Saudi Arabia, owing to its Vision 2030 plan, is on a mission to diversify its economy beyond the oil industry. As a result, it gives ample opportunities for entrepreneurs wishing to establish a company in the country. Tourism, technology, renewable energy, and entertainment are key areas with growth potential. It is also worth pointing out that these terrains also invoke incentives in the form of tax benefits. Moreover, the country facilitates a conducive environment to form a company with streamlined business procedures.
In this context, the following sections which unveil the process of company formation in Saudi Arabia have a particular relevance. Since it is sourced from leading company formation consultants in Saudi Arabia it is a reliable document.
Planning Stage
Market Research and Feasibility Study
Business setup companies in Saudi Arabia emphasize this early planning stage as it is decisive in directing the company to success. The steps involved in this stage include:
- Understanding the Saudi Arabian business environment
- Identifying the product demand
- Competitor Analysis
- Target market analysis
Overall, a feasibility study on the profit-making potential of this company is evaluated.
Choosing the Right Business Structure
Before delving further into procedural nuances it is requisite to choose the company name and its legal structure. The available options in legal structure include the LLC (Limited Liability Company), JSC (Joint Stock Company), SMLLC (Single Member Limited Liability Company), and LLP (Limited Partnership Company).
Other than this Saudi Arabia also facilitates to have special business forms such as Joint Ventures, Branch Offices, and Representative Office. To choose the right legal structure it requires to dive into their nuanced framework and compare it with your requirements.
Other than these two preparatory tasks entrepreneurs are also required to be prepared with documents such as Board Resolution and Power of Attorneys. Work with your company formation consultants in Saudi Arabia for a detailed list of paperwork required.
Documentation Processing
Application for Investment License
This can be applied through the online portal of the Saudi Arabian General Investment Authority (SAGIA). Even though it is a simplified process it requires to submit some documents with strict adherence to guidelines. Such requirements include your business plan, proof of identity, and financial statements among others.
Approval of Articles of Association
It is a detailed outline of the company from its name, address, capital, roles, and responsibilities to its procedural nuances including profit distribution and dissolution. This is to be approved by the Ministry of Commerce and Investment to be followed by a notarization procedure to register for commercial registration certification and tax number.
Company Registration
Firstly the company name has to be reserved with Unified Centre and get approved before submitting any forms. Then there is this program called MERAS where the company can pursue registration with the Saudi Arabian Ministry of Commerce and Industry (MOCI). Since it is a program designed to streamline business setups its procedures are comparatively on the easier side. Before applying the MOCI MERAS facilitates registration with a Municipality under it on condition that it has a physical office.
Once the Certificate of Registration, which is usually issued in 6 weeks, and tax registration is complete usually companies are eligible to apply for a foreign business investment license at SAGIA. This facilitates the company to sign contracts, issue invoices and hire employees. Other documents required for this license include a Municipality License and Bank share capital deposit letter and approval.
This step is then followed by the creation of a company seal and registration with the Chamber of Commerce and Industries. In case you find this stage confusing it is of greater importance to consult with a company formation consultants in Saudi Arabia.
Bank Account Opening
It is a requisite to open a bank account in a local bank in Saudi Arabia within 90 days of issuing the commercial certificate.
Choosing a Bank
Since this bank account is to be converted into a corporate account later, it is a must to choose a bank that offers corporate services. Moreover, it is advisable to see if it has expertise in handling international clients. Recommendable banks include the Riyadh Bank and Saudi British Bank (SABB).
Opening a Corporate Account
In the case of a corporate account, it is usually required to submit documents. These documents may include a CR certificate, investment license, articles of association, and identification documents. Consult with the selected bank to get a clear picture of the required documents.
Final Stage of Compliance
This stage includes registration with the General Organization for Social Insurance (GOSI) and the registration for Zakat and Tax. The latter is to be registered with the General Authority of Zakat and tax. Business setup companies in Saudi Arabia highlight the importance of strict adherence to these compliance measures in the business landscape of Saudi. They also project the need for continued compliance with proper tax filing, financial recording, and workforce management as per the existing rules in Saudi Arabia.
Now that a clear picture of company formation in Saudi Arabia has been provided you might have understood the role of company formation consultants to streamline the entire process. In this direction, we at Helpxpat will be your ideal choice. Reach out to us to ensure a comprehensive service to set up your business in Saudi Arabia.
