Saudi Arabia has emerged as a vibrant destination to start a business. The country is home to enormous natural resources like oil and fuels, which have driven its economy for many years. In addition, it also houses robust industries in machinery, dairy products, and pharmaceuticals which makes for a vast and diverse economy.
Further enhancing Saudi Arabia’s business landscape are policies that open the economy to investments and new businesses, some of which are listed below. These make the Kingdom of Saudi Arabia the ideal place for investors in the Middle East.
All foreign companies can benefit from the numerous incentives the Kingdom of Saudi Arabia provides to businesses.
The recently enacted New Companies Law has provisions indicating what Saudi Arabia company types can be set up, including new business forms to accommodate more preferences. The law provides limited liability companies (LLCs) with a larger access to finance, alongside other benefits.
The kingdom also offers extensive support to SMEs through its Small and Medium Enterprises General Authority, Monsha’at. This state-run authority offers incubators, accelerators, lending programs, and co-working spaces to allow small Saudi Arabia businesses to thrive.
Like its fellow nations in the Middle East, Saudi Arabia scores high in tax benefits. The kingdom employs a 20% corporate income tax rate for a Saudi business and no personal income taxes. Meanwhile, the standard VAT rate sits at 15%, but there are several exempted supplies, such as the export of goods outside the GCC region and services provided to non-GCC residents.
Saudi Arabia is one of the safest countries worldwide. In 2020, the Kingdom was recognized as the safest among all G20 nations, with a low crime rate. Residents also enjoy a high standard of living in Saudi Arabia, with reasonable costs and adequate government support. Setting up a company in Saudi Arabia is a strong option, whether you are a GCC resident or a foreigner looking for a place to relocate or set up a secondary home.
The cost to start a business in the Kingdom of Saudi Arabia would depend on several factors, and would differ if you are a GCC national or a foreign national.
It also depends on the business activities, number of shareholders, office space requirements, and other factors.
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The business formation requirements in Saudi Arabia may depend on the nature of the company, but the following documents are best to prepare and must be submitted in Arabic.
Ready to establish your business in Saudi Arabia? Here is the step-by-step guide for you.
Choose the specific operations you want your business to take on in Saudi Arabia, as you must mention this in your application. It will also guide what company type will work best for you, which our team will help you decide.
If you are a foreign investor, you will need a license from the Ministry of Investment Saudi Arabia, which oversees licensing for all foreign-owned companies in Saudi Arabia. Our specialists will assist you with your application, including information about your business and financial details.
Submit your company’s Articles of Association to the Ministry of Commerce and Investment (MCI) and have it notarized once approved. You will need this to accomplish your Commercial Registration (CR) and obtain your Tax Number.
Decide on a company name that fits your business, then have this reserved and approved by the Unified Centre.
A commercial registration certificate indicates that your business is legally registered and authorized to operate in Saudi Arabia.
By registering a national address, your company can ensure it complies with the relevant regulations and benefits from improved government services and communication.
Once your company has obtained its commercial registration certificate, it must then register with several government departments, including the General Organization for Social Insurance (GOSI), the Zakat, Tax and Customs Authority (ZATCA), and the Ministry of Human Resources and Social Development (HRSD). Each of these departments has specific requirements and procedures for registration.
Lastly, you are required to open a bank account in Saudi Arabia for all your business transactions. You must open it within 90 days of receiving your Commercial Certificate.