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If you have decided to register a company in Saudi Arabia, you made a good decision. This prosperous country is attracting investors worldwide and is quickly becoming a global hub for entrepreneurs. So today, we will walk you through the process of launching a company in Saudi Arabia step by step:
Make a specific plan
The first step is to learn more about the ways to start a business in Saudi Arabia. Get informed about the exact entity of a company, paid-up capital and licensing requirements based on your business activity.
In this initial phase, it is vital to identify the features, such as the official name of your company and the category of company entity that should be formed. For overseas investors, it is the most convenient for overseas investors to form LLC – Limited Liability Company since it is the most prevalent legal organization in Saudi Arabia. It is enough to have only one shareholder, who may create it. Joint-stock corporations and branch offices are also common forms of business formations.
Obtain an Investment License
The next step is to apply for a foreign investment license from the General Investment Authority of Saudi Arabia (SAGIA). This permits lawful investment in Saudi Arabia; however, a commercial registration certificate from the Ministry of Commerce and Investment is necessary to purchase or create a firm to run a foreign branch.
A company must meet several requirements before 100% ownership may be achieved. First, the entity’s planned permitted operations are intimately tied to the ownership and share capital constraints. Services-related sectors, for example, may be 100 percent foreign-owned, although other corporate operations, such as trade, need a minimum of 25% local ownership. Therefore, international investors should double-check the most recent regulations before purchasing or creating a KSA firm. In addition, the Saudi Embassy will have to confirm the company’s commercial registration and the financial statement from the previous year.
Ministry of Commerce
Foreign investors are obligated to acquire Documents of Memorandum of Association from the Ministry of Commerce. In addition, foreign company branches are required to submit a formal Decision about establishing a branch in Saudi Arabia.
Make sure to visit the Ministry of Commerce to get a Commercial Registration Issuance. Foreign enterprises interested in establishing a company in the Kingdom must deliver the parent company’s commercial registration and the board of directors’ decision to form a branch. You will need to produce the Memorandum of Association for a new company. In addition, the firm must designate the General Director and present evidence of the owner’s and general director’s identity.
Also, you need to register with agencies such as the Tax Authority, Ministry of Labor and Social Development, and General Organization for Social Insurance.
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Open a bank account
A bank account in a local branch must be created within three months after the issue date of the LLC’s business certificate. You may create a business bank account with any bank you choose. You’ll be able to open your business bank account and unfreeze your first capital deposit after the Certificate of Registration is issued.
After the firm is granted a registration number, a corporate bank account must be opened, and any overseas workers must first get a visa (Iqama). In addition, Saudi Arabian corporations must create a capital account to invest the requisite paid-up share capital as part of the registration procedure. After issuing the company registration number, the bank will change this account into an active business account.
In Saudi Arabia, some banks provide online banking in the English language, which would make the procedure easier. When starting a digital account, all you have to do is fill out the initial account opening document and authenticate using the National IAM Platform. Usually, banks provide access directly from their own sites. A certificate of paid-in capital can also be acquired.
In Saudi Arabia, the procedure of creating a bank account may take up to five weeks for a capital account and up to eight weeks for transition to an active bank account. It is also possible that issuing numbers for the bank account will take up to three months.
Ministry of Investment
The last step is to go to the Ministry of Investment to apply for a General Director’s Visa. Companies must provide a decree declaration for the general directors and their identifications in order to receive visas. This step will not take much of your time, but you must correctly follow the Saudi officials’ instructions to be successful.
It is vital to note that from 2023, Saudi Arabia will stop signing contracts with international corporations that do not have a regional headquarters in the country. As a result, all investors in the area will be obliged to have a local presence or a local agent (distributor).
Opening a company abroad takes a lot of work and patience to get started. You should have the right mindset and financial stability for your business idea to be successful! But once you are there, trust yourself, and thrive in beautiful Saudi Arabia.
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