As part of the reforms launched in the wake of Vision 2030, Saudi Arabia has liberalized its rules and regulations relating to the business licensing in Saudi Arabia by foreigners and locals.
Business-friendly reforms of Saudi Arabia
The reforms have facilitated the Company’s setup in Saudi Arabia and extensively promoted foreign investment. Among the significant reforms contributing to excellent foreign investment is allowing 100% foreign ownership of the companies without needing a local partner. It has permitted greater control of the Company by the foreign investor.
Choosing a proper business structure for your Company is vital. If you are a foreigner, you can have 100% ownership of your Company. If you plan to register a company in Saudi Arabia, the following paragraphs will guide you through your business setup.
Different types of Saudi Business Licenses
The Saudi Arabian government issues nine different business licenses from which foreign investors can choose. These include:
- Service License intended for setting up restaurants, marketing agencies, IT services and other general services.
- Entrepreneurial License for start-ups offering streamlined regulations and reduced fees to government support programs.
- Industrial License for the establishment of manufacturing facilities in Saudi Arabia.
- Agricultural License for foreign companies to engage in Agricultural activities in Saudi Arabia.
- Real Estate License for foreign companies to engage in real estate development of projects in terms of land and construction not beyond 30 million SAR and within the borders of Mecca and Medina.
- Trading License for foreign companies to import and export goods in Saudi Arabia.
- Mining licenses are intended to allow foreign companies to participate in mining activities in Saudi Arabia.
- Professional License to allow the practice of one’s profession in law, taxation, consultancy, engineering, architecture, and other advisory services in Saudi Arabia.
Challenges for Business Licenses
For a KSA Business setup, you may face some challenges in business licensing in the country. They include:
- Legal & Regulatory Framework: There is a need to fully understand the legal and regulatory needs of the country for compliance and risk management. Some parts of the legal framework are unclear, and many regulations are in Arabic.
- Lack of cultural awareness: With Saudi Arabia’s unique cultural environment, investing companies should consider cultural differences while conducting business. These include awareness of dress codes, business etiquette, and communication styles.
- Immigration regulations: There are immigration regulations around hiring locals and expats.
- Access to information: Getting information on legal and tax matters can be difficult.
- Lack of intellectual property rights
- Different technical standards
- Preference for local businesses and employees
- Tough immigration standards
- Delayed payments from the government
- Inflation
- Resolving business disputes
- Need for different branding.
- Different work week
Steps for Opening a Company in Saudi Arabia
To open a company in Saudi Arabia, you have to follow these steps:
- Get an investment license from the Ministry of Investment of Saudi Arabia (MISA). Granting authority to foreign investors to operate in the country.
- Reserve a company name: Reserve a name that aligns with the MOCI guidelines.
- Draft Articles of Association for your Company.
- Register with the Ministry of Commerce and Industry for commercial registration.
- Register with the GAZT (General Authority for Zakat and Tax) for taxation purposes.
- Get necessary permits and approvals for specific industries, environmental clearances, and municipal licenses.
- Issue the General Manager’s Visa: Obtain the necessary approval for your General Manager’s residence permit and visa.
- National Address Enrolment for government records.
- Filing with Qiwa Portal-Human Resources & Social Development
- Muqeem Portal Listing to streamline residency data management
- Absher Portal Filing to access different services.
- General Organization for Social Insurance Enrolment for the welfare of your workers.
- Open bank accounts for the Company.
Obtaining business licensing services from a professional agency like Helpline Group in Saudi Arabia is advisable to obtain business licenses and overcome the challenges.
How does the Helpline Group help set up a business in Saudi Arabia?
Helpline Group, backed by a strong and experienced team, brings over 25 years of company formation expertise, offering clients a seamless, hassle-free experience.
Our seasoned professionals possess in-depth knowledge of the latest rules and regulations, ensuring compliance and efficiency. We undertake business license services to obtain business licenses expeditiously in Saudi Arabia.
