Business Set Up

Company Formation in Saudi Arabia through the Ministry of Investment:

For foreign companies wishing to establish and register a business in Saudi Arabia through the Ministry of Investment, this has become one of the easiest and fastest ways to set up a company in Saudi Arabia. This is due to the updates made to the Ministry of Investment's regulations in 2017, which facilitated the entry of foreign investors by enabling them to obtain a MISA license.

Foreign companies seeking a 100% foreign-owned commercial license in Saudi Arabia must submit certain documents that comply with the requirements based on the type of license requested. For instance, a service license or industrial license in Saudi Arabia requires the following:

1. A commercial registration valid for one year, attested by the Saudi Embassy or Apostille.
2. The company’s Articles of Association, attested by the Saudi Embassy or Apostille.
3. The company’s audit reports (total income is not a determining factor), attested by the Saudi Embassy or Apostille.

A service license allows businesses to engage in commercial activities providing services within Saudi Arabia, such as contracting, Information Technology, education, and healthcare services. However, the investor is not permitted to engage in retail, wholesale, or trading activities unless they obtain a commercial license from the Ministry of Investment, which has different requirements than the service license.

Commercial License in Saudi Arabia:

A commercial license allows the investor to engage in trade, retail, wholesale, or e-commerce activities. It also enables the foreign company to import, export, and issue product certificates or register them with accredited entities in Saudi Arabia, such as the Saudi Food and Drug Authority (SFDA). To obtain a commercial license, the following conditions must be met:

1. Three commercial registrations from three different countries, attested by the Saudi Embassy or Apostille.
2. The parent company’s Articles of Association, attested by the Saudi Embassy or Apostille.
3. The parent company’s audit reports, attested by the Saudi Embassy or Apostille.
4. An investment of 30 million SAR for the first year if the company is 100% foreign-owned.
5. An investment of 300 million SAR for the first five years, including the first year.

It is important to note that the required investment for the first year, amounting to 30 million SAR, means that the company’s account activity, assets, or goods must total or exceed 30 million SAR during the first year. It does not mean that this amount must be deposited into the company’s bank account in Saudi Arabia. Similarly, for the first five years, the same principle applies: the account activity, goods, or assets must total 300 million SAR.

Real Estate License in Saudi Arabia:

The real estate license in Saudi Arabia allows foreign investors to establish a company or branch in Saudi Arabia to engage in real estate investment activities. Foreign investors can open company in Saudi Arabia without the need for a Saudi partner in the real estate sector, provided they meet the following conditions:

1. A commercial registration valid for one year, attested by the Saudi Embassy or Apostille.
2. The company’s Articles of Association, attested by the Saudi Embassy or Apostille.
3. The company’s audit reports (total income is not a determining factor), attested by the Saudi Embassy or Apostille.
4. The company's capital for the project or entry into Saudi Arabia must be 30 million SAR, including the value of the land or property, as well as construction or finishing costs, or other related expenses.

Industrial License in Saudi Arabia:

This license is designated for companies wishing to establish a factory in Saudi Arabia and engage in industrial activities. It is similar to the service license in terms of requirements, conditions, and regulations. Foreign investors can enter Saudi Arabia and establish an industrial company without the need for a Saudi partner. Regarding import and export for the industrial sector, particularly machinery and equipment for the foreign company in Saudi Arabia, no additional fees or taxes apply, except for a 5% customs duty. Additionally, the owner of an industrial company in Saudi Arabia is permitted to sell its products within and outside the Kingdom if the product is manufactured by their company in Saudi Arabia.

Professional or Consulting License in Saudi Arabia:

This license is intended for companies offering professional and consultation services, such as law, accounting, legal services, administrative or industrial consulting, or mining consultancy in Saudi Arabia. It is linked to the professional license, which requires a Saudi partner holding the same license in the same field or business activity the foreign investor wishes to invest in. The conditions are as follows:

1. A commercial registration valid for one year, attested by the Saudi Embassy or Apostille.
2. The company’s Articles of Association, attested by the Saudi Embassy or Apostille.
3. The company’s financial statements (total income is not a determining factor), attested by the Saudi Embassy or Apostille.
4. A Saudi partner with a minimum ownership share of 25% in the company.
5. The Saudi partner must hold a license in the same professional field.

Consultancy License for Engineering Offices in Saudi Arabia:

This activity is permitted for foreign investors wishing to establish a consultancy firm in the field of engineering in Saudi Arabia. Foreign companies can obtain this license without the need for a Saudi partner. There are specific conditions that a foreign company must meet in order to obtain an engineering consultancy license from the Ministry of Investment in Saudi Arabia. These conditions are as follows:

1. The company must have four commercial registrations in four different countries in the same field, attested by the Saudi Embassy or Apostille.
2. The company’s financial statements for the most recent year, attested by the Saudi Embassy or Apostille.