Foreigners are allowed to establish companies with 100% foreign ownership in most sectors, except for certain activities that require a Saudi partner.
From Planning to Operations, We Simplify Your Path to Success
At Arab Consult House, we provide comprehensive support to help you set up and grow your business in Saudi Arabia. Whether you’re a startup or an established company, we cover all your needs
Setup for Foreigners in Saudi Arabia
Setting up a business in Saudi Arabia offers a wealth of opportunities for foreign investors. As one of the largest markets in the Middle East, Saudi Arabia provides a favorable investment environment with numerous prospects across various sectors. The Saudi government has streamlined the entry process for foreign companies, requiring only two primary documents to obtain a commercial registration:
- Commercial Registration from the company’s home country.
- Financial Statement for the last fiscal year.
Key Requirements and Steps
for Foreign Business Establishment in Saudi Arabia
Selecting the Right Legal Entity for Your Business in Saudi Arabia
- Limited Liability Company (LLC): A company where members have limited liability up to their contributions.
- Single Member LLC: An LLC owned by a single individual.
- Joint Stock Company: A company with capital divided into shares, where shareholders are liable only to the extent of their shares.
- Branch of a Foreign Company: An extension of a company established in another country, operating in Saudi Arabia.
- Professional Company: A firm providing specialized professional services, such as engineering or legal consulting.
Obtaining an Investment License from the Ministry of Investment (MISA)
To establish a presence in Saudi Arabia, foreign entities must first obtain an investment license from the Ministry of Investment (MISA).
This crucial license permits foreign companies to operate commercially within the Kingdom, ensuring compliance with local regulations and eligibility for foreign ownership.
Acquiring this license is the gateway to starting your business journey in Saudi Arabia, enabling you to engage in various business activities under the protection of Saudi law.
Official Company Registration with the Ministry of Commerce
Once the investment license is obtained, foreign businesses must proceed with the official registration of their company with the Saudi Ministry of Commerce.
This step involves drafting the Articles of Association, which outline the company’s internal rules and structure. These documents must then be notarized by a public notary to meet all legal requirements.
Successful registration provides your business with the legal standing to operate within Saudi Arabia, ensuring compliance with corporate governance standards.
Establish Your Financial Operations with a Local Bank Account
Opening a corporate bank account is a mandatory step for foreign businesses setting up in Saudi Arabia. This account is necessary for depositing your company’s initial capital and handling all financial transactions.
It facilitates smooth business operations and ensures compliance with Saudi financial regulations. Choosing a reliable local bank will help manage your finances efficiently and provide access to essential banking services tailored to support foreign businesses.
Obtain Required Additional Licenses for Your Business Activities
Certain business activities in Saudi Arabia require additional licensing from specific authorities. For example, companies might need approval from the General Authority of Zakat and Tax (ZATCA) for tax-related activities or the Capital Market Authority for financial market operations.
These licenses ensure that your business complies with industry-specific regulations and operates legally within the Saudi market. It is essential to identify and secure these licenses early to avoid any operational delays.
Stay Compliant with Local Laws and Regulations
Compliance with local laws and regulations is vital for foreign businesses operating in Saudi Arabia. This includes adhering to labor laws, environmental standards, safety protocols, and security measures.
Ensuring compliance not only prevents legal issues but also builds a reputable business presence in the Saudi market. Staying updated with regulatory changes and maintaining high compliance standards is essential for sustainable operations and long-term success in the Kingdom.
Start Your Business Journey with Expert Legal Guidance
- Legal Consultation: Provide expert legal advice and address all client inquiries throughout the setup process.
- Determine Legal Entity and Business Activity: Ensure the correct legal entity type and business activity based on client requirements.
- Draft Legal Documents: Prepare essential legal documents, including Powers of Attorney (PoA) and shareholders/board of directors’ resolutions (BPR).
- Document Translation and Legalization: Translate parent company documents into Arabic and verify/legalize them through the Saudi Ministry of Foreign Affairs and the Ministry of Justice.
Legally Establish Your Business with MISA Licensing and Registration
- Obtain Foreign Investment License: Secure the investment license from the Ministry of Investment (MISA).
- Reserve Trade Name: Reserve the company’s trade name with the Ministry of Commerce.
- Register Commercial Registration (CR) and Company Bylaws: Complete the registration of the company’s CR and bylaws with the appropriate authorities.
Ensure Full Operational Readiness with Essential Registrations
- Chamber of Commerce (CoC) Registration: Register the company with the local Chamber of Commerce.
- Register National Address (Wasel): Ensure the company’s national address is registered with the Wasel service.
- Ministry of Human Resource and Social Development (HRSD) Registration: File the company’s information with HRSD for compliance with labor laws.
- Activate General Organization for Social Insurance (GOSI) Account: Register and activate the company’s account with GOSI to manage employee benefits.
- Register with Zakat, Tax, and Customs Authority (ZATCA): Obtain the necessary registrations for tax compliance, including Zakat and VAT.
- Portal Registrations:
- QIWA Portal: Manage employee contracts and work authorizations.
- Mudad Portal: Handle payroll and wage protection system requirements.
- Muqeem Portal: Monitor and manage employee residency status and permits.
- Open and Activate Bank Account: Establish and activate a corporate bank account with a local Saudi bank for financial transactions.