Ultimate Guide On How To Open Company In Saudi Arabia

In this ultimate guide, we will shed light on how to open a company in Saudi Arabia and answer why you should choose Saudi Arabia in the first place.

Admittedly, Saudi Arabia is one of the supportive environments in terms of economic growth. Lately, the Saudi stewardship is launching several economic initiatives. 

One of the Saudi impactful initiatives called “Invest in Saudi Arabia” has

attracted plenty of foreign investors who contributed to the economic growth of almost 45% in 2020.

On another note, the Group of 20 (G20) classified the Saudi economy to be one of the fastest-growing economies in 2022. 

Besides, Saudi Arabia will proudly host the Expo Expedition 2030 due to the Saudi economic growth.

Hence, if you wish to open a successful company, Saudi Arabia is your destination.

In other words, Saudi Arabia has become a numerous incubator for big projects and enterprises in various domains. 

Thus, we will highlight the steps of opening a company in Saudi Arabia and the process of establishing your business.

Perks of Opening A Company In Saudi Arabia

If you are still wondering what is in it for you to build your business, read on to discover the perks of opening a company in Saudi Arabia.

• Total foreign investment reached 122 billion SAR in 2022
• Economic power to fortify the growth of investors
• Fully-fledged incubation for the startups
• Qualified workforce
• Empowered policies to more investment injection 
• Improved electronic systems fully supported by the Saudi government

In other words, to run your company in a supportive ecosystem, you have to start a business in Saudi Arabia. Never hesitate to contact our Freezoner team to help you with all procedures.

How to Start a Business in Saudi Arabia for Foreigners

Now, let’s delve into the check on how to start a business in Saudi Arabia for foreigners.

Hence, the steps of opening a business in Saudi Arabia can be as follows:

1. Choosing the business activity 
2. Setting up the company structure
3. Picking a company's unique name and enrolling it in the Ministry of Commerce
4. Submitting the required licenses and permits
5. Opening a bank account in a Saudi local bank and depositing the mandated capital 
6. Submitting the documents to the Ministry of Investment & Commerce (MISA)
7. Submitting the workforce permits for foreign employees
8. Getting the VAT registration number for the company 
9. Hiring a managing director who settled in Saudi Arabia
10.  Securing a physical office for the company in KSA
11.  Registering the company in the General Authority of Zakat, and Tax (GAZT)
12. Adhering to the labor laws in KSA

You can always get back to our business setup in Saudi Arabia page to get more information from our Freezoner team on establishing a business in Saudi Arabia for expatriates.

Frequent Questions on Opening A Company In Saudi Arabia

Let’s dive deeper into all the common questions that may come across your mind when opening a company in Saudi Arabia.

What Are the Recommended Cities For Investment in Saudi Arabia?

Our Freezoner team urges you to invest in these recommended cities in Saudi Arabia that are well-recognized as hot spot locations.

The recommended Saudi cities for opening a business are listed below:

• Riyadh
• Damam
• Khubar
• Jeddah 

These cities have a high demand due to the infrastructure, facilities, and active business projects supported by the Saudi government.

Can a Dubai Company Open a Branch In Saudi Arabia?

Another common question we receive is, Can a Dubai company open a branch in Saudi Arabia? The answer to this question is yes. 

There are two types of companies that you can establish in Saudi Arabia:

• Subsidiary: A subsidiary is acting as a new company with a new managing director and fully fledged procedures, structure, and staff. 
• Branch: A branch is a part of a parent company in another country. The branch also has the same name and adheres to the same business activity as the parent company.

How to Establish a Business In Saudi Arabia Without a Sponsor?

To establish a business in Saudi Arabia without a sponsor, you have to follow the following steps:

1. Communicate with MISA, Ministry of Investment, to get a business license (SAGIA License)
2. Contact a consultancy firm like Freezoner to facilitate the procedures in KSA
3. Get a registration document from the original country
4. Provide a Tax registration certificate
5. Submit a copy of a valid passport 
6. Provide Articles of Association to outline the company’s operations, structure, and purpose

What Is the VAT Percentage Collected by the Saudi Government?

Regarding the VAT percentage collected by the Saudi government, it is almost 15% of the average income of SAR 350,000 paid quarterly. 

The General Authority of Zakat and Tax (GAZT) is to collect the VAT percentage. Thus, all companies shall register in the first place.

How to Start a Small Business In Saudi Arabia?

It’s crucial to highlight the unprecedented efforts by the Saudi government when answering the question of how to start a small business in Saudi Arabia. Small and medium businesses come at the top of the list in the Saudi 2030 vision. 

Hence, there are some required documents to open a business in Saudi Arabia for expatriates as listed below:

1. Submitting a passport copy of the directors 
2. Providing MOA document or Memorandum of Association
3. Submitting Articles of Association
4. Opening a bank account in a Saudi local bank
5. Getting a reference letter from the bank
6. Submitting directors’ ID proof and their address in the original country

Finally, if you are up to exploring a new robust business environment in Saudi Arabia, never hesitate to contact our Freezoner team ([email protected]) to walk you through every step.

Our dedicated team is ready to answer all your questions on how to open a business in Saudi Arabia and what are the required documents.