Steps To Register A Company In Saudi Arabia: A Beginner’s Guide

Saudi Arabia has become an attractive destination for businesses worldwide, thanks to its booming economy and favorable government policies. Register a Company in Saudi Arabia today to take advantage of these opportunities The country’s Vision 2030 initiative encourages entrepreneurship and foreign investment.

Opening up opportunities for businesses in various sectors. Whether you’re a local entrepreneur or a foreign investor, understanding the procedure of registering a business in Saudi Arabia is essential. Here you can find the steps, requirements, and costs associated with Saudi company formation.

Step-By-Step Company Registration Process

Registering a company in Saudi Arabia concerns numerous legal and administrative steps. Here’s a breakdown of the process to help you understand it better –

1. Choose the Right Business Structure

The first step in the Saudi company register process is to determine the type of business structure that suits your needs. The most common types of business structures in Saudi Arabia include –

• Limited Liability Company (LLC) – This is the most popular choice for small and medium-sized enterprises (SMEs).
• Joint Stock Company (JSC) – Suitable for larger businesses or those making a plan to go public.
• Branch Offices – These are designed to allow foreign companies to set up shop in Saudi Arabia without having to form a new entity.
• Sole Proprietorship – A simple option for individuals running a business alone.

Your preference for business structure will define the legal and financial requirements you need to meet.

2. Reserve a Business Name

Once you’ve selected a business framework, you need to select a unique business name. The name must comply with the regulations set by the Saudi Ministry of Commerce and Investment (MCI). It should not be misleading or identical to an existing business name.

You can review the availability of your preferred business name through the MCI’s online portal and reserve it for a small fee.

3. Draft the Articles of Association

The Articles of Association (AoA) is a lawful document that summarizes the business’s internal structure, operations, and management. This document includes details such as the company name, business activities, registered address, shareholders, and capital contribution.

For an LLC, the AoA should be drafted in Arabic and notarized by a public notary. For foreign investors, it’s essential to have the AoA reviewed by a legal expert to ensure compliance with Saudi laws.

4. Obtain Investment License (For Foreign Investors)

Foreign investors need to acquire an Investment License from the Saudi Arabian General Investment Authority (SAGIA). This license allows foreign entities to operate within Saudi Arabia and is crucial for those looking to establish a Saudi company formation as a non-Saudi entity.

The application for this license can be submitted online through SAGIA’s portal. You will have to deliver information about your business activities, shareholders, and investment plan.

5. Open a Corporate Bank Account

To legally operate a company in Saudi Arabia, you must open a corporate bank account in a local bank. The bank will require the Articles of Association, investment license (if applicable), and identification documents of the shareholders.

This account will be used to deposit the company’s initial share capital, which must be verified before proceeding with the registration.

6. Register with the Ministry of Commerce and Investment

The next phase is to officially register a company in Saudi Arabia with the Ministry of Commerce and Investment (MCI). This entails turning in the required paperwork, such as the business name reservation certificate and the notarized articles of association.

A Commercial Registration (CR) number, which serves as the official company license, will be granted to your business upon approval. The majority of official company operations, such as hiring staff and opening bank accounts, require the CR number.

7. Register for Zakat, Tax, and Social Insurance

After obtaining the Commercial Registration, the company must register with the General Authority of Zakat and Tax (GAZT) for tax purposes and General Organization for Social Insurance (GOSI) for employee social insurance.

Saudi Arabia sets a corporate income tax of 20% on foreign-owned businesses. However, Saudi-owned businesses or companies owned by citizens of the Gulf Cooperation Council (GCC) countries are subject to Zakat, which is a religious levy of 2.5% on income or assets.

8. Obtain Municipality License and Other Approvals

Depending on the essence of your company, you may need additional licenses from the local municipality or other regulatory bodies. For instance, businesses involved in food services, health care, or construction will require special permits.

Required Documents for Register A Company In Saudi Arabia

To complete the Saudi company formation process, you’ll have to collect and present a range of documents. Here is a list of the most important documents required –

1. Articles of Association (AoA)

2. Shareholder Identification

3. Investment License (For Foreign Investors)

4. Business Name Reservation

5. Bank Account Proof

6. Proof of Address

7. Municipality License

Costs and Timelines

Registering a company in Saudi Arabia involves several costs and fees, which vary based on the sort of business and the services needed. Here’s a breakdown of the key expenses –

1. Business Name Reservation –This service typically costs between 100 to 200 SAR (approximately $26 to $53 USD).

2. Notarization Fees – The notarization of the Articles of Association can cost around 1,500 SAR (approximately $400 USD), depending on the notary and the document’s complexity.

3. SAGIA Investment License (For Foreign Investors) – The cost of obtaining an investment license ranges from 2,000 to 10,000 SAR (approximately $533 to $2,666 USD), depending on the type and scale of investment.

4. Commercial Registration Fees – The fee for obtaining a Commercial Registration (CR) number is approximately 1,200 SAR (about $320 USD) per year.

5. Corporate Bank Account – Opening a corporate bank account typically requires an initial deposit of the company’s share capital, which varies depending on the type of business.

6. Zakat and Taxes – The company will also need to factor in ongoing costs related to Zakat, corporate taxes, and employee social insurance contributions.

Timelines

The company registration process in Saudi Arabia generally takes between 2 to 4 weeks, depending on how quickly the required documents are prepared and submitted. Foreign investors may experience a slightly longer timeline due to the additional requirement of obtaining the SAGIA investment license.

Conclusion

Discover the essential steps to register your company in Saudi Arabia with this beginner’s guide. Start your entrepreneurial journey with Express Services KSA todayBy following the step-by-step guide outlined in this blog, you’ll be well-prepared to successfully register a company in Saudi Arabia.

From picking the suitable business system to gathering the required documents, each stage of the process is critical to the Saudi company register.With careful planning, the right documents, and a clear understanding of costs and timelines, you can set up a company in Saudi Arabia and take full advantage of its growing market and economic potential.

Read More: Saudi Arabia Business License: What You Need to Know Before Applying