In line with its Vision 2030, Saudi Arabia has established Free Zones to attract private-sector investment, making free zone business setup in Saudi Arabia an ideal opportunity for foreign investors. It has prompted many investors to do business in Saudi Arabia, benefitting from the leverage of Saudi Arabia’s Free zones for companies set up in Saudi Arabia.
Advantages of Free Zone Business set up.
The free zones offer several benefits to the prospective investor. They include the following:
Tax incentives: The businesses set up in free zones are eligible for corporate income tax, import/export duties, and value-added tax (VAT) subsidies.
Simplified Regulations: The procedures to set up and operate a business in these zones are streamlined to make the establishment of the business easy.
Strategic Locations: The free zones are generally near transportation hubs such as ports and airports, improving the companies’ access to foreign markets.
Foreign Ownership: Some free zones allow 100% foreign ownership in Saudi .
Out of the newly formed Special Economic Zones (SEZs), the west free zone, also called King Abdullah Economic City, is positioned along the Red Sea. It envisages the development of automobiles, consumer goods, electronic light manufacturing, pharmaceuticals, Medtech, and logistics.
The northeast free zone, termed Ras Al Khair, focuses on maritime industries like Shipbuilding and MRO, Rig platforms and MRO.
The Southwest Free Zone, Jazan, focuses on the mining industry, processed metals, and mineral markets. The other sectors are food processing, metal conversion, and logistics.
Central Cloud Computing in King Abdulla Aziz City for Science & Technology free zone allows businesses to build and operate data centres nationwide focusing on Cloud Computing Services.
Central Special Integrated Logistics Zone produces consumer products, computer parts, pharmaceuticals, nutritional and medical supplies, aerospace spare parts, luxury goods, jewellery, and precious metals.
Tips for Business Setup in Free Zones of Saudi Arabia\
For company formation in free zones of Saudi Arabia, the following steps may be followed:
- Select the Appropriate Free Zone: The free zone for your business activities may be selected first.
- Determine the Legal Structure: The next step is to choose a legal structure suitable to your business interests, like Limited Liability Companies (LLCs), Joint Stock Companies (JSCs), and branches of foreign companies.
- Prepare Comprehensive Documentation: The necessary documents include a detailed business plan, notarized Articles of Association (AOA), copies of the shareholders’ and directors’ passports, and the company address.
- Obtain Initial Approvals: The next step before registration is to obtain preliminary approvals from relevant authorities, namely, the Ministry of Investment of Saudi Arabia (MISA) and the Free Zone Authority.
- Reserve a Unique Company Name: After selecting a distinctive company name that meets Saudi regulations, it may be reserved through the Ministry of Commerce and Investment (MOCI).
- Lease Office Space within the Free Zone: Leasing office space meeting your operational needs and regulations within the chosen free zone is mandatory.
- Open a Local Bank Account: Establishing a corporate bank account in Saudi Arabia to manage financial transactions is necessary.
- Hire Employees in Compliance with Regulations: To hire employees, you must familiarize yourself with Saudi labour laws and hire employees accordingly. Free zones often have specific guidelines regarding hiring practices and employee benefits.
- Obtain Necessary Permits and Licenses: Additional permits or licenses may be required depending on your business activities. The free zone authority may be consulted to ensure full compliance.
- Understand Cultural and Business Practices: Building strong personal relationships through traditional meetings and informal gatherings helps cultivate successful business connections.
You can successfully establish a company and engage in free zone business setup in Saudi Arabia by following the steps above and seeking professional assistance when needed.
Role of Helpline Group, Saudi Arabia
The Helpline Group in Saudi Arabia is a reputed business setup consultant in KSA. With their rich experience, the qualified team of the Helpline Group will help your business be established in the country with all necessary licenses, registrations, and approvals.
They specialize in facilitating Saudi company formation, especially in setting up businesses in free zones in the country. They can be your trusted partner throughout the business setup process.
