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Business license in Saudi Arabia

Required business license in Saudi Arabia

<img src="saudi-arabia-license.jpg" alt="business license in Saudi Arabia"/>
Business license in Saudi Arabia

We shall discuss on what business license in Saudi Arabia (KSA) is required to start a business being foreign investor (s). The Kingdom of Saudi Arabia KSA is a desert country located in the Middle East. Bordered with Red Sea, Arabian Gulf, and a group of Arabian and gulf countries; United Arab Emirates UAE, Qatar, Kuwait, Iraq, Jordan, Yemen and Sultanate of Oman. The Kingdom of Saudi Arabia with major 8 sea ports stretched up to more than 2,240.000 square meters with 32.28 million populations. The capital city is Riyadh, a skyscraper metropolis. The currency of Saudi Riyal is USD 1 equivalent to SAR 3.75. The critical rankings of KSA out of 190 countries as per doing Business Report 2017 of World Bank are as follows:

Areas Ranking status
Ease of Business 94th
Starting  a Business 147th
Protection of Minority investors 63rd
Payment of Taxes 69th

In Kingdom of Saudi Arabia KSA all businesses have to be registered to do a business. The registration is done for forming companies to do businesses other than those are restricted for foreigners. The New Companies Regulations, the NCR effecting on 2 May 2016 prescribes five forms of companies which can be established in the Kingdom are:

  • Joint liability companies, equivalent to general partnerships.
  • Limited partnership companies, equivalent to limited liability partnerships.
  • Joint ventures.
  • Joint stock companies JSCs and
  • Limited liability companies LLCs.

Licensing and Registration

Among these the most common and preferable form of company considered for the foreigners is Limited Liability Company LLC. To register a LLC in Saudi Arabia the intended investors are required to come first in to Saudi Arabian General Investment Authority SAGIA to get a foreign capital investment license, before proceeding with the registrations of their companies with Ministry of Commerce & Industry MOCI. Obtaining business license in Saudi Arabia is a 3 step process requiring 5 working days to complete. SAR 2000 is required as fee and can be extended it up to 15 years.

  1. A board resolution declaring intent of investment in Saudi Arabia
  2. Another resolution outlining the investment plan including its economic impact
  3. A document showing the investor’s financial ability to carry out operations

Once business license in Saudi Arabia is obtained in hand the process of registration of LLC can be started to complete in 11 steps.

  1. Reserving a company name

Authority: Ministry of Commerce and Industry.

One working day is requiring if done online with no charge.

  1. Submission of the articles of association & Notarization

Authority: Unified Center (UC)/Companies Department

AoA is to submit the Ministry of Commerce and Industry for Authentication. It’s required one working day but no charge. After authentication by the Ministry notarization of the AA is required by notary office. Noting requires 3 days but no charges.

  1. Opening bank account

Authority: Bank, To open bank account is required 1 working day and no charge.

  1. Obtaining a Business Location License from the Municipality and Registering with the Post Office.

Authority: Municipality of Riyadh and Post Office

The job requires 1 working day but no charge.

  1. Paying the registration fee

Authority: Bank in the premises of the Unified Center UC

1 working day may require being completed whole process. The registration fee is more SAR 650 is required for the publication of summary of Articles of Association AA.

  1. Obtaining the Certificate of Registration

Authority: Unified Center (UC)/Companies Department.

The procedures cost 2 working days but no charge.

  1. Payment of Chamber of Commerce membership fee

Authority: Chamber of Commerce

A sum of SAR 2000 is to be paid as membership fee. The process requires 1 working day.

  1. Registering with the Ministry of Labor

This process requires 1 working day but no costs.

  1. Registering with the GOSI [General Organization for Social Insurance]

Authority: General Organization for Social Insurance

The certificate issued by GOSI can be had online. Two working days might need to be completed but no costs.

  1. Registering with the Department of Zakat [DZIT]

DZIT issue certificate in about 2 to 3 working days and dispatched the same to Applicant Company through email. No fees required.

Opening a Branch Office in KSA 

Well it’s tough to get a foreign capital investment license from SAGIA as required to forming a LLC. In fact this business license in Saudi Arabia, SAGIA is seldom issues. To bypass the issuance of such license the foreign investors are advised either to Form a Branch of a company registered in one of the member countries of GCC [Gulf Cooperation Council] exempted from this licensing or come in to an agreement with a local. The formalities to register a branch require 3-7 weeks and SAR 3390 as fees.

Following are the useful links for foreign investors;

Reference:

  1. Ministry of Commerce and Industry
  2. Saudi Arabian General Investment Authority SAGIA  
  3. Department of Zakat 
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