfilled by the parent company. A Branch office can help augment the business footprint and ease the operation.

Joint Stock Company (JSC):

A Joint Stock Company (JSC) is similar to a public limited company as it holds the power of public share trading. Its flexible foundation allows shareholders to keep their income intact and contribute only to the extent of their shareholding. It is ideally suitable for bigger corporations intending to scale their operation or seeking additional funds from investors. JSC can raise funds via share issuance and disseminate dividends among its shareholders.

General Partnership:

A General Partnership, as the name suggests, is a partnership-based business model helmed by two or more individuals. The concept of limited liability does not work here as extensively as one might think. Because of this limitation, the members end up paying for losses incurred by the entity. However, it offers flexibility on how much profit or loss members agree to pay for mutual betterment.

Technical and Scientific Services Office:

A Technical and Scientific Services Office primarily deals with technical, scientific, or professional services. Foreign companies set up these offices to render specialized expertise in the marketplace. Legally, these entities cannot perform commercial activities of any form.

The Establishment:

"The Establishment" is a simple business model that adheres to minimal compliances and unlimited liability. It is best suited to individuals having a smaller business footprint or moderate operation.

Regional Headquarters (RHQ):

A Regional Headquarters (RHQ) is more extensive in terms of what chores it can handle, unlike BOs. Although its parent company runs it, it can perform several tasks, such as making strategic decisions, overseeing regional subsidiaries, and streamlining business operations.

Documentation

Mandatory Paper

What are the benefits of Trademark Renewal?

The benefits of Trademark renewal are as follows:

• It helps in the protection of the Trademark associated with the business


• In case of Trademark infringement, it helps in acting against the infringement.


• It protects the brand value of the company from other third parties.


• In trademark infringement, it helps to obtain remedies for the same.

Mandatory Paperwork: Company Registration in Saudi Arabia

The applicant seeking company registration in Saudi Arabia must arrange the following paperwork without fail:

Memorandum of Association (MoA) and Articles of Association (AoA):

These documents pen down the company’s structure, goals, and norms. Their drafting and notarization shall be done professionally.

Commercial Registration (CR) Application:

The Ministry of Commerce and Investment (MOCI) provides this application form for legalizing a company’s commercial undertakings.

Copy of Valid Passport and Saudi Visa:

Copies of passports and visas concerning shareholders/founding members/partners.

Proof of Address

Documents verifying the physical address of the business location in Saudi Arabia. This could include utility bills or a tenancy agreement.

Bank Reference Letter:

A letter from the bank reflecting the company’s credibility and financial standing.

Foreign Company Documents (for branches of foreign companies):

Documents such as the Incorporation certificate, MoA, AoA, and a Board Resolution boasting the members’ consent for establishing the venture.

Power of Attorney (for foreign companies):

A legal document conferring authority to the local agent to address incorporation formalities on behalf of the foreign company.

Share Capital Certificate:

A Share capital certificate is a legal document validating that the minimum required share capital has been deposited in the designated bank. 

Tax Identification Number (TIN) Application:

Application for securing a TIN, which is vital for taxation purposes.

Labor Office Application (For hiring employees):

Labor Office application for getting employees on board.

Zakat and Income Tax Registration (For applicable businesses):

Registration documents concerning Zakat and the Income Tax Department are essential to stay tax compliant.

Company registration in Saudi Arabia: 5-Steps Guide

The following is a detailed guide concerning company registration in Saudi Arabia.  It is advisable to remain vigilant with your paperwork before you initiate incorporation endeavors.

Step 1. Preparation and Documentation:

In this initial phase, arrange the mandatory paperwork and delve into decision-making concerning the entity’s constitution. Pen down your core business undertaking, select an apt business model, reserve a legitimate business name, and hire a local agent if you apply as a foreigner. 

Step 2. Legal Documentation

This stage involves the drafting and sharing mandatory paperwork with the authority concerned. Draft the charter document like AoA boasting the company’s norms and shareholder’s rights. Add the required share capital in your bank as a part of the mandatory obligation. Verify these documents from the Commerce and Investment (MOCI) and await approval.

Step 3. Government Approvals:

Secure mandatory legal approvals from government authorities. If you apply as an overseas applicant, approach the Saudi Arabian General Investment Authority (SAGIA) to register your entity. Secure the Commercial Registration certificate from MOCI, register your workforce in the social insurance system helmed by the General Organization for Social Insurance (GOSI), and obtain the tax identification number.

Step 4. Local Compliance and Operations:

This stage involves adhering to local norms and initiating business chores. Acquire any industry-specific approval (if applicable), open a bank account, and register with a local body to legalize your existence. If you plan to bring some workforce on board, ensure compliance with labor regulations, and streamline marketing chores and other vital functions.

Step 5. Ongoing Compliance and Growth:

Once your company is up and running, pay unwavering attention to ongoing compliance and market. This includes ensuring adherence to tax laws, growing your business, and adjusting to ever-changing market demand. Be vigilant with changing norms and seek professional support as and when required.

Get on board with Adviso to fast-track your business journey

Adviso has been helping new and old enterprises go global for years. Our unprecedented support and expertise in licensing and overseas regulations have earned us solid recognition that resonates firmly among entrepreneurs. With our fine-tuned assistance, you can expect seamless paperwork, hassle-free processing, and prompt disbursement of licenses or mandatory approvals.  

Since our inception, we have served endless clients and companies with global ambition. We have helped them go global with zero hassles and extraordinary support, helping them overcome barriers with audacity and clarity. Connect with us if you want to get started with your foreign venture legitimately.