Saudi Arabia has become a convergence point for businesses in the Middle East, determined by its geographical position and financial integrity. With the Kingdom’s Vision 2030 activity planning to broaden its dependence on oil, Foreign Direct Investment (FDI) has witnessed a colossal surge. In this article, we will investigate the fundamental ways in which you can establish a company in Saudi Arabia.
Why Establish a Business in Saudi Arabia?
Setting up a business in Saudi Arabia offers significant benefits as it boasts the biggest economy in the Middle East and is the 16th largest worldwide. Recent financial changes have supported business enrollments and drawn in foreign direct investment, making it an ideal spot for business development and expansion. The country’s essential spotlight on broadening, development, and backing for global business further upgrades its allure as a business hub.
Benefits of Setting up a business in Saudi Arabia
- In Q1 2024, Saudi Arabia saw a 5.6% increase in net FDI, reaching 9.5 billion riyals ($2.53 billion)
- The Saudi Ministry of Commerce reported over 120,000 new companies in Q2 2024, marking a 78% increase compared to last time. This growth is reflective of the thriving private sector and favorable business climate.
- Positioned at the crossroads of Europe, Asia, and Africa, Saudi Arabia provides unequaled access to over 50 million consumers within the Gulf Cooperation Council (GCC) region.
- The Kingdom has made significant strides in perfecting its economy, ranking 4th among G20 countries for business legislation and structure.
Steps to Register Your Company in Saudi Arabia Under MISA
Setting up a business in Saudi Arabia involves several steps. While navigating this process can be complex, partnering with professional business setup companies like CBD Corporate Services can streamline your experience.
1. Determine Your Business Structure
Choosing proper business structure is pivotal. The most common types include:
- Limited Liability Company (LLC): This is the favored structure for foreign investors due to limited liability protection and flexibility in operation.
- Joint Stock Company (JSC): Suitable for larger enterprises with over 50 shareholders.
- Branch Office: Allows foreign companies to operate directly without establishing a separate reality.
2. Gain an Investment Licence
Foreign investors must secure an investment licence from the Ministry of Investment in Saudi Arabia (MISA). This licence is essential for further establishing your business and generally takes 2- 4 weeks.
3. Register Your Company
After you have a licence, the next step is to register your company with the Ministry of Commerce (MoC). This involves preparing Articles of Association (AoA) according to Saudi Companies Law and submitting the necessary attestation.
4. Open a Corporate Bank Account
Establishing a commercial bank account is vital for managing your business finances. This process requires compliance with Know Your Client (KYC) regulations.
5. Register with Zakat, Tax & Customs Authority (ZATCA)
All businesses must register with ZATCA too. This includes furnishing details such as name, address, and legal attestation.
6. Get Necessary Licences
Depending on your business conditions, you may renew licences from applicable authorities. For illustration
- Commercial Licence: This is needed for general trading.
- Specialised Licences: Necessary for specific sectors like media, defence and healthcare.
7. Register Your Public Address
Get a physical address in Saudi Arabia. Registration must have a physical office address or your company’s address with Saudi Post (SPL).
8. Recruit Staff
Hiring local staff is essential due to Saudisation laws. Familiarise yourself with these regulations to avoid penalties.
Also Read: Comprehensive Guide to Company Formation in Qatar
How CBD Can Assist
Partnering with business setup companies like CBD Corporate Services can help navigate the company’s formation process and ensure compliance with the regulations. By taking advantage of Saudi Arabia’s favourable investment climate and robust, profitable growth, entrepreneurs can place themselves for success in one of the world’s most promising economies. Contact us on enquiries@cbdcorporateservices.com or call/WhatsApp +971 56 218 4695 to get a complimentary business consultation.
