Saudi Arabia
A rising powerhouse, blending rich resources with bold economic innovation
About Saudi Arabia License
Benefits of an Saudi Arabia Incorporation
Our Advantages
Learn more about the Advantages of Saudi Arabia License Mainland
Saudi Arabia has cultivated a robust business ecosystem
The recent New Companies Law has introduced flexible business structures, particularly benefiting limited liability companies. Moreover, the government's unwavering support for SMEs, through initiatives such as incubators, accelerators, and financial aid, has created a thriving environment for entrepreneurship. These factors collectively position Saudi Arabia as a compelling destination for businesses of all sizes.
Saudi Arabia offers a competitive tax landscape
Businesses operating in the Kingdom benefit from a relatively low 20% corporate income tax rate and the absence of personal income taxes. The implementation of a 15% VAT rate is balanced by exemptions on specific goods and services, such as exports and services rendered to non-GCC residents.
Saudi Arabia's Economic Diversification
Saudi Arabia is actively transitioning from an oil-centric economy to a diversified one. With non-oil sectors already contributing significantly to the GDP, the kingdom is strategically investing in various industries to sustain this growth trajectory. By attracting foreign investment, nurturing SMEs and startups, and expanding sectors like tourism, transportation, and entertainment, Saudi Arabia is positioning itself as a dynamic and resilient economy on the global stage.
Saudi Arabia offers an exceptional quality of life
Renowned for its safety and security, the Kingdom provides residents with a high standard of living characterized by affordable costs and robust government support. This, combined with its thriving business environment, makes Saudi Arabia an attractive destination for both local and foreign entrepreneurs seeking to establish a successful business.
1. Joint Liability Company (General Partnership)
A Joint Liability Company, also known as a general partnership, is a business structure in Saudi Arabia where two or more individuals share ownership and management responsibilities. The key characteristic of this type of company is the unlimited personal liability of each partner for the company's debts and obligations.
2. Limited Partnership Company
A Limited Partnership Company is a business structure featuring two distinct types of partners:
- General Partner: Possesses unlimited personal liability for the company's debts and obligations. They are responsible for managing the business and making critical decisions.
- Limited Partner: Has liability restricted to their initial investment. They participate in the company's profits but have no involvement in day-to-day operations or decision-making.
3. Joint Stock Company
A Joint Stock Company is a corporate entity owned by multiple shareholders. Each shareholder owns a portion of the company, represented by shares, which can be bought, sold, or transferred without affecting the company's existence. This structure provides a means for companies to raise capital by selling shares to the public, enabling significant growth and expansion. Unlike partnerships, shareholders in a joint stock company have limited liability, meaning their personal assets are generally protected from the company's debts.
4. Simple Joint Stock Company (SJSC)
The Simple Joint Stock Company (SJSC) is a modern business structure introduced by Saudi Arabia's New Companies Law to facilitate entrepreneurship and investment. Designed to be more flexible and accessible than traditional joint stock companies, SJSCs offer several key advantages
- Simplified Formation: Can be established by a single individual.
- Flexible Structure: No restrictions on the number of board members or director compensation.
- Diverse Share Classes: Permits the issuance of various share types with different rights and privileges.
- Lower Barriers to Entry: Less stringent requirements compared to traditional joint stock companies.
5. Limited Liability Company (LLC)
An LLC is a popular business structure that offers limited liability protection to its owners. This means that the personal assets of the owners are shielded from the company's debts and liabilities. Owners, known as members, are responsible only up to the amount of their investment in the company. LLCs provide flexibility in management & taxation, making them a versatile choice for various business types.
Business Structures
Requirement for Obtaining a Business License in Saudi Arabia
General Requirements
- Company Registration Certificate: by the Saudi Arabian General Investment Authority (SAGIA) or the Ministry of Commerce.
- Commercial Register: A document confirming the company's registration with the Chamber of Commerce.
- Lease Agreement: If applicable, a copy of the lease agreement for the business premises.
- Passport Copies of Shareholders and Directors: Valid passports of all shareholders and directors.
- Power of Attorney: Authorizing a representative to act on behalf of the company.
- Business Plan: A detailed outline of the company's operations, financial projections, and market analysis.
- Bank Guarantees or Letters of Credit: Depending on the business activity.
- Industry-Specific Licenses or Permits: If required by the relevant regulatory authorities.
Additional Requirements for Specific Business Structures
- Joint Stock Company: of Association, Share Capital Certificate, Shareholder Register.
- Limited Liability Company: Partnership Agreement, Capital Subscription Agreement.
Important Considerations
- Document Authentication: Ensure that all documents are properly authenticated and legalized according to Saudi Arabian law.
- Arabic Translation: Most documents will need to be translated into Arabic.
1. Define Your Business Scope and Structure:
- Conduct thorough market research to identify business opportunities.
- Determine the legal structure that best suits your business (LLC, Joint Stock Company, etc.).
- Identify necessary licenses and permits based on your business activities.
2. Obtain Investment License (if applicable):
- For foreign investors, securing a license from the Ministry of Investment (MISA) is crucial.
- Understand the eligibility criteria, required documents, and application process.
- Consider hiring a local consultant to navigate the licensing process efficiently.
3. Reserve Your Company Name:
- Choose a unique and distinctive name that aligns with your business identity.
- Check name availability through the Unified Centre.
- Reserve the chosen name to prevent others from using it.
4. Draft Articles of Association:
- Prepare the legal framework outlining the company's structure, ownership, and governance.
- Ensure compliance with Saudi Arabian corporate law.
- Seek legal counsel to draft the document accurately and comprehensively.
5. Obtain Commercial Registration:
- Submit the required documents to the Ministry of Commerce and Investment (MCI).
- Pay the necessary fees and obtain the commercial registration certificate.
- Understand the implications of different commercial registration categories (e.g., retail, wholesale, services).
6. Establish a Corporate Bank Account:
- Open a bank account with a reputable Saudi Arabian bank.
- Provide necessary documentation, such as the commercial registration certificate and shareholder information.
- Explore available banking services and products to meet your business needs.
7. Comply with Government Regulations:
- Register with relevant government agencies (GOSI, ZATCA, HRSD).
- Understand tax obligations, labor laws, and social insurance requirements.
- Stay updated on regulatory changes and industry-specific compliance standards.
8. Obtain Necessary Licenses and Permits:
- Apply for specific licenses or permits required for your business operations (e.g., health, municipality, industry-specific).
- Meet the licensing authority's requirements and obtain the necessary approvals.
9. Establish Your Business Premises:
- Secure a suitable office or commercial space.
- Comply with zoning regulations and building codes.
- Obtain occupancy permits and necessary utilities connections.
Additional Considerations:
- Hiring Local Talent: Understand labor laws, visa requirements, and recruitment processes.
- Intellectual Property Protection: Register trademarks, patents, or copyrights to safeguard your assets.
- Business Continuity Planning: Develop strategies to mitigate risks and ensure business resilience.