How to start a Company in Saudi Arabia

Saudi Arabia has been one of the booming investment grounds that allow business investors to step forward and form a business entity

Benefits of Business Setup in Saudi Arabia (KSA)

Did you know that Saudi Arabia (KSA) is the preferred by expats from a variety of nations to carry out the business setup in Saudi Arabia (KSA) This is because it offers several benefits:

Access to a large market

Strong Infrastructure

Favorable business environment

Access to natural resources

You have to follow 20 steps to complete this process in Saudi Arabia

1. Obtain a MISA Investor License

2. Name Reservation

3. Draft Local Articles of Association (AoA)

4. Commercial Registration (CR)

5. Obtain a Company seal

6. Register with The Ministry of Labor

7. Register with the General Organization for Social Issuance (GOSI)

8. Register a National Address

9. Issue a GM Visa

10. Registration with the General Authority of Zakat and Tax (GAZT) and VAT Registration

11. Activate the Chamber of Commerce (CoC) Account

12. Obtain Health Insurance

13. Get a Medical Check-up

14. Issuing the GM’s Iqama

16. Register with the Muqeem portal for streamlined visa and residency management

17. Register with the Absher portal for an array of e-government services

18. Register with the Qiwa portal for business services designed for SMEs

19. Register with the Mudad Portal to manage essential municipal services for your company

20. Open a Bank account

Expand your business to KSA with 100% foreign ownership.

1. Choose a legal structure for your business. There are different types of legal entities that you can establish in Saudi Arabia, such as limited liability companies, joint stock companies, branches, representative offices, and sole proprietorships. Each type has its own advantages and disadvantages, depending on your business goals, capital requirements, tax implications, and liability exposure. You should consult a local lawyer or a business consultant to help you decide which legal structure suits your needs best.

2. Register your business name and trademark. You need to choose a unique and distinctive name for your business that reflects your brand identity and does not infringe on any existing trademarks. You can check the availability of your desired name on the Ministry of Commerce and Investment's website (https://mc.gov.sa/en/eservices/Pages/default.aspx). You also need to register your trademark with the Saudi Authority for Intellectual Property (https://www.saip.gov.sa/en/) to protect your brand from unauthorized use.

3. Obtain the necessary licenses and permits. Depending on the nature and scope of your business activities, you may need to obtain various licenses and permits from different government agencies, such as the Ministry of Commerce and Investment, the Ministry of Labor and Social Development, the Ministry of Municipal and Rural Affairs, the General Authority for Zakat and Tax, the Saudi Customs, and the Saudi Food and Drug Authority. You can use the online portal (https://www.my.gov.sa/wps/portal/snp/servicesDirectory/servicedetails/s9014/!ut/p/z0/04_Sj9CPykssy0xPLMnMz0vMAfIjo8zivQIsTAwdDQz9LQwNzQwCnS0tXPwMvYwN3A30g1Pz9L30o_ArAppiVOTr7JuuH1WQWJKhm5mXlq8fUWxpYGiiX5DtHg4A7PEzGQ!!/) to apply for some of these licenses and permits electronically.

4. Open a bank account and set up an accounting system. You need to open a bank account in Saudi Arabia to manage your finances and transactions. You can choose from a variety of local and international banks that offer various services and products for businesses. You also need to set up an accounting system that complies with the Saudi accounting standards and regulations. You can hire a professional accountant or use an accounting software to help you with this task.

5. Hire and train your staff. You need to recruit qualified and skilled staff for your business operations. You can use online platforms, recruitment agencies, or personal referrals to find suitable candidates. You also need to comply with the labor laws and regulations in Saudi Arabia, such as paying social security contributions, providing health insurance, issuing employment contracts, and following the Saudization policy that requires you to employ a certain percentage of Saudi nationals in your workforce. You also need to train your staff on the best practices and standards of your industry and market.

6. Promote your business and build relationships. You need to market your business and products or services to your target audience and potential customers. You can use various channels and methods, such as online advertising, social media, websites, blogs, newsletters, events, exhibitions, trade shows, networking, referrals, etc. You also need to build strong relationships with your stakeholders, such as suppliers, distributors, partners, customers, regulators, competitors, etc. You can join trade associations, chambers of commerce, or other business organizations that can help you connect with other businesses and access valuable information and resources.

In case you do not want to read the detailed article, you can read the summary provided below which will give you brief insight into how to open a business in KSA:

Overall, the process involves 10 steps divided into three key stages. The Regional Headquarters (RHQ) program also incentivizes setting up regional headquarters in Saudi Arabia to gain eligibility for government tenders. Starting on January 1, 2024, the Saudi government and state-backed institutions will stop signing contracts with foreign companies that base their Middle East headquarters in any other country in the region.

- Choose a business structure and industry. You need to be clear about the type and nature of your business and the legal form that suits your needs. You can choose from various options such as a limited liability company, joint stock company, branch office, etc.

- Obtain an investment license from the Ministry of Investment Saudi Arabia (MISA). This is the first and most important step to start your business in Saudi Arabia. You need to submit an online application with the required documents and fees. The license will allow you to operate in the country and enjoy various incentives and benefits.

- Get the Articles of Association notarized. The Articles of Association (AoA) are the legal document that defines the rules and regulations of your company. You need to get them notarized by a public notary or a licensed lawyer in Saudi Arabia.

- Get your Commercial Registration issued. The Commercial Registration (CR) is the official document that proves your company's existence and identity. You need to apply for it at the Ministry of Commerce and Investment (MCI) with the notarized AoA and other documents. The CR will include your company name, address, activities, capital, shareholders, etc.

- Select a trade name. You need to choose a unique and suitable name for your company that reflects your business activities and complies with Saudi laws and regulations. You can check the availability of trade names on the MCI website and reserve your preferred name online.

- Register your company's National Address. You need to register your company's physical address with the Saudi Post on their website. This will enable you to receive official correspondence and mail from the government and other entities.

- Look for a physical office. You need to find a suitable location for your business operations in Saudi Arabia. You can rent or buy an office space or use a co-working space or a virtual office service. You need to ensure that your office meets the standards and requirements of the relevant authorities and agencies.

- Get the required approvals. Depending on your business activities, you may need to obtain additional approvals or permits from various government departments or agencies such as the Ministry of Health, the Ministry of Environment, Water and Agriculture, the Saudi Food and Drug Authority, etc. You need to check the specific requirements for your industry and comply with them accordingly.

- Register with government departments for taxation, insurance and hiring employees. You need to register your company with the General Authority of Zakat and Tax (GAZT) for tax purposes, the General Organization for Social Insurance (GOSI) for social security contributions, and the Ministry of Human Resources and Social Development (MHRSD) for labour regulations and Saudization policies. You also need to obtain a work permit for yourself and your foreign employees from MHRSD.

- Open your corporate bank account. You need to open a bank account for your company in Saudi Arabia to manage your financial transactions and operations. You need to provide your CR, AoA, investment license, trade name certificate, national address certificate, tax registration certificate, and other documents to the bank of your choice.

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