Saudi Arabia company registration

DOING BUSINESS IN SAUDI ARABIA IN 2022

Since 2003, Bejarano ADF Consultants Group PLC has been efficiently and effectively assisting our Clients with i) Saudi Arabia business registration ii) business licensing iii) Saudi Arabia business banking solutions iv) visa options and staff recruitment strategies and v) workspace rental solutions.

Compare different Saudi Arabia entities	100% MISA LLC	51% LLC	National LLC	Commercial Agency Agreement
Also known as	دة مسؤولية ذات ش	دة مسؤولية ذات ش	N/A	تفاقية وكالة
Best use of company?	All products/ services	All products/ services	All products/ services	Manufacturing/ export trading
How soon can you invoice Clients/sign sales contracts?	4 months	4 months	2 months	2 months
How soon can you hire staff?	4 months	4 months	3 months	2 months
How soon can you sign a lease agreement?	2 months	2 months	1 month	2 months
How long to supply company registration / tax numbers?	4 months	4 months	2 months	2 months
How long to supply corporate bank account numbers?	6 months	6 months	3 months	3 months
Corporate tax rate on annual net profits?	20%	20%	0%	0%
Zakat tax applicable?	No	2.5%	2.5%	2.5%
Limited liability entity?	Yes	Yes	Yes	No

See full table

Government grants available?	Yes	Yes	Yes	Yes
Government approval required for foreign owners?	Yes	Yes	N/A	No
Resident director/partner/manager/ legal representative required?	No	Yes	Yes	Yes
Minimum paid up share capital?	US$134,000	US$134,000	US$27,000	none
Can bid for Government contracts?	Yes	Yes	Yes	No
Corporate bank account location?	Emirates NDB	BNP Paribas	Alinma Bank	Deutsche Bank
Can secure trade finance?	Yes	Yes	Yes	Yes
VAT payable on sales to local customers?	15%	15%	15%	15%
Average total business set up engagement costs?	US$70,499	US$76,390	US$35,040	US$16,200
Average total engagement period?	6 months	6 months	3 months	3 months
Accounting and tax considerations	100% MISA LLC	51% LLC	National LLC	Commercial Agency Agreement
Statutory corporate tax payable?	20%	20%	0%	0%
Annual Zakat rate payable by GCC residents only?	0%	2.5%	2.5%	2.5%
Legally tax exempt if properly structured?	No	No	No	No
Group HQ tax incentives?	No	Yes, if KSA/GCC owned	Yes	Yes
Must file an annual tax return?	Yes	Yes	Yes	Yes
Must file annual financial statements?	Yes	Yes	Yes	Yes
Must appoint an auditor?	No	No	No	No
Access to double taxation treaties?	Yes	Yes	Yes	No
Withholding tax on payments to foreign shareholders?	5%-20%	5%-20%	0%	0%
Company registration	100% MISA LLC	51% LLC	National LLC	Commercial Agency Agreement
Resident director/partner/manager/ legal representative required?	No	Yes	Yes	Yes
Minimum number of shareholders/partners?	1	2	1	1
Maximum shareholding for foreigners?	100%	49%	0%	0%
Can be wholly foreign owned?	Yes	No	No	No
Sponsorship by a local citizen required?	No	Yes	Yes	Yes
Minimum statutory paid up share capital?	US$134,000	US$134,000	US$27,000	none
Security deposit to be kept with Government?	No	No	No	No
Shelf companies available?	Yes	Yes	Yes	No
Time to incorporate a new entity?	4 months	4 months	2 months	2 months
Can easily convert to a PLC?	Yes	Yes	Yes	No
Public register of shareholders and directors?	Yes	Yes	Yes	Yes
Can have preference shareholders?	Yes	Yes	Yes	Yes
Business considerations	100% MISA LLC	51% LLC	National LLC	Commercial Agency Agreement
Good entity for trademark registration?	Yes	Yes	Yes	No
Can secure an import and export license?	Yes	Yes	Yes	Yes

Our Client needs to travel to Saudi Arabia for business set up?	No
Temporary physical office solutions available?	No
You need a resident as bank signatory?	Yes
The entity will likely be regulated by?	MISA and Ministry of Commerce and Investment
Minimum number of directors/managers?	1
Monthly VAT reporting to the Government?	Yes
Must sign an office lease agreement during incorporation?	Yes
Shareholders & directors documents to be attested/translated?	Yes
Each foreign director needs a personal income tax number?	No
Foreign director needs a residence visa?	No
Foreign bank signatories need a residence visa?	Yes
Maximum number of staff allowed?	No maximum number for any entity
Local to expatriate staff ratio?	10%
Can secure residence visa for business owner?	Yes
Other useful information
What will be included in my customer sales invoice?	Sample invoice format
This country has signed free trade agreements?	Yes
This country is a member of WIPO/TRIPS?	Yes
This country is a member of the ICSID?	Yes
Average custom duties suffered?	5%
Government foreign investment approval required?	Yes
Average monthly office rental? (US$ per sq m)	35
Minimum statutory monthly US$ salary?	800
Average monthly US$ salary for local skilled employees?	1,580
US$ deposit interest rate? (1 year average)	2.89%
Overseas remittance currency controls?	None
Banking considerations
Multi-currency bank accounts available?	Yes
Corporate visa debit cards available?	Yes
Quality of e-banking platform?	Satisfactory
Crowd funding available in this country?	Yes

Saudi Arabia business setup summary

Press the link headings below to read detailed, relevant, up to date information.

Advantages and disadvantages
Advantages of Saudi Arabia company registration
1. Our Clients will enjoy the following benefits, as Saudi Arabia looks to diversify from an oil dependent economy:
  - The Saudi Government welcomes foreign businesses, offering non-oil related services including: i) Agriculture, Forestry and Fishing ii) mining and quarrying iii) manufacturing iv) electricity, gas, steam and air conditioning supply v) construction vi) wholesale and retail trade vii) transportation and storage viii) accommodation and good services activities ix) information and communication x) real estate xi) professional, scientific and technical activities and many more;
  - Saudi Arabia has increased the period of renewability of foreign investment license from 1 year to 5 years. Additionally, the Saudi authorities have reduced the processing time for license issuance. Consequently, Clients will now save maintenance costs and setup time;
  - Foreign companies enjoy exemption from customs duties on the import of machinery, equipment, tools, and spare parts for industrial projects. Additionally, foreign companies are allowed to bid for government contracts and operate in the Kingdom without a Saudi agent or partner;
  - The Saudi Industrial Development Fund makes interest-free loans to industrial companies of up to 50% of the total cost of the project, including pre-operating costs, investment in fixed assets, and working capital. However, a 50% loan requires Saudi participation which is not less than 50%. If Saudi participation is lower, the loan is reduced proportionally;
  - The Kingdom remains by far the largest Arab market and is one of the world’s main trading nations in terms of goods and services. Saudi Arabia still depends on imports for most of its manufactured items, and many of its food stuffs. Consequently, local residents are hungry for international products and services and are willing to spend on quality;
  - Saudi Arabia has the largest Public Investment Fund in the Middle East, the proceeds from which will be invested in Saudi Arabia and increase the general standard of living in the country. As a result, demand for our customers’ goods and services is likely to increase over the coming years;
2. Saudi Arabia provides lucrative opportunities for ICT-related businesses since it has the largest IT market in the Gulf region with a value of almost US$4.6 million. The Kingdom also has ambitious plans to implement 5G services to technologically transform the entire Middle East and North Africa (MENA) region. Moreover, the CITC is promoting and enhancing computer literacy amongst the Saudi population.
3. To improve its economic competitiveness, Saudi Arabia is lowering barriers to entry, including i) easing visa rules for skilled foreign workers ii) strengthening laws to protect investor rights and iii) removing or reducing high import duties and lengthy customs procedures.
Disadvantages of Saudi Arabia company registration
1. Our Clients must be aware of the business challenges of working in Saudi Arabia including:
  - One of the biggest business challenges is the extensive government bureaucracy. As a result, when there is ambiguity about Saudi law, it gives rise to corruption and unnecessary delays in executing deals in the country;
  - Since 2020, Saudi Arabia’s VAT tax rate is 15%, increasing the prices of everyday goods and services. Additionally, a Saudi company suffers 20% corporation tax;
  - Foreign companies registered in Saudi Arabia requires a minimum paid up share capital of US$134,000 for service licenses and up to US$8M for Real Estate business licenses;
  - Saudi Arabian business practices and laws still favour Saudi citizens. Saudi litigants have an advantage over foreign parties in almost any investment dispute because of their first-hand knowledge of Saudi law and culture. The dispute settlement process favours local parties in a dispute;
  - Disputes with Saudi partners causes serious problems for foreign investors. Saudi partners have blocked foreigners’ access to exit visas, forcing them to remain in Saudi Arabia against their will. In cases of alleged fraud, foreign partners may also be jailed to prevent their departure from the country while awaiting police investigation or adjudication of the case;
  - During business registration and corporate bank account opening, the Saudi Government frequently requests documents to be attested by the Saudi Embassy in the country of origin of our Client. This is both a costly and time-consuming exercise and complicates the company incorporation process. Examples of documents include: i) passports copies of directors; ii) parent company certificate of incorporation and M&AA; iii) power of attorney issued by the parent company.
2. The Kingdom still restricts foreign investment in several key industries including i) oil exploration activities; ii) fisheries; iii) printing and publishing; iv) recruitment and employment services etc.
Best uses for a Saudi Arabia company

For companies looking to serve the local Saudi market as they can take advantage of the duty-free access to the 17 countries of the Greater Arab Free Trade Area.

Tell us what you need - we’ll send you a customised proposal in 5 hours!

To help us engineer the optimum Saudi Arabia corporate structure, please complete the 3-minute questionnaire below; then press the submit button below.

This data remains confidential and is not sold to third-parties.

Within 5 hours, one of our senior staff will ring or email you:

Company purpose?

Will the LLC be a trading company or a holding company?
Will the entity be a subsidiary of a foreign company?
The LLC will be tax resident? Having local customers and local staff and local suppliers?
The entity will receive investment income or professional services fees or sales from trading with multi-national customers?
Is double taxation treaty access important?
Do you need our help to legally minimize your international tax obligations?
Do you need our help to increase e-commerce sales (click link)?
Company structure?

Will the shareholders be individuals or corporate?

In what country do you require a corporate bank account? Refer to this web page (click link) for ideas

Do you need multi-currency corporate visa debit cards?

Do you need a resident director?

Nationality of shareholders and directors?
Expected annual sales and net profits?
Does the entity need a special regulatory license or import or export license?
Additional comments?
Tell us about your existing business?

Name of your existing company?
Your business web site address?
What products and services does your company supply?
How many years are you operating this business?
Is your Firm regulated by a Government agency?
In what country are the majority of your customers?

In what country are the majority of your suppliers?
Tell us about you?

Your name?
Your email address?
What country are you based in?

Specifically, what deliverables (click link) do you need?
What is your US$ budget for the services you need?
What does quality customer service mean to you?
How do we contact you?

For now, do you prefer Bejarano ADF Consultants PLC staff to phone you, or just email reply you with some corporate solutions?
If a phone call, on what number can our senior Consultant call you?
If an email, what email address can our Consultant email you at?
What alternative email address can our Consultant email you at?
What is your preferred date and time for a phone call?
In what language do you prefer we communicate with you?
What matters would you like to discuss during the call; the agenda?

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Useful links for Saudi Arabia

Detailed business activity questionnaire

Managing Director Bejarano ADF Consultants

Aidan Healy
Chairman
Bejarano ADF Consultants

To recommend the optimum corporate structure strategy for your business, kindly complete the 5-minute questionnaire below. Your data remains confidential and will not be sold to third-parties.

Within 3 hours thereafter, one of our in-house senior Consultants will ring you to discuss the specific results you need from Bejarano ADF Consultants PLC:

Tell us about your existing business?

Specifically, what services do you require from Bejarano ADF Consultants Group PLC?*

By what date does your Firm needs quality deliverables?

Name and place of residence of your existing company?

Business website address?

What products and services does your existing company supply?

Do you offer any regulated products/services?

In what country are the majority of your customers?

Which bank handles your current corporate banking needs?

Are you representing a Client or your Firm?

Do you need our help to legally minimize international tax?

Do you need help with monthly, quarterly or annual accounting and tax reporting?
Tell us about your new business plan

In what country do you require to register a company? Refer to this web page (click link) for ideas.

What products and services do you plan to supply in the new market?

When are you available to travel to meet the bank officer?

Expected annual sales and net profits?

Within 1 year, how many staff need to be on the ground?

Do you need help finding office or warehouse space?

Shall we help you secure a specific license (import/export, financial, other) ?

If yes, clarify the type of license you require.

In which bank/ financial service provider do you require a corporate bank account? Refer to this web page (click link) for ideas.

Does your business require a merchant account?
Your preferences

For now, do you prefer Bejarano ADF Consultants PLC staff to phone you, or just email reply some global solutions?

If a phone call, on what number can our senior staff call you?*

If an email, to what email address can our staff email you at?*

To what alternative email address can our staff email you at?*

What is your name?*

What is your preferred date and time for a phone call?

What is your Skype ID?

What is your WhatsApp ID?

In what language do you prefer Bejarano ADF Consultants Group PLC to communicate with you?

In what specific ways, can Bejarano ADF Consultants PLC supply quality customer service to you?

What is your budget for the service you need from Bejarano ADF Consultants Group PLC?*

By what date do you need to be able to operate a new fully operational business?