BusinessSaudi ArabiaUltimate Guide to Company Registration Process in Saudi Arabia

February 10, 2022by Tetra Consultants0
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Foreign company registration in Saudi Arabia is the dream of many investors, wishing to conduct business in the future-forward economy that offers unique business opportunities in the land of Western Asia. The jurisdiction of Saudi Arabia offers exciting potential and opportunities to interested investors. The country belongs to the G20 economy, an international forum that brings together the world’s top economies that was developed to focus on international cooperation regarding matters of international economic and financial agenda. Excitingly, the country also boasts a strategic location at the crossroads of major trade routes that leads to three different continents, holding major market access for potential investors. However, when you register company in Saudi Arabia, it can be a tricky experience for first timers and those who have no prior experience of incorporating a company. Tetra Consultants has prepared the ultimate guide to company registration process in Saudi Arabia for your reference.

company registration process in saudi arabia

1) Choose a Suitable Business Entity 

The first step on the ultimate guide to company registration process in Saudi Arabia is to choose a suitable business structure to form your company. According to the Saudi Arabia Ministry of Commerce, there are generally three types of company you can choose to register in the country:

1) Saudi Arabia Limited Liability Company (LLC)
The Saudi Arabia Limited Liability Company is the most often type of business vehicle chosen by foreign investors. Members and shareholders hold limited liability and are seen as separate entities from the company. They are only liable to their invested sum of share capital in the company. The LLC allows for free sponsorship of residency to employees of the company and provides company owners favourable financing rates from the Saudi Industrial Development Fund that operates in the industrial sector. They have free reign to promote and solicit business from both public and private sectors within the jurisdiction. However, it is important to note that operating in Saudi Arabia will limit your business activities to only those approved by the Saudi Arabian General Investment Authority. The restriction of sectors falls under what is known as the ‘Negative List’ which conducts periodic reviews. Primary sectors that are restricted include wholesale and distribution, education, medical services and pharmacies, television, radio and electronic transmission, fisheries as well as air and sea transport. To set up an LLC in Saudi Arabia, a minimum of 2 shareholders are required but they are not allowed to exceed 50 memberships.

2) Joint Stock Company (JSC)
A joint stock company is identical to an LLC but there needs to be a minimum of 3 directors of any nationality to be appointed. There is no cap on the maximum number of shareholders and it can be incorporated by 2 affiliated foreign companies. When a JSC is formed, a board of directors have to be appointed and the required quota of members should be kept between 3 to 11 members. However, do take note that JSC falls under the Foreign Strategic Investors (FSI) rules and shares listed have to undergo a lock-up period of 2 years.

3) Branch Office
Branch offices are seen as extensions of parent companies and often conduct similar business operations. However in Saudi Arabia, foreign ownership is limited to only members of the Gulf Cooperation Council (GCC): Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

2) Application for Investment License:

The second step on the ultimate guide to company registration process in Saudi Arabia is to apply for an Investment License before registering your company in the country. This is a mandated step for all countries who are not part of the GCC. Interested investors have to submit their application to the Saudi Arabian General Investment Authority (SAGIA), the regulatory body that manages foreign investments. Your application will require to outline information regarding the nature and size of your business activity as well as key financial information about your company.

3) Company Name Reservation:

The third step on the ultimate guide to company registration process in Saudi Arabia is to reserve your company name with the Ministry of Commerce and Industry. Name reservation is valid for 2 months and can be done so through the online portal of the Ministry of Commerce and Industry.

4) Preparation of Documents:

The fourth step on the ultimate guide to company registration process in Saudi Arabia is to prepare all the necessary documents for your incorporation application. These includes articles of incorporation, constitution of your company as well as the personal information of directors and relevant shareholders.

5) Registration with Relevant Authorities and Licenses:

The final step on the ultimate guide to company registration process in Saudi Arabia is to register with MERAS, the Chamber of Commerce and to attain your foreign business license as well as the creation of your company seal. MERAS is a government program under the Saudi Business Center that facilitates all procedures and services for conducting businesses. Incorporated firms have to also register with the Chamber of Commerce within 30 days of registration to attain the certificate of membership. It is also important to attain your foreign business license from SAGIA as it will allow your company to conduct business. The last thing to note is the creation of a company seal. A company seal is required to attest signatories at the Chamber of Commerce and is used for various official administrative purposes.

Conclusion:

Engage Tetra Consultants as we guide you on how to register a company in Saudi Arabia through a smooth and hassle-free process. The team provides a comprehensive service package that includes planning and strategizing with our clients to select a suitable business entity, completing the registration and documentation processes, obtaining required licenses, opening a corporate bank account, and ensuring your compliance with the government regulations. 

Contact us to find out more about company registration in Saudi Arabia and our dedicated and experienced team will revert within the next 24 hours.

Tetra Consultants

Tetra Consultants is the consulting firm that works as your advisor and trusted partner in your business expansion. We tell our clients what they need to know, instead of what they want to hear. Most importantly, we are known for being a one-stop solution for our valued clients. Contact us now at enquiry@tetraconsultants.com for a non-obligatory free consultation. Our team of experts will be in touch with you within the next 24 hours.

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