12 Steps to Incorporating in Saudi Arabia in 2024

Any company that is incorporated is a limited company. In general terms, Incorporation is the registration of a company that is limited. Only limited liabilities are possessed by the organization. The creditors would not be able to charge you personally for any dues. It often makes it easier for the owner as incorporating a company can protect the personal assets of the owner. The company that has been incorporated can have its shareholders and directors. Incorporating in Saudi Arabia, is straight process.

Once the business is incorporated, the owners can raise capital by selling stock in the business. Incorporating a business or a company in Saudi Arabia could be a good strategy in the near future. 

In 2024, it is a simplified process to incorporate a company. this article, you will get to know about the steps that need to be followed before and after incorporating in Saudi Arabia.

Pre-Incorporation Steps for Incorporating in Saudi Arabia 

1. Client’s due diligence and assessment: Before starting a company in Saudi Arabia, a proper assessment of documents needs to be done. This is done to ensure safety and security by preventing any further legal indulgence from the Saudi Arabian authorities in the near future. 

2. Pre-Planning: A detailed mapping of each step needs to be done beforehand. This planning generally involves what the client wants while incorporating in Saudi Arabia. What kind of KSA  business entity a person wants to establish, consideration of cash flows and tax payments, visa strategies, strategies related to employment visa, and much more. 

3. Document Preparation: Notarization of parent’s company documents needs to be done, to begin with the process of branch registration. Legalization of documents should be done in the Saudi Arabia embassy that is in the country of origin.  Business licenses, certificates of incorporation, and power of attorney are some of the important documents. Thus, it is a crucial step.

Steps for Incorporation in Saudi Arabia 

1. MISA pre-approval (required only for foreign nationals): The prior approval of MISA (Maintenance of Internal Security Act) is the first phase for the incorporation of a company. Along with the application form, documents are sent to MISA for review. The pre-approval certificate is issued by the  MISA and also makes sure if the company can be registered as per paid-up share capital levels. It also tells if 100% foreign ownership will be allowed or not.

2. Document preparation and name reservation: The AOA (articles of association), forms of incorporation, and establishment deeds are required to be prepared. The name of the company also needs to be defined by the Unified Centre. 

3. Certificate of Registration and Tax Number: MOIC (Saudi Arabia Ministry of Commerce and Investment ) is the organization where the application of company registration needs to be submitted. Thereafter, 6 weeks after submitting the application , the certificate of registration (CR) is issued. Tax registration is also done after 3 weeks.

4. Secured Business Premises: After registration, It is obvious to find a space according to the needs of the business. Proper installation of cameras and furnishing needs to be done. The main part of securing a business premises is securing a lease agreement with the landlord.

5. Municipality Registration and Opening a Bank Account: The registration process from the local municipality can take up to 3 months. The nationals of Saudi Arabia can hire employees immediately after the registration of the municipality is completed whereas the foreign nationals have to wait for the final MISA business license. 
   
   Simultaneously, The paid-up share capital needs to be deposited in a local Saudi corporate bank account.

6. Issuance of MISA foreign business license: This step is only required for foreign nationals. Once the foreign business license is issued by the MISA, the foreign nationals can issue invoices, sign contracts for their business, and hire employees.

Post-Incorporation Steps for Incorporating in Saudi Arabia 

1. Employee Visa: It is crucial to secure Iqama which is the Saudi employment visa required for foreign nationals to be appointed as a bank signatory to a Saudi corporate bank.
2. Bank Account Conversion: Only after securing Iqama, one can have an operating corporate bank account. The bank signatory can also perform internet banking access after that.

Incorporating in Saudi Arabia in 2024 is a good strategy looking after the country’s economy and business successes. However, it becomes difficult for outside companies to incorporate a company in Saudi Arabia but the task can be completed with proper guidance and following the crucial steps. Unfortunately, incorporating in Saudi Arabia is very expensive as it involves high payments to lawyers, accountants, the government, and the embassy.

Apart from these leverages that Saudi Arabia offers to nationals of GCC and foreign nationals, there are some limitations too. There are several areas or industries where foreign nationals are not allowed to work.  Some of the restrictions are real estate, tourism, the production and exploration of oil, recruitment and employment services, and printing and publishing.