Company Formation in Saudi Arabia: A Complete Guide

• Home
• /
• Knowledge Base
• /
• Post
• /
• Business
• /
• Company Formation in Saudi Arabia: A Complete Guide

Company Formation in Saudi Arabia: A Complete Guide

When entrepreneurs want to start a company in the Middle East, they often opt for company registration in Dubai. However, there are many other places in the Middle East that are attractive for business setup. One of them is Saudi Arabia, officially known as Kingdom of Saudi Arabia (KSA). 

Often referred to as the land of liquid gold, KSA is filled with vast opportunities, growing industries and investor friendly policies. In this blog post, we will guide our readers on how they can incorporate a company in Saudi Arabia.

Why Incorporate a Company in Saudi Arabia?

Here are a few reasons why you should consider company formation in KSA:

• It is a leading country in the Middle East when it comes to ease of doing business.

• KSA is one of the safest countries in the world. Its crime rate is low compared to other countries. According to the Numbeo Crime Index, it has a low crime index of 26.9 and a high safety index of 73.1 out of 100. The index suggests it's a safe country. 

• It is a highly tax efficient country in the middle east, making it a great advantage for entrepreneurs who want to save on taxes.

• In many areas in KSA, there are well furnished commercial spaces that are equipped with state of the art furniture, facilities and amenities.

• The country’s government offers incentives with the intention to attract foreign entrepreneurs to establish a company in KSA.

• KSA is the largest economy in the Middle East. It provides entrepreneurs with access to a vast market.

• The country offers geographical advantage to business owners as it serves as a strategic gateway that connects Asia, Africa and Europe.

• When it comes to advanced technology, KSA is leading the way. According to UNESCO's 2024 report, it ranks 14th globally in AI readiness. In the Arab region, it ranks first.

All these reasons make Saudi Arabia quite an attractive destination for entrepreneurs from across the world!

Documents Required for Company Formation in Saudi Arabia

To register a company in KSA, you require the following documents:

• Investment license application form

• Notarized board resolution with name of partners and share of each partners capital

• Audited financials of the last 3 years

• Copy of Articles of Association and incorporation forms

• Passport copies of all the shareholders

• Proof of ID and address proof of directors and shareholders

• Company name reservation certificate

• Lease agreement for the registered Saudi office

• Bank certificate confirming capital deposit

• Ultimate Beneficial Owner (UBO) declaration 

• Attested copy of Power of Attorney

Company Formation Process in Saudi Arabia

The process for company registration in Saudi Arabia involves the following steps:

• Choose Business Activity as well as Name: You must select what your core business activity will be and also the business name. Make sure the name you choose is unique and complies with the regulations of KSA. 

• Obtain Investment License: You must file an application for obtaining an investment license from MISA. Make sure you file the application after mentioning all necessary details accurately in it so you can secure the license easily. In case of an incorrect or incomplete application, the authority can reject your application and you might need to re-apply.

• Reserve Trade Name: Now, with the Ministry of Commerce of KSA, you must reserve the chosen company name.

• Prepare Company Documents: You must prepare a draft of essential documents like Memorandum of Association and Articles of Association.

• Open a Corporate Bank Account: It is necessary to open a corporate bank account and also deposit the required capital (if applicable). During the course of business, this account will be essential for business transactions.

• Register with the Ministry of Commerce: You must register with the Ministry of Commerce. For this, you must submit an application along with necessary documents.

• Secure Additional Licenses/Approvals: You may need to apply for and obtain additional licenses and approvals depending on your industry.

• Register for Tax: You will need to register for tax with ZATCA (Zakat, Tax and Customs Authority).

• Register Employees: You must register the eligible employees at your company with the General Organization for Social Insurance (GOSI).

Conclusion

For entrepreneurs who want to mark their presence in the Middle East, company incorporation in Saudi Arabia is a good idea. The country is filled with business opportunities, provides ease of doing business, has a low crime rate and offers state-of-the art infrastructure and advanced technology. For Saudi Arabia business setup, you must obtain all the mandatory licenses and approvals from the appropriate authorities.

Whether you need assistance in company registration in India or in the Middle East, you can connect with our consultants at Registrationwala! They come with years of experience on their hands and will enable you to incorporate your company smoothly.

Frequently Asked Questions (FAQs)

Q1. What is corporate tax rate in KSA?

A. The corporate tax rate in KSA is 20% of the net adjusted profits.

Q2. What is Zakat?

A. Zakat means an obligatory annual act of charitable giving required from Muslims who meet a minimum threshold of wealth known as the nisab.

Q3. What is Nisab?

A. Nisab refers to the minimum amount of wealth a person must own in order to become liable for paying Zakat.

Q3. Which license replaced the SAGIA license in 2020?

A. The MISA license replaced the SAGIA license in 2020. This happened because the Saudi Arabian General Investment Authority (SAGIA) was elevated to a ministerial status and transformed into the Ministry of Investment (MISA).

Q4. What is ZATKA?

A. ZATCA full form is Zakat, Tax and Customs Authority. This authority is the Saudi Arabian government agency responsible for collection of zakat, taxes and customs duties.

Q5. Can foreigners start a business in KSA?

A. Yes, foreigners can start a business in KSA upon receiving all the necessary approvals and licenses.

Q6. What is the General Organization for Social Insurance (GOSI)?

A. General Organization for Social Insurance (GOSI) is a Saudi Arabian government agency founded in 1969. It is responsible for administering social insurance coverage in the country.

• 671 views