Setting up a Business in KSA

KSA’s economy, the largest in the Middle East, is undergoing significant transformation as part of its $3 trillion investment, Vision 2030. KSA has become a global financial leader among the G20 – with a large market, skilled workforce, and unwavering support from its government, the Kingdom is a growing commercial hub for unparalleled opportunity and innovation.

This article provides a comprehensive guide to setting up a business in the KSA, including the available legal entities, setup process, and more.

KSA enables entrepreneurs access to a wide range of incorporated legal entities. In general, here are the available legal entities below:

1. General Partnership

KSA defines general partnerships as an incorporated business owned by at least 2 natural or legal persons. Partners in a general partnership jointly incur unlimited liability.

2. Limited Partnership

Limited partnerships in KSA are owned by two groups of either natural or legal persons as partners. One group jointly incurs unlimited liability while the other incurs limited liability.

3. Joint-Stock Company (JSC)

JSCs in KSA are owned by at least 1 shareholder, who is either a natural or legal person. Its capital is divided into tradable shares and must be a minimum of SAR 500,000 to set up. Shareholders in a JSC incur limited liability.

4. Simplified Joint-Stock Company (SJSC)

Like JSCs, SJSCs in KSA are also owned by at least 1 shareholder as a natural or legal person. Its capital is divided into tradable shares, and shareholders incur limited liability. The difference is that there is no required minimum and provides a simpler setup and management process.

5. Limited Liability Company (LLC)

Like JSCs, LLCs in KSA are owned by at least 1 natural or legal person where each shareholder incurs limited liability. Additionally, its assets and liabilities are deemed separate to its shareholders.

The procedure of setting up your business in the KSA may vary depending on your chosen legal entity type. Nonetheless, this general step-by-step guide summarises the key steps:

1. Obtain MISA license

Apply for your MISA (Ministry of Investment Saudi Arabia) online via the MISA website and submit the necessary documentation specific to your legal entity type, ensuring each is accurately provided. Once approved, pay the fees accordingly.

2. Prepare AoA and MoA

Document the AoA (Articles of Incorporation) and MoA (Memorandum of Association) to detail the basic outline of the company, such as the name and purpose, shareholder details, etc. Ensure it is notarised accordingly.

3. Acquire CR

Using the MISA website, acquire the CR (Commercial Registration) by submitting an application with the required documentation depending on your chosen legal entity type. Once acquired, it is subject to renewal once per year.

4. Open Files

Obtain files of the ZATCA (General Authority of Zakat and Tax), HRSD (Ministry of Human Resources and Social Development), and GOSI (General Organisation for Social Insurance). Gain an understanding of the files to ensure your business is compliant with taxation laws, labour regulations, and gain access to insurance.

5. Issue General Director’s Visa

As a final step, appoint a general director in the form of a letter, as well as proof of the general director’s identity, and submit to the HRSD for the Visa. Once approved, your business is now ready for further operations.

There are several benefits unique to KSA for setting up a business in KSA. Here’s an overview of the key benefits below:

• Strategic Location

At the convergence of 3 different continents, KSA’s road and railway infrastructure cover more than 77,000 km. Vast and convenient connectivity locally and internationally enables businesses to strengthen their regional presence and broaden their reach in the market.

• Young and Skilled Workforce

Aligned with KSA’s Vision 2030, the Kingdom has invested $50 billion into the education sector. Paired with a 58% working population under 35, businesses in KSA can leverage the local workforce to facilitate growth and innovation.

• Business Friendly Environment

KSA’s business landscape and market are dynamic and vast, offering a multitude of government support and incentives for business setups in KSA, such as attractive solutions, tax credit and exemptions, loan programs, and initiatives such as the GSCRI (Global Supply Chain Resilience Initiative) and new SEZs (Special Economic Zones).

With KSA’s complex company formation procedure, and competitive market, CBD is ready to help. As an award-winning corporate services firm, CBD provides entrepreneurs with comprehensive services that guide you through the company formation process and beyond.

Contact us at: uae@cbdcorporateservices.com for tailored assistance and further information.