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.
To set up a business in Saudi Arabia, there can be varying requirements depending on the entity type. The process is generally similar, from registration, licensing to set up. Companies must complete the following steps in order to begin the process of setting up a business in Saudi Arabia:
The Commercial Registration (CR) or business license – Issued by MOCI, the CR certificate outlines and enables the company to conduct business activities in Saudi Arabia, and allows the same rights as given to a citizen.
The Memorandum of Association (MoA) or Articles of Association (AoA) – Approved by MOCI and signed in the presence of a notary
Setting up in Saudi Arabia, they require an audited financial statement for the last financial year
A passport copy of the assigned General Manager of the Saudi Arabian entity
A Certificate of Incumbency.
For certain activity types, the company would require specific licensing from the relevant government departments, for example, a pharmaceutical company would require a Saudi Food and Drug Association licence.
Particulars | LLC | JSC | Branch |
---|---|---|---|
number of shareholders | 1 to maximum of 50 shareholders | Normally 2 shareholders1 shareholder is permitted minimum capital SR 5,000,000. | Non applicable |
CAPITAL REQUIREMENTS | Determined by the Ministry of Investment of Saudi Arabia (MISA) (depending on activity shareholding) | SR 500,000 orSR 5,000,000 (in case of single shareholder) | Normally SR 500,000 (may be lower or higher depending on activity) |
LIMITED LIABILITY | Yes | Yes | No |
LOSSES EXCEED 50% OF CAPITAL | Should losses exceed 50% of capital, the shareholders are not personally liable for LLC debts. Shareholders to meet within 90 days & agree to dissolve or continue business & publish the decision. | Should losses exceed 50% of capital, the shareholders are not personally liable for JSC debts. Shareholders to meet within 45 days via general meeting & agree to dissolve or increase the JSC share capital. | The head offices liability will not be restricted to the amount of branch’s capital. Should losses exceed 50% of capital, the shareholders to meet within 90 days & agree to dissolve or continue business. |
CORPORATE TAXES ON ANNUAL NET PROFITS | 20% | 20% | 20% |
ZAKAT RATE PAYABLE BY GCC RESIDENTS ONLY | 2.5% | 2.5% | 2.5% |
APPOINT AUDITOR | Yes Required | Yes Required | Yes Required |
ABILITY TO BID FOR GOVERNMENT CONTRACTS FILE ANNUAL TAX RETURN | Required | Required | Required |
FILE ANNUAL FINAL STATEMENTS | Required | Required | Required |
Particulars | LLC | JSC | Branch |
---|---|---|---|
REGISTER SAUDI COMPANY NAME | 1-2 working days | 1-2 working days | 1-2 working days |
apply & receive ministry of investment of Saudi Arabia(misa) license | 2-4 weeks depending on business activity | 2-4 weeks depending on business activity | 2-4 weeks depending on business activity |
REVIEW & APPROVE ENTITY DOCUMENTS | 5 working days | 5 working days | 5 working days to complete |
NOTARISE ARTICLES OF ASSOCIATION | 1-2 working days | 1-2 working days | Not applicable |
pay registration fee & receive commercial registration | 1 working day | 1 working day | 1 working day |
register office address | Required | Required | Required |
commercial registary | 2 working days | 2 working days | 2 working days |
register chamber of commerce | 1 working day | 1 working day | 1 working day |
register with labour | 1 working day | 1 working day | 1 working day |
register with social insurance | 2-3 working days | 2-3 working days | 2-3 working day |
register for taxes | 2-3 working day | 2-3 working day | 2-3 working day |