Establish a 100% foreign owned company in the Kingdom
Although Saudi Arabia has been a difficult challenge for companies looking to establish operations there, things have changed in recent years and even more so in recent months. This is because today, the Saudi government openly welcomes investments from foreign firms as part of its Vision 2030 plan, a strategic framework to reduce the Kingdom’s reliance on oil, diversify the economy, and develop a bustling private sector. By opening up the Kingdom to the world and removing many of the barriers that existed, the Saudi government aims to position the country to become a key player on the world stage.
Benefits of Starting a Business in Saudi Arabia
The Kingdom’s attractiveness as a prospect to any savvy business owner is not just limited to the nation’s openness to foreign investments or physical location within the Middle East, but it is because the country provides:
- Attractive property solutions across 35 rapidly growing cities and commercial hubs.
- Supply of industrial land and commercial real estate at competitive prices.
- A young and skilled workforce (50% of the country’s population is under 25 years old).
- One of the safest places in the world with a high-quality healthcare system.
Despite the easing of restrictions, however, starting a business in Saudi Arabia is not simply a case of registering it online and opening up shop. There is a set process that must be followed and, as with any major business decision, there are some considerations that need to be made by business owners that are thinking about expanding into the region.
Local Knowledge is Key
You must have good knowledge of Saudi Arabia and the wider region. To that end, you must be prepared to undertake lots of research in not only the country and the Middle East but also the industry or sector where your business aims to operate in. Although you may be an expert in your industry expert in your home country, the Kingdom will prove to be entirely different.
On top of having local sector knowledge, you will also need a solid business plan which includes a study and analysis of the market conditions, potential competitors, and your forecast. You must also be prepared to search for and secure investment via your own resources, however, the rules on access to capital for foreign firms have been relaxed recently.
Requirements To Start a Business in Saudi Arabia For Foreign Companies
To ensure the eligibility and ability of any foreign business owners to invest in Saudi Arabia, bringing sufficient experience to establish a sustainable business that adds value to the Saudi economy, you must have:
- A registered business outside KSA that is operation for at least one year
- An audited financial statement for your company for the same period
However, The government of Saudi Arabia categorically supports individual entrepreneurs who own intellectual property rights and documented patents from internationally or locally recognized entities, by providing them the opportunity to establish their business without the need for having an existing company outside the Kingdom. It is only in this case you will be issued investment license under the entrepreneurial category to start your Saudi based business.
What Is The Process To Start a Business in Saudi Arabia
Once you have thought about those three considerations and have everything in place, you can get started with the official formalities. The entire process can be summarized in the following steps…
- Prepare all your documents and submit them to the Saudi consulate.
- Submit your application to the Ministry of Investment of Saudi Arabia (MISA; previously the Saudi General Investment Authority (SAGIA)) for your company’s investment license.
- Obtain approval from the Ministry of Commerce and Industry after submitting your company’s name and Articles of Association.
- Sign the Articles of Association in front of a notary public.
- Publish the Articles of Association and company name in the official gazette.
- Open a bank account, transfer share capital, and obtain a certificate that states this capital has been deposited.
- Register with the General Department of Passports, Ministry of Interior, and Ministry of Labor for work/residence visas for any foreign workers (e.g. business owners and managers).
- Register with the Ministry of Commerce and Industry and the local Chamber of Commerce.
- Obtain a file number and certificate of business commencement. This is done by registering with the Department of Zakat and Income Tax and Ministry of Finance.
- Register with the General Organization of Social Insurance.
How Transcend Can Help You Starting Your Business in Saudi Arabia!
As you can see, there is quite a lot involved with starting up a business in Saudi Arabia. This is because the Saudi government, while keen to encourage foreign investments, wants to protect the Kingdom and its people from unscrupulous businesses. As a result, the business registration process is relatively long and thorough.
At Transcend, however, we streamline the process of helping you set up your business with our range of professional business consultancy and registration services. Our in-house experts are specialized in bringing businesses like yours to the Saudi market, handling the entire process from start-to-finish so that you have more time to focus on what’s important—managing your business.
With our turnkey solution, you can benefit from access to the Saudi market without any barriers or obstacles in the shortest possible time. If you want to learn more about how we can Transcend your expectations, contact the team today!